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A complete guide to financial resources for caregivers of the aging
Caregiving is expensive in ways that many caregivers themselves do not account for. In addition to the emotional and physical strain that comes with caring for an elderly parent, there are the expenses of travel, time off work and a variety of other expenses – both big and small – that you incur. Too often, children of senior adults do not ever properly account for all the finances related to helping their parents. However, you should keep an account. You also need to do all you can to make sure you are getting the most out of the resources you are using and that are available to you.
Here is Comfort Life's complete guide to means of government financial support for caregivers of the elderly in Canada. Included are both tax credits and benefits available.
Basic tips and overview
Do yourself a big favour and keep a ledger of all expenses you incur in relation to caregiving. It makes perfect sense to have some discomfort about doing this ("love keeps no accounts," we know), but there are obvious practical benefits to this, most notably the ability to get tax refunds, and to apply for other financial aid that may be available. Doing all you can to relieve yourself of the financial burdens you are taking on can help you be a better caregiver, by relieving you of some of the stresses related to caregiving. Ultimately, this may help you avoid burnout. It's all part of taking care of yourself, as you care for your loved one.
There are a wide variety of expenses incurred if you are caregiving for an elderly loved one. You may be traveling to their home to help them out, you may be paying part of their expenses, or you may even be making small renovations to their home. Helping out your parents or senior loved ones in these ways is laudable, of course, but in several of these scenarios you may be eligible for tax credits.
Other scenarios may surprise you as being tax-break-worthy. These include:
- taking time off work or away from your business in order to help your aging parent
- availing yourself of a respite care stay in order to take a vacation or just give yourself a break from caregiving (for someone with Alzheimer's Disease, for example)
Basic caregiver amount
You can claim the caregiver amount as a tax credit, if you have a dependent relative of any age who lives with you (including parents and grandparents of both you and your spouse), if they are dependent on you for care. Eligibility is dependent on a few basic factors. In order to qualify, your elderly loved one:
- had a net income (line 236, in 2016) of less than $20,343 and
- was dependent due to an impairment in physical or mental function (including many forms of dementia)
You can split this claim with your spouse, and there are provisions that allow you to claim this retroactive at least one year, if you forgot or missed it. Read more at cra-arc.gc.ca/../315/. The Canada Revenue Association (CRA) also provides a simple questionnaire to determine your eligibility.
Medical expenses: the Medical Expense Tax Credit
If you are paying medical expenses for an elderly loved one, it may be in your collective best interest to get the most out of tax credits from the Canada Revenue Association. The CRA offers tax credits to anyone whose medical expenses exceed 3% of their total income. If your elderly loved one is spending a lot on medical expenses, it may be in your best interest to get them to pay for the medicine. Don't pay for medicine out of your own pocket without knowing you are revoking tax credit opportunity.
You can claim a wide variety of medical expenses for seniors. As you will see from the CRA's full list, there are more than a few surprises. Some things you can claim include the following products:
- Air purifiers (with a prescription)
- Computer products that aid the vision impaired, as long as you have a prescription
- Cosmetic surgery for medical or reconstructive purposes
- Crutches can be claimed without a prescription
- Gluten-free products for those with celiac disease, based on incremental cost over non-gluten foods
- Service animals for those who are blind, deaf, or suffer from diabetes or other disorders
- Some vitamins (with a prescription)
The full list of claimable medical expenses is worth investigating. See for yourself.
The refundable medical expense credit is 25% of medical expenses, and is based on income stipulations. Consult a CRA or your tax advisor, for fuller details.
Home renovations: the Home Accessibility Tax Credit
If you renovate a home in order to accommodate the needs of someone who is disabled, you can claim a non-refundable tax credit for expenses incurred. This is eligible for those who also claim the disability tax credit, or anyone over the age of 65.
You can also claim some accessibility renovation expenses as a medical expense, and for eligible expenses, you can claim both the METC and the HATC. Renovations must be solely for the purpose of increasing accessibility, for a person who has a prolonged physical impairment.
Some examples of types of renovations that qualify as medical expenses (METC) are as follows:
- buying and installing outdoor or indoor mobility ramps for any person who cannot use stairs
- widening doorways or hallways (for example, for a wheelchair or rollator), in order to give a disabled person access to any rooms or areas of his or her home
- renovations to kitchen or bathroom cabinetry in order to give a person access to them
Types of renovations that qualify for the HATC are any home alteration that is integral to the home or dwelling. In order to qualify, a renovation must grant access to or improve functional abilities within a dwelling; or it must reduce the risk of harm to the individual. For seniors, this opens up some options. It can include things like a walk-in tub, installing motion sensor lights, adding non-slip flooring and a variety of other accessibility and safety improvements that you might not realize are eligible.
You can claim up to $10,000 per year, so if you plan renovations properly you can optimise your tax credits. You might also choose to make accessibility renovations incrementally in order to optimise tax breaks you qualify for (if delays do not jeopardise your loved one's safety).
Learn more details at cra-arc.gc.ca/../398.
Taking time off work to care for a loved one who is very ill or nearing death
Compassionate Care Benefits are part of Canada's Employment Insurance benefits program. This government assistance is available to both self-employed and regularly employed Canadians. In any case where you need to be away from work on a temporary basis in order to provide care, you can receive these benefits, up to a maximum of 26 weeks. This can include care for grandparents, uncles, aunts and other qualified seniors. To be eligible, you have to be able to show that your earnings from work have decreased due to caregiving, and that you have accumulated at least 600 hours of EI insurable hours of work in the last 52 weeks. The max payment is $537 per week (as of 2016). You can learn more at esdc.gc.ca/../compassionate.
The Disability Tax Credit (DTC)
While not directly applicable to caregivers, family members certainly ought to be aware of eligible disabilities applicable to the Disability Tax Credit (DTC). Included in the list of applicable impairments are several disabilities related to activities of daily living (ADLs), including feeding, dressing and incontinence. For example, see how the CRA qualifies DTC availability for those with impairments related to dressing.
Learn more about the disability tax credit.