Market Watch

How to Cut Your Family’s Elder Care Bills

(The Wall Street Journal – Encore – Glenn Ruffenach) — Among the biggest drains on retirement savings are the expenses associated with caring for an older family member – even before that person requires institutional care. If you’re serving as a caregiver, or soon will be, there are steps you can take to help reduce the size of those bills.

About one-third of the 65-plus population – and about two-thirds of those who have reached their mid-80s – need help with eating, bathing, paying bills and other daily tasks, according to a Congressional Budget Office report released last month. Fully 80% of those individuals still live in their communities, and they and their families spent at least $3 billion of their own in 2011 on long-term care, mainly at home. (That figure doesn’t include what they spent on nursing homes and other care facilities.)

As Kelly Greene reported this weekend in The Wall Street Journal, adult children—swamped by their elder-care responsibilities—often don’t have time to look for ways to trim such expenses. Here are some frequently overlooked ways to save:

Hire your own home-care professionals – or become one yourself. Yes, local home-care agencies can be a good source of paid help. The national median rate for home care through a licensed agency is $19 an hour, according to Glenworth Financial. But as families grow more familiar with an older adult’s needs and how to find such workers, many do the hiring directly—eliminating the agencies’ middleman fee. Separately, if your parents or in-laws have long-term-care insurance, and if you provide caregiving help, you might qualify for reimbursement through the policy.

Take the tax breaks. The paperwork can be a hassle, but many elder-care costs qualify for a medical-expense deduction from federal income taxes. Among them: Home improvements made with a doctor’s prescription. Such remodeling could include adding an elevator, central air-conditioning or ramps.

Remember the veterans. An “aid and attendance” benefit is available to families of wartime veterans. This program pays as much as $2,054 a month to married veterans who qualify; single veterans and surviving spouses can qualify for smaller payments. There are income limits, but the rules allow families to deduct unreimbursed medical expenses to help determine eligibility. To find help in navigating the process, visit the “Locations” page at the Department of Veterans Affairs website, and then click on “State Veterans Affairs offices,” “Veterans Service Organizations” or “Regional Benefits Offices.”