The Imminent Caregivers Shortage – Impact and Options

According to Wikipedia, the term caregiver is normally used to refer to unpaid relatives or friends of a disabled individual who help that individual with his or her activities of daily living (homecare).

A recent study shows that today, as much as 80% of the homecare services provided to older adults come from such individuals.  However, as the baby boomers generation age, and the fact that they didn’t have as many children as their parents – the same in-family resources will simply not be available to take care of them. According to the same study, by 2031, roughly 25% of women aged 65 and older will have no surviving children (up from 16% in 2001). By 2051 that number will reach 30%. In addition, recent reports show a growing shortage in facilities to provide proper care such as hospital beds (In July 2011, Ontario’s hospital bed occupancy rate was 97.8%) and long-term care facilities. These (and other) reasons are some of the drivers for people to adopt the “age at home” approach. All which will result in an increased demand for government and private homecare services and, ultimately, caregivers.

We suspect that this will have a “chain reaction” impact:

A shortage in caregivers to provide the needed care will lead to an increase in the overall cost of homecare service (e.g. higher salaries, work overload, increased demand for subsidised care to people without family members) – regardless if it will be provided by the government or private companies. As a result, governments will have to either limit its care services or allocate additional funds to maintain the same level of services (most likely by raising the taxes on an already smaller workforce). This will affect the family members that will not be able to afford such care or will have to commit a substantial portion of their monthly income to homecare services. These family members may opt to stay at home as caregivers, which will in turn, translate to an additional reduction in the workforce (The retiring baby boomers, their children who opt to stay at home and unemployed trained personal support workers).

Although there is no one solution to address these issues, there are few steps that can be taken in order to address both the increased demand for caregivers and reduce the financial impact:

Tax Credit – Provide tax credit for expenses associated with homecare costs (employing caregivers, consuming services, performing house renovations and more). This will provide more work for service providers (a sales tax source) and caregivers (an income tax source) while allowing the family members to remain in the workforce.

Live-in caregiver program – Increase the quota in the live-in caregiver program to allow for additional caregivers. These caregiver will be joining the general workforce and stop the family members from leaving it (both are an income tax sources).

Care Facilities – Invest in additional care facilities (e.g. adult day care) that will allow providing homecare by trained caregivers while the family caregivers can go to work.
Thanks to the growing number of studies and reports on this subject, more and more countries recognize this as a critical issue and have started working on different action plans. Some of these countries (such as Canada) plan on offering a Caregiver Tax Credit and allow for more applications under the live-in caregiver program. However, these are still just plans, and with the demographic shift that started with the first wave of retiring baby boomers this year, these plans needs to be put into action very soon.

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