Caregivers want their loved ones to be as comfortable, happy, and healthy as possible. That’s why, when people decide to provide care for a family member, they find themselves putting their loved one’s needs ahead of their own. This often means that caregivers make professional and personal sacrifices while providing attentive, loving support for others. In many cases, they encounter financial struggles because caregivers have to cut back on their hours at work or quit their jobs altogether.
If you are a caregiver who is concerned about your financial future, you need to know that you are not alone and that there are a few financial aid options available to you. We explore the following topics to help you learn how to spend more time caring for your loved one and less time worrying about your finances:
- General Financial Challenges Caregivers Face
- Financial Aid Options for Caregivers
- Tax Incentives and Other Financial Help
General Financial Challenges Caregivers Face
One of the main reasons caregivers face financial challenges is they need to cut back on the hours they work in order to provide care for a loved one. AARP’s recent report on caregiving in the United States found that an estimated 40 million Americans provided unpaid care to an adult in 2014, and that 60% of caregivers balanced being employed with providing care to a loved one.
Yet, caregiving often becomes a full-time job, and if caregivers cannot hold their traditional job, they face financial difficulties. In fact, a recent survey shows that 80% of all long-term care in the United States is provided by unpaid or informal caregivers. Studies also show that 75% of caregivers who experience financial strain as a result of providing care to a loved one are women.
Unfortunately, many people face the decision of whether to leave their job to become full-time caregivers. The decision certainly is not an easy one: those who choose to care for a loved one lose not only their income but also lose their retirement benefits and health insurance. And, nearly 15% of caregivers also provide financial support to their loved ones, which leads to depleted savings accounts or retirement accounts.
Financial Aid Options for Caregivers
If you have some forewarning that your loved one will need to become a care recipient, and you are interested in becoming a paid caregiver, you should educate yourself about home care costs, financial planning, and financial aid for caregivers. You may discover that your loved one can afford to pay you to care for him, or you may realize that it is more affordable for your loved one to become a resident of an assisted living facility than it is for you to care for him.
If, however, you need to become a caregiver sooner than you anticipated, there are some financial aid options available for caregivers to receive compensation. For example, you may be eligible to receive aid through Medicaid’s Cash & Counseling program or veteran-directed home and community-based services program. Some people who remain employed can take advantage of employee benefits such as paid leave for caregiving.
Tax Incentives and Other Financial Help
Some caregivers who are ineligible for financial aid look for other options for payment. One option is tax incentives. Those who meet certain qualifications can deduct medical expenses and mileage and benefit financially. You also may be able to claim your care recipient as a dependent on your tax return. It’s important to keep in mind you will not receive your incentives as quickly as you will financial aid.
Another option is to determine whether you are eligible for unemployment insurance benefits. People who have no alternative but to quit their jobs to become caregivers may qualify for unemployment insurance (UI). The key is to determine whether you live in a state that is friendly to caregivers and considers caring for a loved one a compelling reason and good cause for choosing to leave a job.
People often have to make a difficult choice: quit a job and lose income and retirement benefits to become a full-time caregiver or try to juggle employment and caregiving duties. Studies and surveys find that caregivers do face financial hardship. However, some financial aid and alternative options for becoming a paid caregiver are available to people who want to support their loved ones with loving, attentive care.