One of the questions that is almost top-of-mind when choosing a quality senior assisted living community is: “How will I pay for it?” Cresthaven East is here to help you solve that puzzle. There are many financial options available to you and here are just a few:
There are traditional options offered by banks, insurance companies and the federal government, including:
- Real Estate: If your family members owns a home free and clear or possesses significant equity, you may wish to consider a home equity line of credit. You might also consider renting the house to generate cash flow rather than leaving it vacant.
- Long-Term Insurance: Long-term care insurance generally covers some or all of the costs associated with assisted living. Be sure to check your policy and speak with your agent to learn the extent and scope of your coverage.
- Government: Your loved one may be eligible for Medicaid or state-run programs for assisted living care if he or she meets eligibility requirements.
- Private Pay/Cash
- State Medicaid Managed Care (SMMC)
- Veterans Benefits
Not all options are available to all individuals.
You, or the person paying for your care, may be eligible for certain deductions on your federal tax return, depending on the type of services and the level of care you require.
The IRS may allow deductions for the cost of housing and meals if you are receiving long-term care in a home or community for the aged due to chronic illness or the inability to live alone. Assisted living residents receiving personal care services may qualify for the deduction. Please consult your accountant.
To qualify, you must require assistance with at least two activities of daily living (such as eating, toileting, transferring, bathing and dressing), and a physician must certify that you have been unable to perform these functions without assistance for at least 90 days.
The same deduction can be used for people who require substantial supervision to maintain their health and safety because of cognitive impairment such as Alzheimer’s disease.
An adult child paying for their parents’ care may also qualify for the tax deduction, if the parent is a dependent.
For a parent to qualify as a dependent, he or she must be related to the child or have lived with the child for the entire year as a member of the household; Must be a U.S. citizen or resident, or a resident of Canada or Mexico, for some part of the calendar year in which the tax year began; and the child must have provided over half of the total support for the parent for the calendar year.
Tax deductions can be a useful way to alleviate the cost of care. However, please note that Cresthaven East does not provide tax advice for its residents, potential residents, or families, and this information should not be considered as such. Please consult your accountant.
Veterans Aid & Attendance Program
Was your loved one a veteran? If so, the Department of Veteran’s affairs offers eligible veterans and their surviving spouses a monthly stipend to cover living and medical expenses associated with assisted living.