Written By: Jessica Allen, AFC®
Sitting in my husband’s hospital room in Walter Reed, an Army official referred to me as my husband’s “caregiver.” Before this point, I had only thought of myself as an Army wife, mom, tax preparer, and the other things I was currently doing. Being a caregiver was a term I had never considered adding to my lexicon.
My caregiving journey started in 2011. Like numerous other caregivers, over the years, I have been knocked down and felt like I was drowning more times than I could count. When you add the red tape of the VA to the exhausting pace of caring for a wounded veteran, you frequently find yourself searching for something you can control. For me, that was our money.
I was awarded my FINRA Military Spouse Fellowship ninety days before my husband stepping on a forty-pound bomb in Afghanistan. Of course, I considered resigning from my fellowship, but as my caregiving journey continued forward, I realized that our financial situation was extremely complex. Military and veteran caregivers need specialists to help our families navigate our complicated financial world. I made it my mission to finish the fellowship and to help as many families like mine as I possibly could.
Here are the tips I routinely share with military and veteran caregivers.
Make sure your end of life plans are in place. As practitioners, we think everyone should know this and yes they should. However, with caregivers, it is vitally essential all end of life plans are in place. If the caregiver precedes the veteran in death, the veteran will still need people to provide care for them. What if the veteran requires twenty-four-hour nursing care? What if the caregiver is also the veteran’s fiduciary? These are just two of the questions that need to be asked when assisting with end of life plans for the veteran caregiver.
Obtain every possible benefit. Did you know that some military caregivers could qualify for a stipend? Active Duty military might be eligible for SCAADL-Special Compensation for Assistance with Activities of Daily Living. While the stipend is given to the active duty service member, the intent is to help offset the financial burden a caregiver might have.
Veteran caregivers will want to check out the VA Caregiver Program. This program not only provides a stipend for the caregiver, but it also includes support for the caregiver. A home health nurse will visit the home to check on the veteran and their caregiver. Also, if the caregiver has no other avenue for health insurance, they might qualify for Champ VA.
The veteran should also check into their Social Security benefits for both themselves and their dependents. Some might be able to collect Social Security disability. There is also exclusive compensation from the Department of Defense. Some veterans might be eligible for CRSC (Combat Related Special Compensation) or CRDP (Concurrent Retirement Disability Pay).
Realize the veterans and caregivers are on fixed incomes. In most situations, the stipends issued by the VA, Department of Defense, and Social Security Administration are the only sources of income the veteran and caregiver have. There are some situations where the veteran and possibly also the caregiver can and do work.
Assist with college planning. Non-taxable income will be reported on the FAFSA. This could impact the dependent’s financial aid. Make sure and help them research the various non-profits that provide scholarships. Also, check to see if the dependent is eligible for Chapter 35 benefits or the GI Bill.
Make future plans that both include and exclude the veteran who is receiving the care. More than likely, the caregiver will outlive the veteran. Perhaps caregiver and the veteran divorce. Sometimes the veteran is the child, and that child gets married. While some might see it as morbid to plan both ways, I see it as realistic for caregivers to make future plans that both include and exclude the veteran.
Acknowledge the tax consequences of being a caregiver. Most veteran caregivers are not filing tax returns. The VA stipend for both the veteran and the caregiver are non-taxable. Since the source of their income is non-taxable, any social security disability they draw is also non-taxable.
While it might sound pleasant to be collecting non-taxable income, that creates a list of problems, for example, where can the families invest the funds for retirement? You need taxable income for IRAs, and you need to be working for an employer with a 401k or 403b to contribute to those accounts. Also remember since the stipends are non-taxable the veteran and the caregiver are no longer contributing to social security; therefore, that benefit is even less than what we would see with a typical client.
Also, when the veteran and possibly their caregiver go to get a mortgage, some companies will not offer them financing simply because they do not have to file taxes. When we went to obtain our construction loan for our adaptive house, the first bank would not lend to us because the bulk of our income at the time was my husband’s VA stipend. I was informed that his salary was “contingent on him being alive.” Since every person’s income is contingent on the same factor, I sought a different lender. That lender required a few more pieces of documentation, but we quickly obtained our loan.
Stay positive. Caregivers are on an incredible roller coaster of repeated medical crisis, red tape, and family drama. Some will fall off the financial wagon again and again. We have to remind them that it is ok to have hiccups. However, what’s not ok is to continue enabling the bad behaviors the cause the hiccups to re-occur.
The families of the wounded, injured, and ill need our specialized support and advice. Their situations are so vastly different from the average civilian and military households. Hopefully sharing these few tips with you will help you assist their families.