Caregivers Need More Help

Many of us are blessed to have older family members enriching our lives, but they often require a significant amount of care, and their caregivers can, in turn, require more help. At a time when politicians and potential leaders debate subsidized child care, are we missing an opportunity to discuss whether the tax system is doing enough to recognize the real and increasing costs of elder care?

The Issues: There are 5.4 million caregivers in Canada, and close to 60% of them give more than 10 hours of care per week – 40 hours per month – primarily to females over the age of 85 who have a serious illness like dementia. According to a recent study by Statistics Canada, these caregivers, are worried, overwhelmed and anxious.  In addition, two-thirds of them incur non-reimbursed expenses of $500 to over $2000 per year.
What does the tax system do for caregivers today to compensate for the time and money expended to give care?  There are a number of provisions:

EI Compassionate Care Coverage. As of January 2016, the maximum benefit period for claiming Compassionate Care Benefits from Employment Insurance will increase from the current six weeks to six months. This time can be used for psychological or emotional support; arranging for care by a third party or directly providing or participating in the actual care. To qualify, there must be a 40% or more decrease in income, you must have accumulated 600 insured hours in the last 52 weeks and there is a two-week waiting period. At the time of writing the maximum assistance was $524 per week and so a maximum benefit of $13,624 over 26 weeks is possible.

Caregiver Amount. When the disabled person lives in the same home as the taxpayer, it’s possible to claim a Caregiver Amount. For 2015, the maximum claim is just over $4600 if the dependant is not infirm (i.e., age 65 or older and living with you). If the dependant is infirm, the claim is over $6,700. In either case, the claim is reduced by the dependant’s net income in excess of $15,735. It is phased out completely when net income reaches $20,343, if the dependant is not infirm, and $22,436 if the dependant is infirm. If you qualify for the full amount, the real dollar value is just over $1000 against federal taxes payable, and a provincial benefit, which varies by province.

Do caregivers need more help to accommodate the seriously ill in their homes? The costs can be astronomical if home modifications are required. Next time, how to claim those expenses to get tax relief.

NEXT TIME: Claiming Home Modification, Medical and Disability Amounts