One of the first things you’ll hear about caring for a family member with Alzheimer’s is that it’s a major financial commitment — and while that’s not easy to hear, it’s absolutely true. Whether you provide in-home care yourself, hire a professional caregiver, or move your loved one to an assisted living facility (or any combination of the above) the costs of care are going to take a significant bite out of your monthly budget.
Still, some advance planning and careful organization can help make sure your loved one gets the quality of care they deserve, at a cost level you’re able to sustain over the long term. What’s more, you can offset many care-related expenses by taking advantage of tax credits, deductions, financial support programs, and low-cost (or even free) community services — provided you know where to look.
Here, we’ll share some useful tips for managing money as an Alzheimer’s caregiver, so you can make the most of the resources available to you.
Review your loved one’s legal and financial documents, to avoid any surprises.
When you take responsibility for a family member with Alzheimer’s, you’re taking on the management of an entire household. So now’s the time to get a clear overview of your loved one’s financial and legal situation, to prevent any unpleasant surprises down the road.
Start by gathering bank and brokerage account info (even if you haven’t been given access to your loved one’s accounts yet), along with title deeds, mortgage papers and other ownership statements. Total up all monthly bills — as well as outstanding debts, retirement and Social Security benefits, stocks and bonds, and miscellaneous financial assets and liabilities. Make sure you’ve also got signed, up-to-date copies of your loved one’s living will, last will and testament, power of attorney documents, and other important legal paperwork.
If the person with Alzheimer’s is able to clearly understand a financial discussion, now’s the time to talk with them about their wishes for the use and distribution of their money and property. You may also want to meet with a financial advisor, who can help you create a plan for handling any outstanding balances (positive or negative), manage investments and other assets, and identify tax deductions and financial resources that may reduce the costs of care.
Put together a long-term care budget — and consider combining several services.
Alzheimer’s affects everyone differently, and it’s not always easy to predict what forms of care your loved one will need, or for how long. That means it’s important to plan ahead, factoring in costs that may increase as the disease develops into its later stages.
If you plan to care for your loved one at home, total up the monthly costs of prescription and over-the-counter (OTC) medicines, personal care supplies, and home safety modifications like grab bars, wheelchair access ramps, anti-slip mats, monitoring systems, locks, and alarms. If you’re planning to move your loved one to an assisted living facility, on the other hand, the monthly rate may include many of these costs — but you’ll still want to read the fine print carefully, to find out whether they charge extra for services like housekeeping and laundry.
Even if you’re serving as your loved one’s primary caregiver, you’re eventually going to need help from one or more in-home care professionals — especially as the disease progresses, and home care turns into a 24/7 job. You may get a more affordable rate by hiring caregivers directly instead of going through agencies (which often charge a commission of 20 percent or more). If you decide to go that route, be sure to check the caregiver’s references, verify their skills, and spend some time with them in the home environment to ensure they’re a good fit.
The most cost-effective strategy is often to combine several different solutions — for example, taking your loved one to an adult day center to socialize, caring for them yourself in the evenings, then bringing in a part-time caregiver to stay with them overnight. If cleaning or preparing meals is stressful for you, you might consider hiring a part-time housekeeper or signing up for a meal delivery service. Some Alzheimer’s support groups also organize community care programs, which may be available free or at very low cost.
Research care coverage programs, tax breaks, and other financial support options.
Many public and private programs exist to help family members offset the costs of caring for loved ones with Alzheimer’s. Medicare covers a number of prescription drugs, some hospital and doctor fees, and certain home healthcare and nursing services. If your loved one receives Supplemental Security Income (SSI), they’re also automatically eligible for Medicaid, which covers nursing home care, as well as residential and community care in some states.
Long-term care insurance can cover many costs of residential facility care, as well as in-home care — however, the policy usually needs to be in place before an Alzheimer’s diagnosis is received. Alternatively, you may be able to get a loan from your loved one’s life insurance policy, or make withdrawals from their retirement account or pension. And if your loved one ever served in the military, they’re likely eligible for veteran benefits that’ll cover long-term care.
The Internal Revenue Service (IRS) provides several big tax breaks for caregivers. If you keep detailed records of all care-related costs, you can claim deductions on most of those expenses. And if you pay a caregiver to help your loved one while you’re at work, you can also qualify for the Household and Dependent Care Credit by claiming the person in your care as a dependent. Before you file your taxes, check with a certified accountant to make sure you’re getting every credit and deduction you’re eligible for.
Caring for a family person with Alzheimer’s will require significant adjustments in most areas of your life — and money management is certainly no exception. However, a combination of coverage programs, tax deductions, and strategic care planning can make all the difference between a crippling financial burden and a sustainable set of monthly expenses. With careful research and a bit of creative number-crunching, you’ll be able to ensure your loved one gets the quality of long-term care you want them to receive, at a cost you can afford.
