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

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.

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