If you are an adult living in Canada, it could be that you know someone who has taken on the role of caregiver – or that you have even done so yourself. According to the latest data, there are about eight million people aged 15 and over in Canada providing care and support to a loved one who is incapacitated. And, as shown in the following graph, it is mainly women who find themselves taking on this sensitive role.  

Moreover, among people aged 65 and older, one in four is a family caregiver.  

The other side of the coin 

The increase in life expectancy may be partly responsible for this phenomenon: people are living longer, but many of the extra years we are given end up being a time when, for various health reasons, we increasingly have to rely on outside help for daily tasks. The list of needs is long: shopping and meal preparation, home maintenance and household chores, doctor’s visits and medications, personal hygiene and body care… And it’s natural for a family member to want to lend a hand. 

This is a serious responsibility, though, and can be especially challenging for people in the early stages of retirement:  it’s not uncommon for them to be caring for an ailing parent or spouse… and for their children, who may not yet be financially independent or who may themselves have special needs. Based on a recent U.S. survey, people in this “sandwich generation” devote tens of hours a week to helping the older generation – and the younger one.

The personal cost 

Being a caregiver can be extremely demanding. On average, it is estimated that family caregivers in Canada devote more than 19 hours a week to this emotionally taxing work. It’s not surprising that many of them report feeling a level of stress that threatens their emotional stability and leads to difficulty concentrating, disturbed sleep, exhaustion, anxiety, and even depression. In fact, close to one in four caregivers notice a deterioration in their overall health due to their caregiving. 

And that’s to say nothing of the financial impact. 

The financial cost 

As this graph shows, when family caregivers are asked to specify what type of support they need, it’s financial support that comes first. 

A family caregiver would spend about $7,600 per year on care for care recipient. These expenses would include the purchase of medical and adaptive equipment, home care, home modifications, household help, transportation, prescriptions not covered by insurance and, in some cases, placement in a specialized care facility. 

But there is also an invisible financial cost. As many as 6.1 million family caregivers in Canada must, for better or worse, combine this role with their paid work. Many report having to take numerous days off without pay, or even put their careers on hold or pass up professional opportunities.  

Lastly, for all of these reasons, it is not uncommon for family caregivers to have a reduced ability to save and be forced to alter their plans for retirement. 

Government assistance 

Can this burden be lightened? 

Various government programs exist for family caregivers. At the federal level, the primary one is the Employment Insurance family caregiving benefit, which could pay a family caregiver 55% of their earnings (to a maximum of $668 a week) for a specified number of weeks. The program also includes compassionate care benefits for people providing end-of-life care to a loved one.  

Other programs and tax credits are available from both levels of government, notably for the parents of children with disabilities.  

Prevention is better than cure 

In addition, there are three main tools that, if you, yourself, were to become incapacitated by a condition at some point in the future, would prevent this from resulting in a heavy financial cost for the people providing your care. 

The first is your personal savings. By building up a significant amount over the years, that could be used for your care, you could prevent your loved ones from having to put their own finances at risk to help you. 

The second, if you are active professionally, is disability insurance. Also known as wage-loss insurance, this type of policy provides you with replacement income should you become unable to do your work. 

Finally, you could look into critical illness insurance, which is designed to pay out a lump sum following the diagnosis of a critical illness listed in the policy. This insurance may also include support services, especially psychological support. 

Lastly, it would also be important to specify your wishes about the handling of your personal care and the management of your affairs should you become incapacitated. This can be done with a power of attorney or a protection mandate, depending on the province. 

Your advisor can help you to get a clear idea of this issue and prevent future health problems from turning into financial problems as well.