Tax credits for caregivers

Himani Ediriweera

Senior woman in a wheelchair

With long wait lists for care facilities, assisted living centres aren’t able to accommodate the increasing population of seniors. According to Statistics Canada, more than 5 million seniors live in Canada, a number that is expected to more than double by 2031.

Despite the physical and financial demands of home caregiving, more people are choosing this route.

So what’s available to support these generous people? To ease some of the financial burden, the Government of Canada allows eligible caregivers to claim the Caregiver Amount. It’s a non-refundable tax credit that will help reduce taxable income.

The caregiver amount

If you are living with a dependant who is 18 years or older and relies on your care due to a mental or physical impairment, you might be able to claim up to $4,530 under the federal Caregiver Amount.

The credit also applies if you are caring for a dependent parent or grandparent born in 1949 or earlier. If more than one individual cares for the same dependant, you can split the amount. However, the claim cannot exceed the maximum allowance.

You might be eligible for the Caregiver Amount if the person you are caring for:

  • is living with you
  • is 18 years or older
  • had a net income of less than $20,002 (2014)
  • has a physical or mental impairment
  • is the parent or grandparent, born in 1949 or earlier, of you or your spouse or common-in-law partner

The family caregiver amount

If you are caring for a dependant with a physical or mental impairment, you might be able to claim an additional $2,058 (a total of $6,588 with the Caregiver Amount) under the Family Caregiver Amount (FCA).

You might qualify for the FCA if the person you are caring for is:

  • a spouse or common-in-law partner
  • an eligible dependant
  • a child born in 1997 or later

Compassionate care under employment insurance (EI)

An individual who is taking time away from work to care for a gravely ill family member can apply for the Compassionate Care benefit through the EI system.

In its 2015 budget, the federal government announced Compassionate Care EI leave will increase, starting January 1, 2016, from six weeks to six months. To qualify for this benefit, caregivers must have worked at least 600 hours over the last year and lost up to 40% of their weekly earnings. This benefit counts as taxable income.

Why is caregiver support so important?

Caregivers face many challenges, ranging from lost work and income to mental and emotional burdens.

2013 Statistics Canada study shows 60% of caregivers were trying to balance working and supporting a loved one. And, 54% of Canadians who cared for a family member at least 20 hours per week said their work was suffering. An estimated 15% of employed caregivers said they had to scale back their weekly work hours to provide for the needs of family and friends. Forty per cent looked for an easier job that allowed them to focus on caregiving responsibilities.

If you are a caregiver, remember to claim the Caregiver Amount on your provincial or territorial worksheet. Rules for claiming non-refundable tax credits are the same as the corresponding federal ones but the income limit and calculation vary across Canada.