14 tips to help you find money
(and free resources) for care at home
1. Benefits CheckUp. Millions of older adults are eligible for federal and state benefits but are not receiving them, including assistance to pay Part B and Part D premiums for Medicare benefits. This is unfortunate because these programs can help with housing, meals, transportation, health care, prescription drug costs, legal services and utility bills, just to name a few.
Benefits CheckUp, a website created by The National Council on the Aging, helps older adults quickly and easily find out which benefits they qualify for, and how to get them. (Many are available regardless of income.) This is a free service and is completely confidential. It does not require your name, address, phone number, Social Security number, or any other information that could be used to identify you.
Simply complete the online questionnaire. In a few minutes, you'll have a list of programs for which you or your loved one most likely qualifies, including phone numbers and addresses. It also includes step-by-step instructions on how to apply for the benefits. To visit their website, click on Benefits CheckUp.
2. Benefits CheckUp Rx, a new addition to Benefits CheckUp. BenefitsCheckUpRx can help you find out if your elderly loved one is eligible for extra help paying for their Medicare prescription drug costs. Generally speaking, their income must be less than $15,315 if single ($20,535 if married), and their financial resources must total less than $11,990 if single ($23,970 if married). People who qualify will have low or no deductibles, low or no premiums, no coverage gap (the infamous donut hole), and pay much less for their prescriptions.
Complete the online Medicare Rx extra help application to see if your loved one might be eligible for this valuable benefit. This is a free service and is completely confidential. It does not require your loved one's name, address, phone number, Social Security number, or any other information that could be used to identify them. At the same time, you can also find out if your loved one might be eligible for other programs that can help them with their health care and other costs. To begin, simply click on BenefitsCheckUpRx.
3. Social Security Divorced Spouse Benefit. If a retiree was married for at least 10 years, he or she would be entitled to a Social Security retirement benefit equal to the larger of:
- a benefit based on his or her own work history, OR
- a benefit as a divorced spouse (one-half of their ex's benefit even though he or she may have already passed away).
If the benefit based on work history is larger, the divorced person will continue to receive that benefit, adjusted each year for inflation, for the rest of their life.
On the other hand, if the divorced spouse's benefit is larger, the divorced person will begin to receive that amount as soon as it is approved by Social Security. They will also be entitled to a lump-sum payment for all of the prior months that they were eligible for spouse's benefits but didn't collect them. Generally speaking, the amount of the lump sum will be the difference between what Social Security actually paid based on their own work history and what they should have been paid as a divorced spouse.
4. VA Special Pension with Aid and Attendance (A&A). Offered by the U.S. Department of Veterans Affairs (the VA), the A&A Special Pension is paid in addition to other VA pension benefits. It can help pay for care in the home, in an assisted living facility, or in a nursing home. It is not dependent upon service-related injuries.
Because the A&A Special Pension pays up to $1,554 per month, many veterans will not have to live in Medicaid or VA nursing homes. Instead, in-home care and assisted living will be affordable options. Most veterans will qualify if:
- they served at least one day on active duty during a period of war, and
- they require the regular assistance of another person to perform everyday functions and activities that people usually do without help.
For more information, including how to apply, visit our A&A Special Pension page.
5. Eldercare Locator. This free public service was developed by the U.S. Administration on Aging. It helps older people and their caregivers find state and local support services that allow them to live independently and safely in their homes and communities for as long as possible. Look for the resources you need by following the directions on their website, Eldercare Locator. Or, call their toll-free telephone number 1-800-677-1116, between 9 am and 8 pm weekdays, Eastern Time.
6. Medicare. If your loved one has become weak or has difficulty walking, both of these conditions can be at least partially overcome with proper physical therapy. If your loved one's doctor agrees, ask the doctor for a written prescription for physical therapy. Medicare will pay for therapists to come to your home to provide the therapy IF it is provided by a Medicare-certified agency. (Important: Less than half of home health agencies are certified. Care at home can be very expensive if you have to pay for it out of your own pocket. Ask the agency if it is Medicare-certified BEFORE you hire them.) When the agency does its initial evaluation of your loved one's needs, they'll be able to tell you how long Medicare will pay for your loved one's therapy.
7. Supplemental Security Income (SSI). If they qualify, SSI can supplement your loved one's other benefits so that they receive a minimum income each month. In general, if their income (including Social Security Retirement or Disability benefits) is below $674 (2009 amount) per month for individuals, or $1,011 (2009 amount) for couples, SSI pays the amount necessary to bring their income up to the minimum amount. For more information, read Social Security's pamphlet "Supplemental Security Income" (click on the link). You should also call Social Security's toll-free number, 1-800-772-1213, to find out if your loved one might be eligible for SSI.
8. Medicaid. If your loved one qualifies for SSI, he or she will probably also qualify for Medicaid. If they do, they won't have to pay Medicare's $96.40 monthly Part B premium, and they won't need to carry a separate Medicare Supplement insurance policy.
9. Food Stamps. And, if they qualify for SSI, they'll also probably qualify for food stamps. That will help stretch their food dollars each month.
For more information about SSI, Medicaid and Food Stamps, go to Social Security's main page (click on www.ssa.gov). In the middle on their home page, just below the horizontal red and blue bars is a box titled Questions about. Use the up/down arrows in the right of the box until Supplemental Security Income appears. Then click on Go. That will take you to a page with a number of different questions (and answers) about the SSI program.
10. Reverse Mortgage. This is a loan against the equity in a home. It provides tax-free cash advances to the homeowner, but requires no payments during the term of the loan. The proceeds from a reverse mortgage are available as a lump sum, fixed monthly payments for as long as your loved one lives in his or her home, a line of credit; or a combination of these options.
These proceeds can be used for anything: daily living expenses; home repairs and home improvements; medical bills and prescription drugs; pay-off of existing debts; education; travel; long-term health care; retirement and estate tax planning; and other needs your loved one may have.
For more information about reverse mortgages, click on AARP's Guide for Consumers.
11. Life Settlement. When they were younger, many seniors purchased life insurance policies as their situations in life changed — children were born, income (and lifestyle) increased, a business was started — to name just a few. After retirement, however, their life insurance needs have probably changed. In other words, they are still paying for life insurance that is no longer needed.
Instead of canceling the insurance just to save a few premium dollars, these "surplus" policies can be used to pay for in-home care, assisted living, or nursing home care that's needed now, preserving many of their primary assets as part of the family estate, or until it more convenient to sell.
This option is called a Life Settlement. For many people, it has become a very valuable financial tool.
A Life Settlement is simply this: A policyholder sells his or her life insurance policy to an institutional investor. Typically, these investors pay a lot more policies than their cash "surrender" values. Because most life insurance values are guaranteed and disconnected from the economy, there is no fluctuation, as is the case with real estate and stocks. And, almost every type of life insurance contract can be used for a Life Settlement.
"Life Settlements are not complicated, with transactions often completed in 30 to 60 days," explains Chris Orestis, principal, Life Care Funding Group, a firm that specializes in insurance matters and Life Settlements.
A Life Settlement is an alternative way for seniors to tap into an existing asset to generate liquidity to cover immediate needs. The seller of the life insurance policy gets a lump sum payment. Since it is not a loan, the funds are unrestricted and require no repayment. The gains of a Life Settlement can be tax deductible if used to pay for in-home care, assisted living or skilled nursing care. (Talk to a qualified tax accountant to learn how deductibility applies to your own situation.)
For people intimidated by the thought of selling their home or liquidating other assets to secure the funds they need, a Life Settlement is a welcome alternative source of funds, according to Orestis.
"With billions of dollars worth of life insurance owned by people older than 65 today, tapping into Life Settlements as an alternative funding option for senior housing and care is gaining serious interest," he said.
Life Care Funding Group can be reached at lifecarefunding.com
Finally, you may be entitled to one or more Income Tax deductions if you provide more than half of your loved one’s financial support ...
12. you can probably claim them as a dependent on your federal income tax return;
13. you may be able to deduct some of their medical expenses; and
14. you might qualify for a tax-deduction if your mother and/or father moves into your home, and you modify your home to accommodate them. If so, at least a portion of the expenses you incur for modifying your home COULD be deductible in the year you pay them.
See a qualified tax accountant for more details.
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