Paying for Caregiving Expenses: An Elder Law Expert Provides Some Answers

It’s a blessing to care for loved ones, but you also have to take care of yourself. That means financially, too.

This was one pointed message from elder law expert Sally Balch Hurme, author of ABA/AARP Checklist for Family Caregivers. Hurme has worked 25 years for AARP as an elder law advocate quoted frequently in national media, including the Wall Street Journal, USA Today, and CNN.

At a recent AARP webinar on caregiving, AARP Virginia volunteer Trudy Marotta hosted 56 participants from as far away as Alaska, with the majority from Virginia. Hurme was the featured guest.

According to Hurme, about 1.5 million Virginians provide care for others, spending roughly $14 billion each year. On average, caretakers spend about $304,000 in lost wages and contributions to Social Security and/or pensions. About 78 precent of family caregivers use their own money to help pay for care.

But Hurme said there are options. One option she mentioned: Make an employment contract with the beneficiary of your care for you to be paid an hourly rate. While this may be difficult for a co-habiting spouse, other family members can be legally contracted by the care recipient.

Hurme noted that the contract must be in writing and should look like any employment contract. Include such items as when the caregiver is expected to begin work and for how long (biweekly, specific days and how many hours). The contract should address time off and vacation hours. It should spell out what tasks the caregiver is expected to handle. It should also give detailed descriptions of services like errands, food preparation, housekeeping, medication management or transportation. Caregivers can find much more on this topic here: https://states.aarp.org/virginia/caregiver-resources/.

Compensation must be “reasonable” for what would be paid to an outsider. Given possible sensitivities, it is always wise to share the contract with the rest of the family.

Hurme also suggested finding additional income in unclaimed benefits for the care recipient. Benefits Checkup connects older adults and people with disabilities to programs that can help them afford daily expenses, live healthy, and stay independent. This free tool makes it easy to find programs to boost the recipient's budget, how to learn more about them and apply online.

Hurme recommended checking with the local Area Agency on Aging, which offers resources for older persons, educational and social opportunities, and community meals. Here is the link for Virginia residents: https://www.vda.virginia.gov/aaamap.htm

Check for tax deductions, such as medical expenses you as the caregiver pay for your spouse or dependent adult. These can include: co-pays, drugs, hospital, dental, vision, acupuncture, and travel cost for medical care at $.21/mile. You must itemize and retain all your documentation. You can deduct medical expenses that exceed 7.5 percent of your annual gross income.

Caregivers can also claim a deduction if the care recipient is your adult dependent, Hurme noted. To qualify, the caregiver must provide more than 50 percent of their basic living expenses, such as food, clothing, housing, medical expenses. The care recipient does not have to live with the caregiver. Make sure to check with a tax professional for your particular circumstances.

Loudoun County offers this handbook of current programs and services available to older adults, people with disabilities, and caregivers.

AARP’s Family Caregiving Resources:

• AARP Caregiver Resource Guides:http://www.aarp.org/caregiverresourceguides
• AARP Prepare to Care Guides:http://www.aarp.org/preparetocare
• AARP Family Caregiving (articles and resources):http://www.aarp.org/caregiving
• AARP Family Caregiving (in Spanish):http://www.aarp.org/cuidar
• AARP Caregiver Helplines:
  
  • 1-877-333-5885 (English)
  • 1-888-971-2013 (Spanish)
• AARP Family Caregiving Facebook Group:https://www.facebook.com/groups/aarpfamilycaregivers
• Caregiving Instructional Videos:https://www.aarp.org/ppi/initiatives/home-alone-alliance.html
• Community Resource Finder:https://communityresourcefinder.org
• Live and Recorded Webinars:https://learn.aarp.org 
• Sally Hurme, ABA/AARP Checklist for Family Caregivers