Funding or funding assistance from the family

If your parent does not have the financial resources to support themselves when experiencing an illness, it may be necessary to rely upon family. Children want the best for their parents, however financial sacrifices can place hardship on these children. In order to avoid family conflicts, it is very important that the family is in agreement on how to arrange the financial support. For example, there may be situations where some children are in a better financial position than others. However, the family may decide that those with less financial ability provide more direct non-financial support so each is contributing in their own way. We can help you set up a plan that works for everyone.

Government Pensions

If your parent has been a contributor to the CPP during their working lives and are less than age 65 they will probably be eligible for some CPP disability pension. To receive the pension they will need to meet the CPP definition of disability. This CPP disability pension is considered taxable income. We can assist you in describing the specifics of the program and how an application can be made.

Private Pensions

If your parent was a member of a private pension plan and has not yet started receiving benefits, most pension plans will provide an early pension if they meet the plan definition of disability. The pension sponsor should be approached to determine the specific benefits provided.

Private and Group Insurance Benefits

Insurance can be a very important and welcome source of financial support when a person becomes disabled due to illness. There are various types of coverage that may be available.

Types of Coverage:

Your parent may be eligible for the following types of insurance benefits due to their illness:

• Critical Illness Insurance
• Disability Insurance
• Long Term Care Insurance

Critical Illness Insurance

This insurance is designed to pay a lump sum to the beneficiary if the insured incurs one of a specific list of afflictions. Although some policies are more comprehensive, most policies will pay benefits for the following afflictions/conditions:

• Cancer
• Coronary bypass surgery
• Heart attack
• Stroke

Generally, benefits will be paid if the patient survives for 30 days after diagnosis. The insurance company will require qualified medical evidence of the condition to ensure it meets their requirements.

The benefits received can be used for any purpose and do not necessarily have to be used for medical costs. The benefits are received tax free.

If your parent has a Critical Illness policy in place, the insurance company’s claims department should be contacted.

Disability Insurance

Disability policies are designed to replace income lost due to accident or sickness. Consequently, if your parent is retired they will probably not have disability insurance. However, if they are still employed, they may be able to receive disability benefits. There are many different disability policies and the definition of what constitutes disability will vary as will the amount and duration of the benefits.

Long-Term Care Insurance

Long-Term Care policies are ideal for situations where a person cannot take care of themselves and require either in-home or institutional care. Although policy terms vary widely, a common feature is that benefits will be paid when the insured is unable to perform two of the Activities of Daily Living (ADLs) which are:

• eating
• bathing
• dressing
• using the toilet
• transferring position

The benefit will typically be paid monthly and the amount received can vary from about $500 to as much as $10,000.

Some policies are ‘indemnity’ policies where the amount received will be directly related to the costs incurred. Others will pay a set amount and the money can be used as the beneficiary sees fit.

Speak to us to determine the exact nature of your parent’s coverage and how to proceed in making a claim.

Private and Group Insurance

Although individual insurance tends to provide more comprehensive benefits than group plans, group coverage can be very helpful. If your parent has individual insurance, we can give you direct assistance in determining what the coverage is and how to go about making a claim on your parent’s behalf. If your parent has group coverage then his or her employer should be approached to determine what benefits may be available. The types of insurance discussed above are often provided to some extent by group plans.

If you are covered by a group plan through your employer you should also approach the appropriate people to determine if your plan has provisions that can help you in assisting your parent with their illness. Depending on the plan they may offer financial support or the option of more flexible work hours.

Health Care Costs

Elderly people typically have far more medical issues and expenses than younger people and depending on the nature of those expenses the individual or their families may have to pay for them personally.

Although there are provincial/territorial variations, all Canadians can assume that their basic, essential health care needs will be met under the government programs. While we are quite fortunate as Canadians in regards to our health care, there are some expenses that are not covered by the government. Now that your parent has an illness, you may be concerned about what those expenses may be and how you will be able to pay for them.

For example, the cost of prescription drugs are the second largest health expense in Canada after hospital care. However, out-of-hospital drug costs are not covered under the Canada Health Act so any reimbursements for prescription drugs are a provincial and territorial concern. The amount of provincial/territorial coverage varies fairly dramatically across the country but as a general rule, seniors will receive assistance in covering drug costs. Those who receive social assistance will pay only as much of 35% of the costs. Consequently, it should be assumed that there will most likely be drug expenses incurred that will not be reimbursed by the government.

Fortunately, many retirees/seniors will have some degree of private or company insurance that will cover at least some of their drug costs. You should contact your provincial/territorial authorities to determine if your parent is eligible for government drug expense assistance. You should also determine whether they are covered under any company or private insurance.

Examples of some of the other health related expenses that will not be covered by provincial plans are:

• wheelchairs or other transportation devices
• hearing aids
• alterations to a home to make it usable by a disabled person
• in-home care
• special vehicles

The following number is the contact for government programs that can help your parents pay for these costs.

Ontario: 1-866-797-0000