Caregiving? Real Wealth Managers Can Help Minimize the Financial Impact
Planning for caregivers of the sick and the disabled is an important role for Real Wealth Managers™ who are well connected to their clients. Often the biggest concern for caregivers is the maintenance of income sources while they give care to their sick loved ones.
This can cause stress and burnout and financial pressure, particularly in a palliative care situation. The tax return may also be more complicated, but that can be a good thing because a bigger tax refund may result. Consider providing information services and advocacy for caregivers when illness strikes in the family:
Employer-paid leaves. Many employers are accommodating when their employees have to take time off to give care. Speaking to the HR department at work can uncover a host of assistance, including the opportunity to use up banked time or vacation time. However, if you must take a leave without pay, consider the following:
EI Compassionate Care Coverage.Employment Insurance will provide benefits for a maximum of six weeks of compassionate care benefits if the family member is at risk of dying in next 26 weeks. This can be used for psychological or emotional support; arranging for care by a third party or directly providing or participating in the actual care.
To qualify, there must be a 40% or more decrease in income, the caregiver must have accumulated 600 insured hours in the last 52 weeks and there is a two-week waiting period. The maximum assistance for 2013 is $501 per week.
Investment Accounts. The family may have to withdraw money to fund the non-working gap period. This is an important time for council from the investment advisor. Taking a tax-free return of capital from one of the family’s non-registered accounts can make sense. The same is true of a TFSA. A less attractive option from a tax viewpoint is to withdraw from a registered account as the amounts will be taxable in the year withdrawn. Use of the Knowledge Bureau’s Income Tax Estimator can help with “what if” scenarios to judge resulting tax liabilities.
Self-Employment. The business owner will suffer economic loss as well; possibly having to hire extra staff to cover workloads. If that results in a loss, other personal income of the year can be offset by the loss if the business is unincorporated. A tax professional will help to project income and losses and may be able to adjust quarterly instalment payment requirements as well.