Plan Special Needs

While giving importance for special needs child care, one role which is often left unplanned is the role of a  Caregiver. This one important person is taking 24/7 care of the child whether paid or unpaid. Financial services industry worldwide have not been too focused on this role. There are not enough innovations on the product side which can provide financial care to the caregivers.  But for special needs children families absence of the family caregiver can put a huge financial  burden on the family.

The Caregiver Role

A Caregiver can be anyone from the family. Mother, Father, Brother  or Sister who plans to take responsibility for the special needs dependent.  When it’s within the family then the role is generally unpaid.

A caregiver is a sacrificing opportunity. Once an individual becomes a caregiver he/she loses benefit to earn an income since they are the one who is taking care of the special needs child 24/7.

Caregiver Special Child

And it’s not only income. Even the benefits of employment like health insurance EPF, Retirement Savings Plans, and many others are lost. Imagine a situation when family caregiver is not around. The financial implication demands much more attention to them.

Why Plan Caregivers Financial Care?

It’s no doubt that the family caregiver is probably the most important role to play. In most families’ caregivers voluntarily is the mother who sacrifices all income-earning opportunities. But it also has a domino effect on the families. Most of the families’ lot of dependence is on the caregivers for the sustenance of the situation. Since the caregiver takes care of the child the other parent can seek higher income opportunities to balance the shortfall they face. But less thought is given to a situation if the caregiver is not there. The situation can increase issues manifold.

The first issue to be addressed in caregiver absence is the personal affairs where the child may demand more time from the other family members. How easy or difficult it will be depends on many aspects such as nature of job, profile, location, etc. One may have to even switch jobs to bring adjustment in their changing family dynamics.

The second impact would be financials. Now family will have to hire professionals to fulfill the obligations the caregiver was undergoing. This leads to a sudden jump in the expenses for the special needs child care.  When there is a single earning member then the going may be tough.

Case Study

Let’s understand the situation with a case study-

Vijay is the father of a 5 years old special needs child. Vijay has a stable job with an income of Rs 70000 per month. His wife Lakshmi is a housewife and a caregiver of their special needs child. Due to her role of a caregiver  Vijay can focus completely on his job today. The current monthly expenses for the child care is approximately Rs. 30000 considering Lakshmi is managing most of the child affairs. If Lakshmi is not around tomorrow then problems of Vijay will increase manifold.

Firstly he will be the only one who will have to manage the emotional aspects with his child. This will demand adjustment in his working lifestyle with a good amount to be spent with the child now. Vijay’s current job profile involves a lot of traveling which he will find it difficult to continue now. Any switching of the job due to this situation may lead him to accept new job with a decrease in income.

The other aspect which Vijay has to deal with is now a sudden jump in expenses. He may have to hire professionals for the work which Lakshmi was taking care. This will include household work, support staff for the support which Lakshmi was providing to the child, transport, travelling, etc. These will not come cheap to Vijay. Some of these may not be available to his satisfaction when we consider the lack of trained staff in different cities.  Then security of the child while going outside becomes a lot bigger concern when the caregiver is not around.

Work out the expenses for hiring professionals the expenses for child care may just shoot up by 30-40% or may be more in some cases. If the expenses for the child care increases to even Rs. 50000 Vijay won’t be ready to bear this and will find it difficult to sustain even in the short term if there is any hit on the income. Had there been any financial support for some time he would have planned for the child care more efficiently.

Life Insurance

What situation Vijay had fallen in can come across to any family with a special needs child to care for. In most families the dependency on caregivers is huge but they are not being included in the planning aspects. The financial burden needs to be resolved to ensure the standard of living of the child does not take a hit. Life insurance is an important tool for this situation. But when you look within the families then even families who can afford to pay are missing this important aspect of their life. Add to it the negligence of insurance companies to address such situations the caregivers are not even thinking of this.

Life insurance provides financial support in case the family caregiver is not around tomorrow. This can allow the family to adjust the finances of child care in the course of time. How much life insurance is enough depends on the actual financial burden which will come to the family. Though many thumb rules are available but its always good to work the actual requirement. Also, these thumb rules apply mainly to income earners and not on housewives.

One hurdle that families will face is that the life insurance companies do not have a definition of caregivers. The criteria are working or non-working. For non-working say housewives the life insurance available is limited. Still good to avail of what is available and work on some asset building for the future.   If the caregiver is working then availing adequate life insurance is much easier.

The caregiver role is the biggest asset to the family of a special needs child. Any caregiver should also think in these lines when the family is more dependent on him/her for managing child affairs.  Financial service providers also have to understand these roles and bring tailor made products to address families unique situation. Till then a holistic financial planning approach by the family can help in address situations like Vijay’s.

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