Financial Implications
Is there enough money to pay for the care that is needed? Basic and essential medical expenses are covered by government plans but additional expenses such as Home Care can be substantial. Here are some considerations:
Savings
Hopefully, your parents have saved some money. They may have even prepared for this situation. If this is the case, then you need to help them estimate the expected costs and set up a “cash flow” program to help them meet the ongoing expenses. Your parent/parents may be able to make the investment decisions themselves. However, if they are incapable or uncomfortable with this, then you and/or other family members may be required to handle the financial decision making. You need a Power of Attorney.
Funding Assistance from the Family
If your parent/parents do not have the financial resources to cover their expenses then the family, probably the children, may need to help. This could place undue hardship on the children. In order to avoid family conflicts, it is very important that the family is in agreement on how to arrange the financial support. For example, there may be situations where some children are in a better financial position than others. However, the family may decide that those with less financial ability provide more direct non-financial support so each is contributing in their own way.
Government Pensions
If your parent has been a contributor to the CPP during their working lives and are less than age 65 they will probably be eligible for some CPP disability pension. To receive the pension they will need to meet the CPP definition of disability. The maximum current CPP disability pension is just over $1,100 per month and is considered taxable income. You may visit this website:
Government of Canada - Disability Benefits under the Canada Pension Plan (Click)
Private Pensions
If your parent was a member of a private pension plan and has not yet started receiving benefits, most pension plans will provide an early pension if they meet the plan definition of disability. The pension sponsor should be approached to determine the specific benefits provided.
Please contact us to find out more!
Barbara Reid's Wealth Management Team
Your personal Wealth Advisor in Hamilton, Ontario
