Inflation is impacting Canadian caregivers, but tax relief can help

Caregiving has always been a tough job, but it’s getting even tougher thanks to inflation and the rising cost of living.

Forty-five per cent of caregivers are feeling the financial impact of caregiving compared to pre-pandemic numbers (at 22 per cent), according to the Ontario Caregiver Association. And one in five caregivers are using credit to pay for additional caregiving expenses.

“That can put caregivers into a debt situation that’s incredibly hard to crawl out of,” said Laura Tamblyn Watts, president and CEO of CanAge, a national seniors’ advocacy organization.

On average, caregivers in Canada provide between 20 to 30 hours of unpaid care every week, “and our health and social systems entirely rely on that free care provision,” said Watts. But a combination of inflation, higher interest rates and lower home values has created a perfect storm for caregivers, who are now struggling to meet their own needs.

If you’re a caregiver who must take time off work, not only are you losing your employment income, but you also have to pay for expenses out of pocket. Inflation means caregivers must stretch their dollars even further for needed expenses, from the cost of gas for transportation to medications that aren’t covered by provincial healthcare plans.

“Many (caregivers) who were working either flexible hours or had taken a break from the paid workforce can no longer do so,” said Watts. “This is especially true for women.”

For family members that are sharing caregiver responsibilities, the skyrocketing costs of travel and the constraints of new workplace rules could be taking away choices they had during the pandemic and making it harder for families to take care of loved ones.

Many elderly caregivers are using their own money to support loved ones in their own age group, such as a spouse or sibling. These caregivers are often overlooked, said Watts, but they’re especially hard hit since they’re on a fixed income.

While the Canada Pension Plan and Old Age Security are indexed for inflation, “there’s still a significant time lag between the costs that are rising so sharply and what their fixed incomes are,” said Watts.

An additional financial stress is the skyrocketing cost of relief care — if it’s even available — since homecare agencies are in extremely high demand. “When you have a lack of opportunity for relief care, it means that caregivers burn out more,” said Watts. That, in turn, puts downward pressure on the healthcare system.

“There are a lot of community supports but they’re extremely difficult to navigate,” said Bonnie-Jeanne MacDonald, director of financial security research with the National Institute on Ageing at Toronto Metropolitan University.

“Families are expected to care for aging Canadians until they can’t, and then they go into the nursing home,” she said. But long-term care isn’t covered by provincial healthcare plans, nor is it part of the Canada Health Act.

The long-term care system suffers from systemic problems that existed long before the pandemic — but COVID-19 brought those issues to the forefront. Despite that, many seniors still aren’t getting the care they need in nursing homes, if they can even get into one.

“The government should be better at supporting caregivers, not only because it’s the right thing to do, but it’s also to help preserve this cultural practice (of families taking care of their elders),” she said. And we’re “at the tip of iceberg” when it comes to the increasing costs of caregiving.

There are, however, some existing supports available to caregivers. Some may be eligible for the Canada Caregiver Credit, a non-refundable tax credit (which means it reduces your tax bill) to caregivers who support an impaired dependent. This could be a spouse, common-law partner, child, grandchild, sibling or close relative with a disability, injury or illness, who depends on the caregiver for support, including food, clothing or shelter.

Caregivers may also be eligible for the Medical Expense Tax Credit if they’re paying out of pocket for medical expenses, such as nursing home care. The Disability Tax Credit applies to those taking care of a dependent with a persistent physical or mental impairment. And the Home Accessibility Tax Credit is available to caregivers who’ve made a renovation to help them provide care, such as installing a wheelchair ramp or walk-in bathtub.

There are other options, too. CanAge is seeing a trend toward different housing models, like a Golden Girls approach where people of the same age share a home together and provide mutual support. And Canada HomeShare is a housing initiative that matches students in need of housing with older adults in exchange for providing support around the house.

But it’s a much larger issue, without a simple solution. “Ironically, caregivers are being priced out of providing free care,” said Watts.