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Caregiver expenses
Published By Beth Lueders on January 17, 2017

Caring for a loved one is truly a labor of love for millions of American family caregivers, but for many, the devotion of time and tenderness comes with personal financial sacrifice. The AARP “Family Caregiving and Out-of-Pocket Costs: 2016 Report” estimates that U.S. family caregivers spend a yearly average of $6,954 for out-of-pocket costs related to caregiving. Hispanic/Latino caregivers spend $9,022 annually, which adds up to 44 percent of their income. According to the report, African-Americans spend an average of 34 percent of their annual income on family caregiving and whites 14 percent.

To cover the added costs for caring for a loved one, many family caregivers must forfeit some of their own financial freedoms and goals such as taking a vacation or saving for retirement. Many individuals who care for an adult relative must take from their own retirement or personal savings to meet caregiving expenses.

If you are a family caregiver, there are cost-saving benefits you will want to know about. Depending on the state in which you live, these benefits may include direct cash payments or breaks to your federal income tax. Here are a few ways to save on caregiving expenses:

Medicaid Cash and Counseling Program

Some states offer direct payments to compensate family caregivers for time invested in caring for a family member. The wages are low and strict income eligibility requirements apply, but the programs may be worth exploring. Contact your local social services, human services or Medicaid office for further specifics.

State Health Insurance Assistance Programs (SHIPs)

These community services offer free health insurance counseling, which can reduce financial pressure on care recipients and caregivers. Visit to find a SHIP office near you. is a free service sponsored by the National Council on Aging to help seniors find financial assistance to pay for food, healthcare, prescription drugs, utilities and more.

Long-Term Care Insurance

Some long-term care policies pay family caregivers. Check with your insurance agent on policy details.

Injured Veteran Benefits

A law passed in 2010 provides a monthly stipend to primary caregivers of veterans injured in military combat after 9/11. The U.S. Department of Veterans Affairs (VA) can determine if a loved one is eligible. The VA continues to provide a number of support services for all veteran caregivers.

Dependent Tax Exemptions

Certain tax exemptions and deductions may available if you provide care and financial support for an older adult. You may even qualify for a financial break if you jointly support a loved one with other family members and friends (i.e., Multiple Support Agreement). Check with your accountant about reimbursable expenses and tax allowances as a family caregiver and to see if you can claim your parent as a dependent on your taxes. For more about the Dependent Care Credit, contact the Internal Revenue Service at 1-800-829-1040 or

Some employers offer elder care assistance as part of employee benefit packages. Local chapters of disease groups such as the American Heart Association may be a source for additional local referrals on how to cover caregiving expenses.

What caregiver financial benefits can you pass along?

An award-winning journalist who has documented stories in nearly 20 countries, Beth Lueders is an author, writer and speaker who frequently reports on diverse topics, including aging and health issues for both U.S. and international corporations.

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