Veterans Pension Helps Millennial Caregivers

More than 40 million people in the United States serve as unpaid caregivers, usually for an aging parent or a grandparent.

Not only do they lack compensation, but they spend on average one-fifth of their income on caregiving expenses, according to a recent report by AARP. These out-of-pocket expenses keep them from saving for their own retirement.

Surprisingly, one-fourth of those unpaid caregivers are Millennials, trying to balance their work and family obligations and handle the financial stress of paying out of pocket to support a parent or grandparent while still paying off student loans.

In all likelihood, the number of unpaid caregivers will continue to grow as the elderly population doubles over the next generation. But for veterans or their surviving spouses, there may be some relief. VA Pension benefits -- commonly called Aid and Attendance (A&A) benefits -- help veterans and their surviving spouses pay for in-home care, assisted living-, memory- or nursing care as well as medical supplies and medicines.

These pension benefits are available to former service members (who are older than 65 or completely disabled) or their surviving spouses. Additionally, the service member must have been discharged (not dishonorably) after at least 90 days of consecutive, active-duty service with at least one of those days during a wartime period.

A&A applicants must meet limited asset requirements. The net worth limit is $123,600 for 2018 and is indexed for inflation. Net worth does not generally include the veteran’s primary residence or vehicle. It does include assets in bank accounts, stocks, bonds and commercial or secondary property holdings as well as one year’s Income for VA Purposes (IVAP).

When calculating IVAP, veterans and surviving spouses can deduct certain unreimbursed monthly care expenses. These include skilled nursing, assisted living costs, and long-term care and health insurance premiums. They also include in-home care provided by a non-spouse relative.

By applying for A&A, you could help defray the costs of your own care and compensate your relatives so they do not have to defer their own retirement planning or deepen their debt.

The AARP study, Millennials: The Emerging Generation of Family Caregivers, found that millennials spend 21 hours per week on caregiving duties. Nearly three quarters of them, 73 percent, work also. More than half, 54 percent, say their work or career prospects have been negatively affected by their caregiving commitments. The average respondent reported spending $6,800 per year of their own income on caregiving expenses.

Figures were similar for older caregivers in a 2016 AARP study. That study found that more than three quarters, 78 percent paid out-of-pocket for caregiving expenses. On average family caregivers spent $6,954 per year. This amounted to nearly 20 percent of their annual income on average.

More than half of employed caregivers, 56 percent, said caregiving affected their work. Due to their caregiving responsibilities, respondents said they worked different hours, fewer/more hours, or took time off (whether paid or unpaid).

Many family caregivers also cut back on other spending because of caregiving obligations. One in six reduced contributions to their retirement savings and almost half cut back on leisure spending such as eating out or vacations.

If you are concerned about costly long-term care and the effect it could have on your family’s future financial prospects, consult with a trusted, VA-approved elder law attorney. An attorney can help you determine your options to not only pay for your care but help your family stay out of debt.