Episode #49: A Conversation About: Caregiving Part 3 Financial Caregiving Continued
In this episode, the X-Podcast team continues their series on caregiving. They explain financial caregiving and provide examples, tips, and information about it. Xiomara talks about her personal experience in financial caregiving and gives her lived-experience advice on how to manage it.
They discuss financial planning while caregiving for a loved one, because it can come with extra expenses. Xiomara gives tips on smart planning and how you can manage your finances while providing great care. She also discusses legal prerequisites for becoming a financial caregiver.
The team also discusses the importance of family caregiving. They explain what the role of family caregivers is in the healthcare system and how to manage it. Xiomara also gets into the pros and cons and the limitations and challenges she faces as a family caregiver and provides some insight and tips about it.
Xiomara A. Sosa
Creator, Host, and Executive Producer
Listen to this episode at
Listen to all episodes at https://blubrry.com/studio_talk_mental_health/
The X-Podcast on social media:
Donate https://www.studiotalkpodcast.net/donate
YouTube https://www.youtube.com/@thexpodcastmentalhealth
Website https://www.studiotalkpodcast.net/
Bluesky https://bsky.app/profile/counselorxasosa.bsky.social
Facebook https://www.facebook.com/profile.php?id=61563518781923
Instagram https://www.instagram.com/counselorxiomaraasosa/
#TheXPodcast #MentalHealth #Counseling #Therapy #Caregiving #FamilyCaregiving #CulturalNorms #MultigenerationalLiving #IntergenerationalLiving #FinancialCaregiving
How to Provide Financial Caregiving
Talk about finances with the person you are caring for and care about. Try to get a full picture of their financial situation, including potential areas of stress and concern. This can be difficult, particularly between parent and child.
Be sensitive to people’s need for independence. Consult with the person you are helping. Ask how you can help. Offer to start with small tasks, such as paying bills. Ask for permission to take over responsibilities, if appropriate. Honor their wishes as much as possible in decisions and actions.
If appropriate, seek input from others. If other family members want or need to be involved, it is better to include them sooner rather than later, before misunderstandings occur. If the family cannot agree, specially trained elder care coordinators can mediate in certain states.
Make a list of all expenses and debts, including utilities, mortgage or rent payments, car payments, insurance, real estate taxes, and more.
Document all income, including social security, pensions, retirement distributions, survivors’ benefits, royalties, or other inflows, whether regular or sporadic.
Create a budget. A written budget should include all income and expenses, both fixed and irregular. Make a plan for how to pay for fixed expenses (such as utilities, mortgage or rent payments, insurance, etc.), food, transportation, some estimation of out-of-pocket medical costs, and recreation. A calendar, either paper or electronic, can be useful for keeping track of when payments are due.
Make an inventory of accounts, insurance policies, credit cards, website user IDs, and passwords. Keep the inventory somewhere safe and secure. A password-protected spreadsheet or a piece of paper in a secure location can work. There are commercial electronic password solutions available for a fee, such as LastPass and 1Password.
Get access to accounts. This may be as simple as getting your name added as a joint account holder or having the primary account holder give verbal agreement authorizing you to speak on their behalf. You may be tempted to use the account holder’s login credentials to act on their behalf; however, this is not recommended since there may come a point where the account owner will no longer be able to confirm they have permitted you to use their logins.
Get authorized to speak on behalf of your care recipient. The easiest way officially to make decisions on behalf of someone else is to execute a durable power of attorney, which is a legal document that appoints someone to act on someone else’s behalf. The forms are generally available on the web for free or for a nominal fee. They require witnesses or notarization to be valid. Make paper and electronic copies of the power of attorney document, as many organizations will require a copy before they speak to you about someone else’s finances.
Simplify and automate. Set up auto-pay for regular bills. Close all but the most necessary of credit card accounts. Consolidate assets if appropriate.
Limit risk if appropriate. If the person you are caring for has cognitive problems, it may make sense to get them a reloadable debit card that you manage, a credit card with a low limit, or an ATM card for a small bank account. This allows them independence but limits risk. Commercially available apps, such as Carefull and EverSafe, offer remote monitoring of financial transactions. They will alert authorized persons to unpaid bills and unusual activity, for example.
Keep records of what you’ve spent money on and any money you spend on their behalf. The first will be helpful if others have questions, and the second may be helpful when you file your taxes.
Don’t forget about taxes. Income taxes will need to be filed, real estate taxes need to be paid, and required minimum distributions (RMDs) from retirement accounts will need to be made, even in the face of serious illness and impairment. Being proactive is very important and will save penalties and complications.
While this list of things to do to begin financial caregiving duties may seem overwhelming at first, the earlier you start, the better. If the person you’re caring for is still competent, you may not need to do them all at once. It is a good idea, however, to review the list regularly. As a financial caregiver, you’ll want to make sure that no new information, accounts, or debt has crept up since you put a plan in place
Taking care of someone else’s money-related matters — whether it’s as simple as paying a few bills or as formal as getting a Financial Power of Attorney — is called financial caregiving.
It is very common for caregivers to begin with taking care of simple personal matters, but transition into providing financial care over time. Because needs can be fluid and change quickly over time, it’s important to understand potential legal duties and liabilities ahead of time. CaringInfo provides resources for understanding financial caregiving and the pitfalls to avoid. Learn how to take on this important role while protecting yourself and your care recipient at the same time.
Financial Planning
Taking care of a loved one can come with extra expenses, but with smart planning, you can keep your finances in check while providing great care. Here are a couple of things to keep in mind:
Budgeting for Caregiving Costs: Start by planning for the money you’ll need to spend on caregiving. Keep track of what you spend on medical bills, transportation, and even the groceries your loved one needs. This will help you see where your money is going and where you might be able to cut costs if necessary.
Exploring Financial Assistance Options: There are resources out there to help ease the financial burden of caregiving, so don’t go it alone. Look into programs such as the Medicaid waivers. You can also reach out to a local caregiver support organization. They can help you explore your options and find the resources that fit your needs.
What Are the Legal Prerequisites for Becoming a Financial Caregiver?
Financial caregiving does not need to be authorized through official paperwork. Many people manage someone else’s financial interests without any legal documents.
However, formal documents such as a financial power of attorney can be very useful before the person receiving care becomes increasingly unable to make decisions for themselves.
Many institutions will not even speak with anyone other than the account owner without written documentation. If no financial power of attorney has been executed before a person becomes unable to speak for themselves, either through illness or dementia, the caregiver will have to petition a court for authorization, such as via a power of attorney.
How much can a family member get paid to be a caregiver?
Family caregivers who get paid can earn around $12 to $20 per hour or approximately $3,572 monthly, depending on the program type, location, and other factors. Oct 22, 2024
Family caregiving means helping a loved one who needs extra help with daily tasks. This person may be chronically ill, disabled, or elderly. While it can be rewarding, it can also be draining.
Thankfully, some states and programs provide caregiver compensation, but the exact amount varies widely. So, how much do family members get paid for caregiving? Family members who get paid for caregiving services may earn up to $20 per hour or even a bit more.
Taking care of a family member means you wear many hats just to ensure your loved one is okay. You might remind them to take their medications, schedule doctor visits, and help them move around. If they’re older or not feeling well, you could also help with bathing, dressing, and cooking.
But it’s not just physical tasks — you’re there to listen to their worries, cheer them up, and keep them company. And you’re probably taking care of household tasks, such as laundry, groceries, and cleaning. While many family members care for loved ones without formal compensation, you can get paid to care for your family.
Importance of Family Caregiving
The Role of Family Caregivers in the Healthcare System
Family caregivers often fill gaps in the healthcare system that professional services might not. They help manage long-term health issues, make sure their loved ones take medications correctly, and support them all from the comfort of their home. This ensures that loved ones receiving care at home are healthier. Also, it takes some pressure off hospitals and care homes. If not for the tireless efforts of family caregivers, the healthcare system would probably struggle to keep up.
Emotional and Financial Impacts on the Caregiver
Looking after someone you love can be great, but it can be really hard work sometimes and might even wear you down. Aside from being physically tiring, it can be emotionally draining, too. Watching a loved one struggle with illness or aging can take a toll on your mental health. Without the right support, such as counseling or respite care, this can lead to stress, anxiety, and even depression.
Caregiving can be a strain on your finances, too. According to AARP, many people who provide unpaid care to their family members spend roughly 26% of their income on care-related expenses.
But that’s not all. If you have to cut back on work hours or leave your job to care for a loved one, that usually means you’ve lost your income and any other benefits that come with your job.
Factors Influencing Payment for Family Caregivers
Like many other family caregivers, you may provide unpaid care out of love. The good news is that some programs pay you to care for your loved ones who need extra support. That said, the amount you can earn varies greatly depending on a few factors.
State and Local Programs
Many states have Medicaid programs that let family members get paid for caregiving through Medicaid waivers or Home and Community-Based Services (HCBS). The details, payment rates, and eligibility rules can be different depending on where you live because each state has its own laws.
In Pennsylvania, the Medicaid Waiver Program allows family members to become paid caregivers by becoming Home Health Aides for their loved ones. In Colorado, the Family CNA program lets those who qualify receive help with daily tasks from a family member who is paid for their caregiving.
If you’re looking to get paid for caring for your loved one, check your state’s Medicaid program to see if it offers caregiver compensation and find out what you need to do to qualify.
What is a Durable Power of Attorney?
There are two kinds of durable powers of attorney.
A durable financial power of attorney is a document specifying who is authorized to manage your financial affairs if you become incapacitated. This person is called an agent.
Separately, a durable healthcare power of attorney (which is often part of an advance directive) appoints someone (again, your agent) to make medical decisions on your behalf.
What Obligations or Liabilities Do Financial Caregivers Face?
Protecting Those Under Your Care from Financial Scammers (and What to Do If They Have Already Been Victimized)
You are immersed in caregiving—doctor appointments, transportation, communication—all the various activities that are so important. Now add in having to think about bad actors who want to take advantage of your vulnerable position to commit outright financial fraud. I mean, aren’t you doing enough already? Well, of course you are!
Unfortunately, there are people in the world who not only don’t care about your best interests but who would abuse other people’s personal information if they get their hands on it.
Data breaches are rampant today, and personal data of all kinds is ending up in the wrong hands through absolutely no fault of the victim. From healthcare providers to banks, many of the institutions that we depend on in our everyday lives are being breached. Therefore, everyone needs to protect their data at a personal level and not be complacent.
Sadly, the criminals even specifically target older persons, who often have good credit scores and assets.
So, what can you do proactively to prevent someone from scamming you or the person you are caring for? What can you do when that has happened and you are left dealing with the aftermath? Here are specific steps caregivers can take to prevent scams or fraud.
Anyone who accepts the responsibilities of a caregiver must be aware of several potential liabilities and legal duties that accompany the role.
Separating Your Finances
The agent in a financial power of attorney has a legal and ethical responsibility to act in a “fiduciary” capacity, which means you are required to act in the best interest of your client or care recipient, as well as prevent any conflicts of interest.
A bigger difference between an informal and formal legal relationship is that the financial power of attorney also separates your finances from actions you take on behalf of your care recipient.
For example, as someone’s agent, you can make financial commitments on their behalf. They would be responsible for paying those costs out of their own money; you would not be personally responsible for them.
If you don’t have the legal documents to separate your finances from the recipient's, be cautious about signing contracts or agreements for treatment or services on someone else’s behalf.
If you sign paperwork that asks you to be the “responsible” party (or guarantor or cosigner), AARP explains that you may be personally liable for the expense. Always read everything before you sign, and have someone explain the paperwork if you don’t understand. You don’t want to be surprised with a big bill with your name on it a few months down the road.
Providing a Standard of Care
If you are in charge of an elderly person’s finances, you must use that money properly, purchasing necessary services for the benefit of the person to whom care is given. Just like you must provide a clean and safe environment, nutritious meals, clean bedding, and clothes as a caregiver, failure to provide care (Source: Dr. Robert Stall’s Caregiver’s Handbook) is a form of abuse or neglect.
All states have passed elder abuse laws, though the specifics vary. Caregivers are bound by these laws in two ways: not to abuse the elder person (physically, mentally, or monetarily) and to report any incidents of abuse or suspected abuse. Contact your county mental health services for guidance.
Challenges and Limitations
As you explore payment options for caregiving, you might encounter some challenges. Programs often have specific eligibility rules you need to meet, and you’ll likely need to show proof of the care you provide with documents.
Despite these hurdles, learning about different programs and their specific details can help you find the right support for your caregiving needs.
Conclusion
While many caregivers provide unpaid care, there is growing recognition of their important role in supporting loved ones and the healthcare system. Advocacy efforts are working toward better support and improved compensation for family caregivers and increased funding for caregiver programs.
Resources
https://www.thex-studio.org/resources
Guides for Managing Someone Else’s Money – The Consumer Financial Protection Bureau (CFPB)
What Caregivers Should Know About Managing a Loved One’s Money – AARP
Family Caregiver Alliance: A community-based organization that supports families providing long-term care
Caregiver Action Network: This offers resources for family caregivers, including a Caregiver Help Desk
The National Alliance on Caregiving: A resource for help and connections
AARP: A resource for help and connections
VA Caregiver Support Program
Offers programs for general caregiver support services and comprehensive assistance for family caregivers
State Medicaid programs
Some states offer paid caregiver programs, also known as consumer-directed personal assistance programs
211: A service that can connect callers to local assistance, including specialists
CarePages: Free web pages that allow caregivers to connect with friends, family, and others for support
Religiously-based services: Many religious and cultural groups offer support for caregivers
The National Institute of Aging, The CDC, The American Cancer Society, The American Heart Association, and The Alzheimer's Association.
You can also call 211 to speak with a service professional.
References
https://www.caringinfo.org/planning/financial-matters/how-to-provide-financial-caregivin/
https://chds.hsph.harvard.edu/family-caregivers-financial-well-being/
https://www.caringinfo.org/planning/financial-matters/how-to-provide-financial-caregivin/
