Caregivers: How to Get Tax Credit & Financial Support

03 November 2020 by National Bank
Caregivers: How to get tax credit & financial support

About one out of four Canadians has provided care to a loved one with a long-term health condition, a mental or physical disability, or problems related to aging. Due to an aging and growing population, this number is trending upwards significantly. Here’s some advice and tax measures to help you support your loved ones.

What are caregivers?

Many illnesses or physical or mental disabilities can occur suddenly or develop over time. Those affected are often surrounded by their children, friends, parents and partners, who provide care to them and help them. These people are called caregivers. They provide physical, social and psychological support and fulfill specific needs on a voluntary basis, with no pay.

How can you be recognized as a caregiver?

The benefits and administrative requirements vary depending on the province or territory. In Quebec, you can get a certificate (French only) from a professional who works in the healthcare and social services sector, like a nurse, doctor, or physical rehabilitation therapist. If you meet certain criteria, you may be eligible for tax credits from the federal government without needing any particular certification indicating that you’re providing care.

When should you ask for help?

“Many caregivers feel like they can’t catch their breath,” explains Lina Ali, housing and homecare advisor for seniors at Visavie. “I often see people who are 40 to 65 years old taking care of their parents, but they also have to juggle between their career and raising their children. When a loved one gets sick, suffers from incontinence or starts experiencing memory loss, for example, this causes anxiety. It’s very stressful and sometimes it can be very sad. You have to be aware of your own limits,” she adds.

If you’ve been receiving care and notice your condition deteriorating, don’t wait. Make your own decisions while you still can. You could think about moving into a long-term care home, for example.

If you’re providing care to a loved one, make sure to get help as soon as possible. Open a file with the relevant authorities so they can give you a break by sending help, for example. According to the General Social Survey conducted by Statistics Canada in 2018, caregivers who didn’t get any support were much more likely to experience stress, dissatisfaction with life, and mental health issues.

What services are available in the public and private sectors?

Generally, certain services can be provided at home via nearby service centres. You can get help for things like personal hygiene, errands, cleaning, medical or healthcare services. Of course, the specifics vary depending on the province or territory in which you live.

Some community organizations can also provide support, like home visits to curb loneliness, for example. “I had a client who suffered from macular degeneration,” Ali shared. “He was a very knowledgeable man who loved to read. Because he couldn’t read on his own anymore, someone came over to read to him. It was extremely gratifying.”

There’s also a multitude of services available in the private sector, like nurses, medication delivery services, and pre-made meal delivery services. This could cost you, but government measures and tax credits can help cut down the bill.

What tax measures are there to support you?

In addition to the provincial and territorial governments, the federal government also provides certain measures to directly or indirectly support caregivers.

  • Through the employment insurance program, you could be eligible for benefits that could reach up to 55% of your gross salary, for a maximum of $573 per week (taxable). These benefits target three kinds of situations and vary depending on which one applies. There’s help for caregivers for a child, caregivers for an adult, and “compassion” benefits for those providing end-of-life care to a person.
  • There’s also the Canada caregiver credit. It’s a non-refundable tax credit (it applies to the tax you have to pay, but you won’t get it if you don’t owe any tax). It applies to people who take care of certain family members or in-laws (for both married spouses and common-law partners).
  • There’s also the non-refundable tax credit for home accessibility. While it isn’t meant for caregivers specifically, it could help you indirectly by improving the home of the person you’re supporting, or your own home if you live with the person you’re helping (in an intergenerational home, for example). This would allow you to install a wheelchair access ramp or a grab bar in the shower. There is an annual maximum of $10,000.
  • Find out about refundable and non-refundable credits for medical expenses. Depending on your financial situation, you could decrease the amount of tax you have to pay and even receive financial aid for certain expenses, like for medication or medical devices.
  • Finally, you may be interested in a registered disability savings plan (RDSP), which is available for people with a severe and prolonged impairment. It can help you pay for healthcare or professional home care.

Regardless of your situation, feel free to ask questions to your financial advisor to get a better idea of things. Most of all, don’t wait until you’re overwhelmed to ask for help.

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