As mounting caregiving costs raise questions around employer support, experts weigh in on whether spending accounts in benefits can help
Recent findings have found caregivers in Canada are shouldering steep personal costs that extend well beyond emotional means.
According to a recent report by Simplii Financial, caregivers are spending an average of $5,800 out of pocket each year, with some costs climbing past $25,000. These expenses, ranging from healthcare and in-home care to home upkeep, are affecting not just wallets, but also careers as 24 per cent of caregivers report sacrificing income, and roughly a third expect the financial burden to impact their children’s future.
For Charlie Herrera Vacaflor, these findings echo what he's seeing in the workplace.
“We definitely see the hidden side of these costs,” said Herrera Vacaflor, senior consultant at Peninsula Canada. “We see how many of our clients struggle with the unfortunate situation of many of their employees that are going through these life-changing situations.”
Herrera Vacaflor explained that this financial strain often translates into workplace challenges like absenteeism, productivity drops, and complications around promotions.
“The main issue here is how to walk the fine line between companies ensuring that there is a balance between life and work,” he said.
Yvonne Elsdon, a benefits consultant at Baynes & White, emphasized that while employer-provided benefits can’t fully cover caregiving costs, they can help. But despite wellness and health spending accounts already in place for some employers, should they be a necessity for caregivers?
Elsdon pushed back on the idea of caregiver-specific accounts.
“It really can’t be because you can’t really discriminate against employees who are caregivers and who aren’t,” she said, adding that the complexity lies in defining a caregiver.
“Is that going to see your mother three times a week? Or is that living in the same house and helping attend to activities of daily need? A wellness account would be around $500 to 750 which really only covers a fraction of the caregiving costs. Unless you're a senior executive getting executive perks, the odds of you getting a wellness account of $5,000 are pretty low,” said Elsdon.
Instead, Elsdon supports a more flexible approach. For example, taking a health spending account and allowing that to be used for wellness. This gives employees a single bucket of funds they can allocate based on their circumstances, with tax implications depending on usage.
“You can use it either for health spending account, which is non taxable, but you can also use it for taxable things through the wellness account. You could probably increase it a little bit from the $500 because you're giving person a bucket of money and letting them allocate, which really, I think speaks to a lot of people who aren't caregivers as well,” she said.
Elsdon also noted that most traditional benefit plans can’t be extended to aging parents or other non-dependent relatives.
“Unfortunately, parents or elderly relatives or friends don’t qualify as dependents,” she said, noting this makes structural changes, like redefining dependents or offering caregiver-specific coverage, challenging and potentially costly.
She believes the future of caregiver relief could come from outside the workplace, like through social or government initiatives.
“I think it’s tax breaks that are going to be the thing that’s more doable,” she said. “There also could be some mechanism through the government where if somebody needs a caregiver, that they get a tax break so their estate or their funds can pay for more of it and not be put onto the child or relative.”
Meanwhile, Herrera Vacaflor sees potential in formalizing support structures. He acknowledged the cost-benefit trade-off for employers but emphasized that even flexible work arrangements can be seen as a “hidden benefit” with real financial value to employees.
“Eventually, when we're talking about time, we're talking about certain levels of productivity and monetization around it so by offering a flexible work arrangement or an accommodation period that involves working from home or being remote for a period, that also involves reduced costs, regarding commute expenses and whatnot,” said Herrera Vacaflor.
When asked whether employers are managing the balance between life and work for caregivers effectively, Herrera believes there's progress but room for growth.
Elsdon also shared that view.
“Employers can support through leave policies and flexibility,” she said, noting that not every employee can stick to a 9-to-5 schedule.
Still, employers have tools they can use already in their means. Herrera Vacaflor underscored the value of ongoing one-on-one meetings between managers and staff.
“It’s key for employers to conduct skill assessments and remuneration assessments time, from time to time, to understand who the key players are within a workforce,” he said.
“These are not only to assess productivity but to understand how the employee and the person are doing,” he added. “If the employee comes forward and says, ‘I am going through this family situation,’ employers can explore whether a benefit package would kick in or whether a more formalized accommodation process should begin.”
As for the benefits already being deployed, Herrera Vacaflor pointed to stipends for unpaid caregiving leave and paid transportation for international caregiving obligations as examples some large firms have adopted.
“These kinds of benefits really show the value for talent and understanding of the situations an employee can go through,” he said.
Ultimately, he believes the best support often starts with simply awareness and empathy.
“It is possible that all of us will have to go through this situation from time to time,” he said. “It just goes a long way to recognize it as a good deed where necessary but always ensuring that there is balance and communication with employees so we don’t see situations of abuse.”
