More than one-third of families who financially contribute to the care of a loved one due to advanced age or illness are out of pocket an average $430 per month. And while tax credits are available in some cases, many caregivers aren’t taking advantage of them, says a new CIBC poll.
Three-quarters of caregivers who provide financial support admit they’re making financial sacrifices as a result of their caregiving responsibilities, including cutting back on expenses (59%), dipping into personal savings (41%) and saving less (41%).
“The good news is that you may be able to take advantage of some tax credits to lessen the financial burden, even if you’re sharing the costs [with others],” says Jamie Golombek, managing director, Tax & Estate Planning, CIBC Financial Planning and Advice.
Golombek co-authored the new report, entitled Who Cares? Easing the financial burden for caregivers, with Debbie Pearl-Weinberg, executive director, Tax & Estate Planning, CIBC Financial Planning and Advice.
You can split some tax credits among siblings and parents
If a parent requires full-time care from a personal support worker and you choose to split the bill with the other parent or siblings, you may each be able to claim the Medical Expense Tax Credit for these costs. You may each also be eligible for a 15% non-refundable Canada Caregiver Credit up to a shared maximum of $6,986, says Golombek.
There is also the Home Accessibility Tax Credit that can provide up to a $1,500 credit for renovations and other one-time expenses, as well as the Disability Tax Credit which may provide tax savings of $1,235 federally, plus provincial or territorial tax savings, for individuals with a disability or those who care for them.
Despite the costs, the poll showed that 74% of caregivers feel grateful for the opportunity to help, and 53% would do so even if it put their own financial future at risk.