When a client’s cash flow collides with caregiving

By Staff | August 22, 2018 | Last updated on August 22, 2018
3 min read

As Canadians live longer and as a greater proportion of the population reaches the milestone age of 65, more clients may find themselves looking after aging parents—and that potentially means increased expenses.

A CIBC poll finds that one-third (33%) of Canadians either provide or expect to provide caregiving in the next five years. That figure jumps to 40% among those aged 45 to 55.

Read: When retirees are overextended by extended family

Canadians who financially contribute to a loved one’s care due to advanced age or illness are out of pocket $430 per month on average, finds the poll—and many haven’t planned for the expense.

In fact, 76% of caregivers who provide financial support say they make financial sacrifices to do so, such as cutting back on expenses (59%), dipping into personal savings (41%) and saving less (41%).

Further, siblings might not share the financial load, which often leads to family fights over sharing costs and caregiving. (The poll finds that 59% of siblings share the load.)

And, while tax credits are available to help ease the financial burden for caregivers, two in five (43%) don’t know about them, and only 12% use them.

Tax credits are available even when sharing costs. For example, if a client’s parent requires full-time care from a personal support worker, and the client splits the bill with the parent or with siblings, they may each be able to claim the medical expense tax credit (METC) for the costs, says a CIBC release, which refers to a report on tax relief and planning associated with caregiving by Jamie Golombek and Debbie Pearl-Weinberg. Golombek and Pearl-Weinberg are managing director and executive director, respectively, of tax and estate planning at CIBC Financial Planning and Advice.

Also, the various family members may each be eligible for a 15% non-refundable Canada caregiver credit up to a shared maximum of $6,986, says Golombek in a release.

In addition, the home accessibility tax credit may provide up to a $1,500 credit for renovations and other one-time expenses, and the disability tax credit (DTC) may provide tax savings of $1,235 federally, plus provincial or territorial tax savings, for those with a disability or those who care for them.


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Despite caregiving costs, most caregivers (74%) feel grateful for the opportunity to help, and more than half (53%) would do so even if it puts their own financial future at risk.

The poll also finds that, when one sibling bears the lion’s share of hands-on care for an aging parent, two-thirds of respondents (65%) agree that that sibling should be financially compensated—either through financial contributions during care or when the estate is distributed.

Read the full report from Golombek and Pearl-Weinberg on easing caregivers’ financial burden.

Back-to-school spending on the rise

Increased costs could also be looming for clients with children. As a long-running retail advertisement says, “It’s the most wonderful time of the year”—the time when kids head back to the classroom.

Back-to-school spending in Canada this year is set to increase by about 4% over last year, says EY in a release.

“A confident consumer, strong employment, population growth and a low but stable Canadian dollar are all expected to drive spending across the country, with few exceptions,” says Ted Salter, leader of consumer products and retail at EY Canada, in the release.

Sales forecasts vary by region, with B.C. expected to lead, and Ontario and Quebec expected to have above-average sales.

Read: Is your client saving enough for education?

Perhaps not surprisingly, clients’ spending on kids trumps any economic concerns they might have, so clients could be challenged to curb such spending.

In the release, Daniel Baer, leader of consumer products and retail assurance at EY Canada, says: “As parents focus on their children’s education, concerns over NAFTA, tariff and geopolitical uncertainty are not expected to influence consumer spending in the short term.”

About the CIBC caregiver poll: From July 18 to July 20, 2018, an online survey was conducted of 3,025 randomly selected Canadian adults who are members of Maru/Blue’s online panel, Maru Voice Canada. Results are weighted by education, age, gender and region (and in Quebec, language) to match the population, according to Census data.

Also read:

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Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.