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Legislators Propose Tax Credits Up to $675 for At-Home Caregivers

Andrew Kitchenman | January 18, 2013

But GOP questions how to pay for program to help families with cost of aiding elderly.

Marilyn Askin (left) and Ev Liebman of AARP-New Jersey
Marilyn Askin (left) and Ev Liebman of AARP-New Jersey.

Caregivers struggling with the cost of aiding older relatives would receive tax relief under a bill that is advancing in the Legislature.

The bill, AA-3404, would provide up to $675 in tax credits for individuals and couples who provide care for a family member who is at least 60 years old and lives in the home of the caregiver.

A Medicaid waiver the state received last year aims to encourage more seniors to live at home longer and stay out of nursing homes.

But there is concern that there will be fewer at-home caregivers available, since insurance companies are reducing reimbursement rates for them. As a result, more families are expected to have to provide care themselves for their elderly relatives.

The tax credit would help ease some of the financial burden for those families.

The bill was released in a 4-0 vote by the Assembly’s Women and Children Committee, with all of the votes in favor coming from Democrats. Two Republicans abstained, saying they questioned how the state would pay for the credits.

The credits would be limited to individual caregivers with up to $50,000 in annual income and couples with up to $100,000 in income who are caring for a family member with no more than $20,000 in income.

The measure is drawing support from a range of advocacy groups for the elderly and others who require care at home.

Bill sponsor Pamela R. Lampitt (D-Burlington and Camden) said she had personal experience in caring for her 89-year-old father-in-law for a five-week period while her mother-in-law was in a rehabilitation facility.

“I myself felt compelled to be at the house, to be there for my father-in-law,” Lampitt said, adding that even such a short period of time made her realize the magnitude of the expense of providing care. Many people have similar stories, she said.

AARP-New Jersey estimates that 1.75 million of the state’s 8.9 million residents provide care for family members. The organization estimates this care costs $13 billion and saves state government about $1 billion.

The $675 could be used to offset expenses for products not covered by Medicare, such as incontinence products like adult diapers.

The $675 is “nominal in comparison to what the costs really are, but it’s a place to start,” Lampitt said.

She added that the money would be recycled into services and products inside the state, allowing the economic gain to offset the expense.

The estimated cost of the tax credits would be $60 million, according to legislators.

Marilyn Askin, AARP-New Jersey chief legislative advocate, expressed hope that the bill can garner bipartisan support as it advances in the Legislature. She noted that 65 percent of caregivers are women.

“They’re the daughters or the forgotten daughters-in-law who take care of an aging parent,” Askin said. “They’re unpaid, not because what they do is worthless, but because what they do is priceless.”

Askin noted that caregivers help with such basic daily activities as dressing, eating, using the toilet and being transferred from a bed to a wheelchair, as well as medical care including injections, cleaning wounds and changing tubes.

“Taking care of an older person not only, in this economic downturn, has put a dent in their personal budgets but also has created so much stress. This is such a modest bill to recognize the value and the valuable services rendered by these caretakers, to bolster their spirits, to provide them with an opportunity for less stress.”

Askin said the tax credits could be used to pay for a brief period of care so that the caregiver has rest, or to make a home modification such as adding a ramp.

“It applies to people who really need it, who really need the very modest tax credit,” she said.

AARP-New Jersey Associate State Director for Advocacy Evelyn Liebman said caregivers often have no alternative to providing care themselves.

She defended the use of tax credits, saying the state addresses legislative goals like business growth and lower electric bills through similar means.

She added that the state is projected to have more than 240,000 residents older than 85 by 2020.

“The sooner we can provide support to this group, the better,” she said.

A National Multiple Sclerosis Society representative asked for the bill to be amended to benefit caregivers for people younger than 60.

Assemblyman Gary S. Schaer (D-Bergen and Passaic), also a sponsor, said the bill’s goal matches the goal of Gov. Chris Christie’s administration to increase at-home care. He said his mother, who has dementia, receives care costing more than $11,500 per month at a nursing home. However, the cost was 30 percent of that when she was able to receive care at home.

“It seems to me that the promotion of healthcare at home, where possible, is that much more significant,” Schaer said.

Assemblywoman BettyLou DeCroce (R-Essex, Morris and Passaic) said she recognizes the need for the bill, but said she wants more information about how it would be funded. She said she would support a more extensive program if the funding were available, noting that her mother-in-law is 99 years old and receives care from her sister-in-law.

“I do understand and it’s an issue that needs to be looked at and addressed, but I think we need to do it in a smart way,” DeCroce said.

Assemblywoman Caroline Casagrande (R-Monmouth) was critical of passing a tax credit outside of the state’s annual budget process. She said Hurricane Sandy had a major impact on the state’s fiscal situation.

“We cannot continue to budget this way,” she said.

Schaer expressed frustration that the state has passed other bills without locating funding, citing last year’s the higher education reorganization bill as an example.

“We had no source of funding, but for that bill, it was OK to pass,” Schaer said. “It’s been OK bill after bill after bill to benefit businesses, and I have not only supported but authored so many of those bills. There have been no funding sources for that.”

The bill has been referred to the Assembly Budget Committee.

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