It can be a stressful time if you have elderly parents or other loved ones that need homecare services to help them take care of themselves. You are concerned with finding the best agency to provide the best quality of care, but then the question arises — how are you going to pay for homecare services?
Most people rely on savings or long-term care insurance, but there are many uniques ways to pay for these services other than directly out-of-pocket. Here we will highlight 4 of the common options that we have seen.
Reverse mortgages are a great alternative funding source for homecare services. Their main purpose is to help seniors stay in their homes until the end of their lives.
A reverse mortgage allows seniors to use their home’s equity as collateral to secure a loan. The amount of money received depends on the age of the borrower, interest rates and the lesser of the home’s appraised value, sale price and the maximum lending limit, according to reverse.org. The loan can be received in one lump sum or in monthly payments.
There are requirements for this option, however. The borrower must be 62 or older while owning their home outright or with minimal debt left on the original loan. Borrowers must also continue to pay insurance and property tax, along with maintaining the property according to FHA guidelines. Consumer counseling and education are required for the homeowner to receive the loan as well.
Another option for paying for homecare services is the Veterans Pension if your loved one served or is a spouse of a veteran. According to the U.S. Department of Veterans Affairs, the minimum service requirements to be eligible to receive this are “at least 90 days of active duty service, with at least one day during a wartime period.” Additional criteria for being eligible for the Veterans Pension include at least one of the following:
- Age 65 or older
- Totally and permanently disabled
- A patient in a nursing home receiving skilled nursing care
- Receiving Social Security Disability Insurance
- Receiving Supplemental Security Income
To get help for paying for homecare services, the VA offers “aid and attendance” benefits for veterans that require the aid of another person. This is a monthly payment in addition to the normal Veterans Pension. To be eligible for this, your loved one must meet one of the following conditions:
- Requires the aid of another person in order to perform personal functions required in everyday living
- Are bedridden, in that the disability or disabilities requires that they remain in bed apart from any prescribed course of convalescence or treatment
- Is a patient in a nursing home due to mental or physical incapacity
- Their eyesight is limited to a corrected 5/200 visual acuity or less in both eyes; or concentric contraction of the visual field to 5 degrees or less
While applying for these benefits may be daunting, once they are established they are substantial and available until your loved one passes away.
Annuities allow the elderly to receive either a steady stream of income or a lump sum payment at an agreed upon date in the future. Think of an annuity as a cross between an insurance policy and an investment fund — you make a payment to the insurance company and in return, you can start making withdrawals at a later point in time.
There are two types of annuities: an immediate or a deferred annuity. An immediate annuity allows you to receive payments immediately after making your first payment. Deferred annuities, which are best for helping with the payment of health care for the elderly, start making payments at a later date. The payment you make can either be a lump sum or fixed or variable periodic payments. The money then grows tax-deferred until you would like receiving the payments.
Collective Sibling Agreement
If you have siblings that cannot help take care of a loved one because they are too far away or don’t have the time, a collective sibling agreement can be reached to ensure that the resources needed are evenly distributed, or that the individual doing the majority of the work is fairly compensated.
If one sibling is taking care of the loved one, an agreement can be reached where the other siblings agree to pay an hourly wage to them for their time and services. Be sure to keep clear records of time spent and expenses incurred in order to ensure everything is accounted for.
If a sibling has the financial resources to pay for homecare services themselves, an agreement can be reached that they will be repaid from the inheritance after the loved one passes or the home is sold. Again, it is essential to keep records of all payments made.
For both options, it is a good idea to have the agreement in writing to ensure everyone involved gets what they deserve. This can be a tense conversation to have with siblings, but it is an important one.
Once you’ve nailed down how you’re going to pay for homecare services, it’s important to choose a quality provider. Bluebird Homecare is proud to be recognized by our employers and customers with Best in Home Care Awards, for both Provider of Choice and Employer of Choice. Contact us today to see how we can help.