There is a relatively unknown or at least underutilized program in the law that can provide some important tax benefits for those who care for their elderly or special needs relatives.  The Dependent Care Assistance Program (DCAP) is a tax benefit that is often offered by employers for expenses that a person incurs for any number of things for the care of others.  It is a tax credit that can be claimed by the taxpayer for expenses related to the care for qualifying individuals so that the caretaker may work.  The program is similar to a Health savings account insofar as a person can sock away a certain amount of money that can be used on certain delineated services or costs.  

The good thing for New Yorkers is that this tax credit is for both federal government income taxes as well as state taxes.  Not all states have such a tax credit; residents of these states can only utilize the federal credit and still have to pay state taxes on the money earned and diverted into the DCAP account.  Under federal tax law, the tax credit is limited by to the amount that the worker earns.  New York’s tax credit calculated as a percentage of the Federal tax credit.  In addition, there is a $5,250 ceiling per year on the amount that a person can put into the account.  The benefit is allowed for families earning up to $120,000.  If the employee utilizes a DCAP program through their work, the tax credit is reduced by the amount that use through their employer’s program.

The money can be used for practically anything for the elderly or special needs relative, including adult day care, transportation, (reasonable) entertainment costs, as long as they costs are related to your employment.  In other words, if you do not need to incur the costs to be employed, you cannot claim these costs.  Overnight camp or educational costs cannot be incurred, since they are not related to or required to your employment.  Fellow relatives cannot be the service provider.  While an employee can take advantage of an employer based program, most employers do not offer it as an additional benefit; rather most employers who have such a program allow the employee to earn their income tax free.  

FEDERAL DEFINITION OF ELDER ABUSE AND FEDERAL RESPONSE

In these United States it is often that many things are left up to the states for criminal and civil enforcement. While the federal government does have a statute for murder, it is generally only applied to events that occur on federal lands or of federal agents or employees or when the murderer is allegedly motivated by racial animus or something similar. As such, it is not surprising that there is no general federal legal definition of certain acts that are criminal in nature, such as robbery or extortion. On certain matters, which Congress declared of critical importance, the federal government created defitions that it expects states to follow in substantial regards. For example, foster care placement and adoption, is of such critical importance that Congress created a series of laws that defines a host of things, such as abuse and neglect, when foster care is needed, when the state is to move towards adoption and away from working with the parents.

It creates strong incentives for states to adopt these statutes by offering financial backing. In other words, it underwrites a certain program if the state adopts the law that is substantially in line with the federal government model. The same tactic is employed in the fight against elder abuse. Recently three Senators introduced the Elder Protection and Abuse Prevention Act (the Act), which, seeks, in part, to amend the definition of elder abuse found in the Older American’s Act. But this definition was not tied to block grants to states. The first time Congress authorized a block grant to the state for purposes of elder abuse was in 2010 with the Elder Justice Act. More importantly, Congress never appropriated money for the programs that it statutorily authorized and mandated with the Elder Justice Act.

INCREASING IN FREQUENCY

Guardians across the country are beginning to grapple with a larger phenomena of life in these United States: that we are a mobile society. Many times these decisions are made by legally competent adults who have the right to decide where they want to live. When it comes to the decisions of an older population, those decisions are animated by such things as access to good health care, location of relatives and loved ones as well as climate and quality of life. Many of those same elderly citizens who move are only in their current location because they may have recently retired and that is where they worked for several decades. Family and home may be elsewhere. It is very common for people to have family that they are close to strewn out across the country, allowing such people a number of locations and climates to chose from. These same facts and drives also apply to people who are involved in adult guardianships. It is not uncommon for these individuals to move from one jurisdiction to another to obtain specialized treatment. With an aging population, these issues are only increasing in frequency.

One would assume that a Court in one state would honor a judgment of guardianship from another. After all the federal Constitution requires states to grant full faith and credit to the judgments of sister states. Often this is the case, but not always. Different standards apply in different states and questions and concerns may arise when one state’s laws require a guardianship to be vacated when the original state contemplated that it would last for life due to the first state’s different laws and the guardian made plans accordingly. How does that influence the issue of continued care? How does the lack of capacity of the protected party affect the decision of the Court? Moreover, when does one state assert jurisdiction and the other relinquish? Courts cannot enter an Order without jurisdiction. Some nightmare scenarios could play out, as they did in the Alabama case of Sears v. Hampton in 2013, without some basic standards to tell Courts how to measure its decisions.

NEED FOR UPDATED ESTATE PLANNING WHEN ONE SPOUSE GOES INTO NURSING HOME

When one spouse goes into a nursing home, there is a good chance that he/she is using to pay for their care. That means that the community spouse will have to live survive on certain income thresholds determined by Medicaid. There are also asset limits that are allowed under Medicaid. Estate planning can allow for a middle class family to have one spouse qualify for Medicaid through such legal mechanisms as spousal refusal, which is only allowed in a few states, New York being one of them. These asset and income thresholds presuppose that there is one spouse in a nursing home and the other in the community.

If the spouse in the nursing home passes away, there may be some legal effect on the community spouse, depending on what means based programs he/she qualifies for. They may also receive Medicaid but only receive community based care or any number of other programs, such as the veterans aid and attendance program. On the other hand, if the community spouse passes away first, there will be a much greater chance that the spouse in the nursing home will risk losing their Medicaid benefits or have that additional income provide for the medical care of the spouse in the nursing home and the assets liquidated. The retirement account, the family home any life insurance proceeds from the community spouse’s passing as well as any investments or valuable personal property owned by the community spouse. All of this may be quite contrary to the estate plans that both spouses had. They would have rather left their nest egg to their children and grandchildren rather than have it pay for a Medicaid lien.

TWO SCHOOLS OF THOUGHT

It is never an easy decision to make decisions for another person when it is the other person who has to live with the consequences of those decisions. That is doubly true when there is not any family relation or close ties that bind you. When you are deciding for a family member, say for example an aged parent or grandparent, at least you have the benefit of years worth of conversations and their larger thoughts on certain key matters of health and health decisions. You can look back and remember what they did or said in certain similar scenarios. What about those who do not have any such close relatives who decide for them? There is a class of professional guardians across the state and country who are professional in every sense of the term. They examine an issue and consider the best way to get the answer by asking further questions of the experts, such as doctors, therapists, social workers and so on. The hardest decision that any guardian has to make, regardless of whether or not they had the benefit of ties of affinity, is whether or not to terminate treatment for an incompetent patient. By what yardstick do they measure their decisions?

If a patient already expressed their clear desire in the past as to what they want to do, the decision that the guardian must make will be much easier. The 1972 New Jersey case of In Re Quinlan sums up the decision making in this case best. In Quinlan, a young woman was in a vegetative state from which she was not likely going to recover. Her father applied to the Court to be her guardian so he could have the life supporting medical apparatus removed. The trial Court denied this application, although the state Supreme Court found a Constitutional right to privacy in such decisions to remove oneself from life support that the state cannot intervene in. Since she could do it personally, her guardian could do the same in her absence. The legal protections that control a guardian’s decisions ensure that guardians do not make their decisions with improper motive.

SOME LIMITED RELIEF

Patients who rely on Medicare sometimes experience sticker shock after being released from the hospital only to find out that because some hospital administrator classified their stay as “observational” that they must pay a large portion of the final bill. Many times a doctor will seek to have a patient admitted for any number of reasons, only to have a bureaucrat reclassify the patient’s time at the hospital as observational. Such a designation will mean that Medicare will not pay for this time in the hospital. For Medicare to pay for a hospital stay, the patient has to be an admitted patient for at least three days (three midnights in the hospital).

Observational status does not equate to an admitted patient in Medicare’s own set of self defined definitions. That may be quite different to the patient who went to the hospital and received a number of drugs and tests during their time their and was consistent with the majority of their non-surgical stays in a hospital in life. In an effort to address these obvious problems that will only grow with time, President Obama signed a bill that required hospitals to warn patients that their stay will be considered observational in nature and that they are not being admitted under Medicare’s rules, which may result in a bill from the hospital that they will have to pay. The Notice of Observation Treatment and Implications for Care Eligibility Act would have to inform the patient that they are going to receive outpatient services under Medicare’s rules which requires cost sharing from the patient and that the observational status does not count towards the necessary three day inpatient in order to transition to a skilled nursing care facility.

NEW RULES FOR SAME SEX COUPLES

Social security survivor benefits may seem like a relatively straightforward issues to understand. Indeed, it can be for the majority of people, but with the Supreme Court ruling in Obergefell v. Hodges that states must recognize the right of all couples, including same sex couples, to marry, the issue of social security survivor benefits for spouses and even for children should at least be touched upon. The opinion in Obergefell may be as monumental of an opinion as the Court ever penned. While only history will tell, the social consequences may be of the same magnitude as the Supreme Court’s opinion in Brown v. Little Rock Board of Education, requiring racial integration of schools across the country.

The implications ripple throughout the law, from tax law to social security benefits to family law, estate planning, bankruptcy and even elder law. Less than a year prior to the writing of this blog there was a patchwork of treatment for same sex couples, which was anything but similar in its treatment of two similarly situated couples, with the only difference being what jurisdiction the couple lived in. Social Security indeed denied some same sex life partners survivor benefits when a couple resided with each other as spouses for decades. Even before the Supreme Court heard oral arguments in Obergefell some who be widows/widowers (but for the state law denial of this right) sued the Social Security for this disparate treatment.

HOST OF BENEFITS OFFERED

There are a number of benefits that the Federal Veterans Administration offers to eligible veterans and their families. While the vast majority of benefits require an eligible veteran or his/her spouse to obtain benefits, there are some limited circumstances when the children, including adult children, may be eligible. Children born with a number of ailments, although mainly spina bifida and conditions secondary to spina bifida, that are direct biological issue of a veteran of the Vietnam war era and who served in country may be eligible for a disability pension. Children of medal of honor winners receive a host of benefits throughout their lifetime, although not all of them are administered by the Veterans Administration. For veterans or their spouses, while not exhaustive, the main benefits that most veterans apply for and receive are:

  1. a military retirement; or

IN HOME PERSONAL ASSISTANTS

If you already have New York Medicaid you may be eligible for managed long term care or in home care by a licensed Managed Long Term Care Agency (often simply referred to as MLTC). The animating thought is to ensure that older adults can remain in their home and community rather than in a nursing home. The menu of options available to eligible New York state residents is actually quite extensive. In fact, there is even the option of hiring and training your own personal assistant, know as Consumer Directed Personal Assistance Program.

Traditionally, they could not live with you and you cannot hire your own spouse, parent, son-in-law, son, daughter-in-law or daughter, although they can be grandchildren, neices or nephews or any other relative for that matter. That requirement is changing in April, 2016. There is an exception that allows your personal assistant to live in your home if the amount of care required by the patient makes it necessary. That means that parents (usually of a disabled child), children, grandchildren or sons and daughters in law may reside in the home and care for the patient and get paid for it. You are also required to hire and train an alternate for when the primary care assistant is unable to come to your home because of vacation or need for sick time.

FOCUS ON COMFORT

Hospice care is intended to ensure that those who are in the final stages of a terminal illness are cared for and comfortable. It is not to cure a current disease process. Instead it is to help provide a more holistic or all encompassing level of care. The patient’s medical, emotional, mental, social and religious needs are addressed. Prior to entry into a Medicare hospice program you and your family will meet with your hospice team to address the families needs, obviously with primary focus on the patient. Included within that plan, there could be social workers, dietary consultants, nurses, physicians, speech pathologists or any other medical professional that is Medicare eligible.

There are times when a hospice care plan will include bereavement counselors and priests or chaplains. Care can even be provided in home, unless your hospice team determines that the level of needed care can only be provided in an inpatient facility. If the care is in home and one of the primary caretakers needs a break, Medicare authorizes respite care for up to five days each time respite care is authorized. Respite care may be available more than once it is not authorized more than once very often.

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