Caregiving is expensive in ways that many caregivers themselves do not account for. In addition to the emotional and physical strain that comes with caring for an elderly parent, there are the expenses of travel, time off work and a variety of other costs – both big and small – that you incur. Too often, children of senior adults don't properly account for all the finances related to helping their parents. You certainly should, of course, and when you do, you should also ensure you're getting the most out of the tax write-offs available to you.
Here is Comfort Life's basic guide to means of government financial support for caregivers of the elderly in Canada. Included are both tax credits and benefits available. This is intended to be informational in orientation, to highlight credits that caregivers of elderly family may not be aware of. Be sure to personally follow up this advice with expertise from a financial professional as well as information from the Canada Revenue Agency*.
Basic tips and overview
Do yourself a big favour and keep a ledger of all expenses you incur in relation to caregiving. While some caregivers may have some discomfort about doing this ("love keeps no accounts," we know), there are obvious practical benefits to this, most notably the ability to get tax refunds, and to apply for other aid that may be available. Doing all you can to relieve yourself of the financial burdens you've taken on can help you be a better caregiver, by relieving you of some of the stresses related to caregiving. Ultimately, this may help you avoid burnout. It's all part of taking care of yourself, as you care for your loved one.
There are several common scenarios in which you may be eligible for tax credits or other benefits. Some common things you may be doing that are covered in the guide below include the following examples:
- Traveling some distance to their home to help them out
- Paying part of their medical expenses
- Taking time off work or away from your business in order to help your aging parent
- Availing yourself of a respite care stay in order to take a vacation or a break from caregiving
- Making small renovations or updates to their home
Caregiving of a relative: Canada Caregiver Credit
You can claim this tax credit if you provide care for anyone with a physical or mental impairment. This can be a spouse (or common-law partner) or any individual with an impairment, for whom you provide some or all of the basic necessities of life, such as food, shelter and clothing. This credit applies in the case of many family members, including your or your spouse's or common-law partner's parent, grandparent, brother, sister, uncle or aunt (if resident in Canada at any time in the year).
You can claim up to $2,273 as a basic amount and an additional maximum of $7,276 for infirm or low-income dependents.
Consult definitions of impairment and get all the details about this credit in the CRA's complete overview of the Canada Caregiver Credit.
Medical expenses: the Medical Expense Tax Credit
If you are paying medical expenses for yourself, your spouse, or for an elderly loved one, you may be able to claim this as a tax credit. The refundable medical expense credit is 25% of medical expenses, and is based on income stipulations.
For example, if you paid for healthcare expenses, you may be able to claim them as eligible medical expenses on your return. These expenses include a wide range of products, procedures and services, including medical supplies, dental care, and travel expenses. Of course, you can only claim the part of an eligible expense for which you have not been or will not be reimbursed (from company health insurance, etc.)
The full list of claimable medical expenses contains more than a few surprises. Some things you can claim include the following products
- Air purifiers (with a prescription)
- Computer products that aid the vision impaired, as long as you have a prescription
- Cosmetic surgery for medical or reconstructive purposes
- Crutches can be claimed without a prescription
- Gluten-free products for those with celiac disease, based on incremental cost over non-gluten foods
- Service animals for those who are blind, deaf, or suffer from diabetes or other disorders
- Some vitamins (with a prescription)
- Whirlpool bath treatments: any amount paid to a medical practitioner is eligible for credit.
See many more examples at the CRA's full list.
The refundable medical expense credit is 25% of medical expenses, and is based on income stipulations.
Attendant care or care in a facility
You can also claim for attendant care or care in a facility. Generally, you can claim the entire amount you paid if your loved one was in full-time care (such as in a long-term care community), while you cannot claim amounts for independent living in a retirement home. If the care recipient qualifies for the disability tax credit, you may be able to claim salaries and wages for care like assisted living. To claim this, you will need to acquire a detailed breakdown from the community.
You can claim these for any of the following that apply:
- Yourself, your spouse or common-law partner on line 33099
- Your or your spouse’s or common-law partner’s parents, grandparents, brothers, sisters, uncles or aunts, who were residents of Canada at any time in the year (line 33199)
The CRA's full guide to the Medical Expenses Tax Credit should be consulted for details concerning all of the above. Some noteworthy subsections of this are:
To make sure you are claiming this properly, we urge you to consult with your tax advisor.
Home renovations: the Home Accessibility Tax Credit
If you renovate a home in order to accommodate the needs of someone who is disabled, you can claim a non-refundable tax credit for expenses incurred. This is eligible for those who also claim the disability tax credit (learn more below), or anyone over the age of 65.
You can also claim some accessibility renovation expenses as a medical expense, and for eligible expenses, you can claim both the METC and the HATC. Renovations must be solely for the purpose of increasing accessibility, for a person who has a prolonged physical impairment.
Some examples of types of renovations that qualify as medical expenses are as follows:
- buying and installing outdoor or indoor mobility ramps for any person who cannot use stairs
- widening doorways or hallways (for example, for a wheelchair or rollator), in order to give a disabled person access to any rooms or areas of his or her home
- renovations to kitchen or bathroom cabinetry in order to give a person access to them
Types of renovations that qualify for the HATC are any home alteration that is integral to the home or dwelling. In order to qualify, a renovation must grant access to or improve functional abilities within a dwelling; or it must reduce the risk of harm to the individual. For seniors, this opens up some options. It can include things like a walk-in tub, installing motion sensor lights, adding non-slip flooring and a variety of other accessibility and safety improvements that you might not realize are eligible.
You can claim up to $10,000 per year, so if you plan renovations properly you can optimise your tax credits. You might also choose to make accessibility renovations incrementally in order to optimise tax breaks you qualify for (if delays do not jeopardise your loved one's safety).
For full details on this credit, please see the CRA's complete guide to the Home Accessibility Tax Credit.
Taking time off work to care for a loved one who is very ill or nearing death
Compassionate care benefits are part of Canada's Employment Insurance benefits program. This government assistance is available to both self-employed and regularly employed Canadians. In any case where you need to be away from work on a temporary basis in order to provide care, you can receive these benefits, up to a maximum of 26 weeks. This can include care for grandparents, uncles, aunts and other qualified seniors. To be eligible, you have to be able to show that your earnings from work have decreased due to caregiving, and that you have accumulated at least 600 hours of EI insurable hours of work in the last 52 weeks. The max payment is $595 per week (as of 2021). Note that changes have been made tohelp you access benefits during the time of COVID-19; these are in efect until September 25, 2021.
If you think the above applies to you, go to the source to learn all about EI caregiving benefits.
The Disability Tax Credit (DTC)
While not directly applicable to caregivers, family members certainly ought to be aware of eligible disabilities applicable to the Disability Tax Credit (DTC). Included in the list of applicable impairments are several disabilities related to activities of daily living (ADLs), including feeding, dressing and incontinence. To view definitions of how the credit applies to these, and see examples from the CRA, see their look at basic activities of daily living.
That's part of the full overview of the disability tax credit, which includes much more about how to claim this credit.
* Disclaimer: the information above is intended only for broadly informational purposes. Nothing above constitutes professional financial advice. Please consult with the CRA and/or financial professionals for details. This page last updated March 9, 2021.
