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When it comes time to find in-home care for your parent, friend, or relative, paying for this important service is probably the last thing on your mind. After all, it’s hard enough having to find a perfectly matched, capable, and compassionate caregiver to meet your loved one’s changing needs. Nevertheless, it’s important that you and your family draw up a financial plan to cover the cost of care. This helps to ensure that your loved ones are comfortable, secure, and cared for as they age and that your family’s financial resources are preserved in the process. The good news is that there are a number of resources and options available to help you with that plan. To help you weigh each option and plan accordingly, we’ve compiled the following list of 5 ways to pay for your beloved elder’s home care needs. Of course, as with anything, there are pros and cons to consider with each option, so it’s important to do as much research as possible.


Long-Term Care Insurance

Since individuals who require non-medical in-home care are not sick in the traditional sense, traditional health insurance does not provide for these needs. Having a Long-Term Care Insurance policy in place before any significant changes in the health and mobility of your loved one guarantees that they will have complete home care coverage assistance available if and when they need it.


Veteran’s Benefits


The Veteran Aid & Attendance Pension program offers individuals and surviving spouses an additional method of meeting home care costs. Whether or not you or your family member qualifies for the A&A program, the VA allows households to deduct the annual cost of paying for in-home care when calculating their regular pension benefit. This annual cost is then used to calculate the benefit based on a new “countable income” and allows families earning more than the pension benefit to receive a disability income from the VA.


Asset Conversion


There are some options available to families with non-liquid assets that allow them to convert those assets to help cover things like home care expenses. Reverse mortgages, home equity lines of credit, Rex Agreements, and Equity Key are real estate-based asset conversion programs that provide seniors with financial solutions to their long-term home care needs. In addition to these programs, death benefit loans, life settlements, life care assurance benefits, and viatical settlements offer seniors a variety of methods for converting their life insurance policies to pay for home care as well.


Medicaid Programs


There is a number of state-specific initiatives designed to help keep seniors who qualify for Medicaid out of nursing homes and living comfortably in their homes. These programs will contribute to cover the cost of home care in cases where that care can be provided at an expense below that of a nursing home.


Tax Credits & Cost of Care Reductions


There are a variety of state and federal programs, initiatives, and tax credits that can significantly lower your family’s tax burden actually reducing the overall cost of care. Research the following options to find out if your family member qualifies: Alzheimer’s Respite Care, Elderly and Disabled Tax Credit, Federal Elderly Care Tax Credit, LIHEAP – Aid for Energy Costs, Medical Expense Tax Deductions, NFCSP Respite Care, State Elderly Care Tax Credit, Veteran’s Administration Respite Care.





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