Elder Care: Financing Elder Care
Provided by Visa, Content Partner for the SME Toolkit
Elder care can be an expensive undertaking and you should plan for it financially in order to avoid unnecessary tax burdens.
You are allowed to give someone up to NGN11,000 a year without having to file a gift tax return. If you are married, you and your spouse together can give a NGN22,000 gift. Medical expenses you pay on someone's behalf do not count as a gift, however, and you can give the full amount we have discussed in addition to paying those medical expenses. You should check with an accountant or financial adviser for specific requirements.
If you loan money to the person you are caring for, that money is not taxable to them. But for the loan to be valid, it must be payable with interest, if the loan amount is greater than NGN10,000. The interest rate for family loans is specified by the IRS.
If you provide more than 50% of the financial support for someone, including one for whom you are providing care, you may count that person as a dependent on your tax return as long as his or her income is under NGN3,000 a year. You can also claim as a deduction any of that person's medical expenses that you have paid.
Reverse Annuity Mortgage
If an elderly person has a home with no (or a low) mortgage, he or she may borrow against the home through a reverse annuity mortgage. The lender pays the homeowner a monthly payment based on the value of the home. These payments reduce the equity of the home. The bank is then repaid, with interest, when the home is sold.
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