“The concept of eldercare or long term care planning is fairly new. A fast-growing generation of elderly people needing care is starting to put a great deal of pressure on caregiving family members and government programs for long term care. More and more we are seeing articles and books about the burden of long term care on families. And a huge group of 77 million baby boomers, poised for retirement, is causing alarm in the eldercare provider community.

Over the years, we have met with many families in a crisis mode, struggling to find services and preserve assets for loved ones needing long term care. When statistics tell us about one out of two people will need long term care, it’s appalling that most of the current generation of elderly have not planned for this crisis in their lives.

And the current pre-retirement generation is doing no better. Sometimes I think Americans are about as unprepared as the ancient tribes of Israel wandering in the desert. When the time comes for long term care, most people believe help will come to them like manna from heaven. In most cases this won’t happen.

I’ve encountered it so many times, I am no longer surprised when people ask me if there’s not some kind of government program that will pay them to quit their jobs and to stay at home and provide long term care for their loved ones.

According to research By the National Care Planning Council only about 16% of long-term care services are covered by the government. The other 84% are provided free of charge by family caregivers or provided by services paid out-of-pocket by families or from those receiving care. And the bulk of government care services are provided only after a care recipient has depleted all of his or her savings. The Council also estimates that at any given time approximately 22% of the population over age 65 is receiving some form of long term care support.

According to an April 2005 congressional hearing press release from Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on Health of the Committee on Ways and Means,

“…In 2004, according to CBO, approximately $135 billion was spent on long term care for the elderly. Sixty percent of this amount was financed through Medicaid and Medicare, one third through out-of-pocket payments, and the remainder by other programs and private insurance. This funding excludes the significant resources devoted to long term care by informal caregivers (primarily spouses and children). The CBO estimates that informal care is the largest single component of long term care….”

As you can see, there is some funding for long term care.  By trying to find a financial advisor, this funding can be found much quicker and more efficiently.

“What if 33% of all seniors in this country could receive up to $1,800 a month in additional income from the government to cover their long term care costs? They can! Under the right circumstances, a little-known federal program will pay additional income to cover long term care costs for at least 1/3 of all US senior households. But the provisions of this program are such a well-kept secret that only 4.6% of eligible seniors are actually receiving the benefit. The great news about this program is the government will pay you to hire your family, friends or just about anyone to take care of you. The program is called “VA Pension.”Only about 520,000 people are currently receiving Pension from the Veterans Benefits Administration and these are not all elderly. At the most, this number represents only about 4.6% of the eligible 11,400,000 senior households — 33% of the US senior population. Based on the incidence of long term care in the elderly, about 22% of eligibles or about 2,500,000 people should be receiving pension. That’s roughly five times more persons than are receiving it now.

Most people who have heard about Pension know that it will cover the costs of assisted living and, in some cases, cover nursing home costs as well. But the majority of those receiving long term care in this country are in their homes. Estimates are that approximately 70% to 80% of all long term care is being provided in the home. All of the information available about Pension overlooks the fact that this benefit could be used to pay for home care.

It also comes as a surprise to most people that VA will allow veterans’ households to include the annual cost of paying any person such as family members, friends or hired help for care when calculating the Pension benefit. This annual cost is deducted from household income and used to calculate a lower “countable income” which in turn enables families to receive this disability income from VA. Even though VA claims the benefit is for low income families, because of the deduction for care costs, households earning between $3,000 and $6,000 a month can still qualify for Pension.

This extra income can be a welcome benefit for families struggling to provide eldercare for loved ones at home. Under the right circumstances, this annualized medical expense for the cost of family members, friends or any other person providing care, could create an additional household income of up to $976 a month for a single surviving spouse of a veteran, up to $1,520 a month for a single veteran or up to $1,800 a month for a couple.

If the disabled care recipient has been rated “housebound” or in need of “aid and attendance” by VA, all fees paid to an in-home attendant will be allowed as long as the attendant provides some medical or nursing services for the disabled person. The attendant does not have to be a licensed health professional. There is also no need to distinguish between medical and nonmedical services — all are deductible.

It is our understanding that a nonlicensed in-home attendant could be just about anyone receiving pay for providing services. This might be members of the family, friends, or someone hired to live in the home. Examples of medical or nursing services would be help with activities of daily living such as dressing, bathing, toileting, ambulating, feeding, diapering and so on. Other services might include medication reminders or supervision necessary to provide a protective environment for the care recipient — in the case of dementia or Alzheimer’s.”

By utilizing the financial planning help that can be offered, this kind of “free money” can sometimes be found.  It is a great way to afford long term care if financial planning for retirement did not save someone enough money.