Archive for August, 2011

HOW TO FUND HOME MODIFICATIONS FOR SENIORS AND PEOPLE WITH DISABILITIES IN NEW YORK? PART III

Monday, August 29th, 2011 by admin

Hello, I hope that everyone is doing well after such stormy weekend here in NYC. As promised, today, we will be talking about tax benefits, reverse mortgages, and other sources of financing for home modifications.

Personal Income Tax

Home modifications can be claimed as a medical expense by anyone if the criteria put forth by the IRS are fulfilled. Under IRS publication 502 (2010), “Medical and Dental Expenses” an individual can claim any expenses incurred in the acquisition of special equipment of home improvements made to a residence; as long as, these have been deemed medically necessary by a physician. A medical expense claim can be filed if the special equipment is for yourself, your spouse, or a qualifying dependent. The IRS has a broad definition of what is considered a dependent. In order to deduct 100% of the expenses as a medical expense, the IRS requires that the property value not be increased by the installation of special equipment or improvements.  If the property value is found to have been increased due to the improvements, you will only be able to claim some of the expenses.

This is a list of some home improvements that may qualify as a medical expense:

  • Constructing entrance or exit ramps for your home
  • Widening doorways at entrances or exits to your home
  • Widening or otherwise modifying hallways and interior doorways
  • Installing railings, support bars, or other modifications to bathrooms
  • Lowering or modifying kitchen cabinets and equipment
  • Moving or modifying electrical outlets and fixtures
  • Installing porch lifts and other forms of lifts (but elevators generally add value to the house)
  • Modifying fire alarms, smoke detectors, and other warning systems
  • Modifying stairways
  • Adding handrails or grab bars anywhere (whether or not in bathrooms)
  • Modifying hardware on doors
  • Modifying areas in front of entrance and exit doorways
  • Leveling the ground to provide access to the residence

If you would like to obtain more detailed information, please click on the link below:

http://www.irs.gov/publications/p502/ar02.html#en_US_publink1000178943

Tax credit for the elderly or the disabled

Individuals aged 65 or older and retired with a permanent total or partial disability can claim this tax credit; as long as, they fulfill all other requirements put forth by the IRS on publication 524 (2010). Although, the tax credit is only $1,125.00, I think that every little bit counts. For more information about this tax credit, click on the link below

www.irs.gov/pub/irs-pdf/p524.pdf

New York State Property Taxes

The New York State School Tax Relief Program (STAR) Enhanced is a tax credit that benefits seniors 65 years or older who own and live in their primary residence. To qualify, the household income cannot exceed $79,050. The maximum tax benefit varies depending upon location, time, and the level of assessment performed by municipality.  It is also based upon the annual adjustment rate based upon inflation. Generally speaking, senior home owners can save hundreds of dollars in taxes. For more information, click on the link below:

http://www.orps.state.ny.us/star/star_savings.cfm

 

Reverse Equity Mortgage

Reverse mortgage is a financial vehicle that allows seniors to use home equity; in order to, cover living expenses or necessary projects such as home modifications. In order for a senior to be eligible for a reverse mortgage, he or she must have enough equity built into the house value.  They must also never have defaulted on a federal debt.  Reverse mortgages as opposed to regular mortgages, do not require a credit history check since the equity on the house is used as collateral.  Another important aspect of reverse mortgages is that they do not need to be repaid right away.  The amount of equity taken out on the house depends upon the client’s age, current interest rates, and the equity built on the house.  Last but not least, the only thing asked of the borrower is that they pay their taxes, insurance, and maintain their homes.  For more information, please click on link http://www.reversemortgage.org/

By

Miller Calberto, MS, OTR/L, CAPS
Senior partner
Adapting Spaces, LLC
mcalbertotr@adaptingspaces.com
1888-956-0077

How to fund home modifications for seniors and people with disabilities in New York? Part II

Monday, August 8th, 2011 by admin

Hello, everyone! As I continue to explore social services and public funding to pay for home modifications, I become more aware of the complexity to get access to this funding. It is this complexity that makes it even more gratifying for me to bring this information to you. Today, I will be talking about Workers’ Compensation, different types of insurance coverage as well as programs available through the Social Security Administration.

Worker’s Compensation
This is usually managed by the State in order to provide financial assistance for individuals injured in the workplace. Funds are provided in order to cover expenses such as: medical needs; vocational rehabilitation; and compensation for loss of function or death benefits to surviving dependents. Furthermore, worker’s compensation programs usually cover expenses related to modifications done to an existing home or a newly purchased accessible home. For more information, click on the links below:
New York Workers’ Compensation Alliance http://www.nyworkerscompensationalliance.org/
New York State Workers’ Compensation Board http://www.wcb.state.ny.us/

Insurance Coverage
There are three major types of insurance that may cover home modifications: Health, Life, and Long- Term Insurance. As more and more insurance companies are seeking ways to decrease health care cost and become more competitive, they are turning to options such as home modifications for answers. Many life and long-term insurance companies are including home modifications in their packages. For instance, “whole” life insurance policies build up cash value over time. These funds can be used at anytime for any purpose and are re-paid at very low rates. However, making an early use of these funds decreases the payout when the policyholder dies. Since not all long-term insurance companies have home modifications and provision of durable medical equipment as part of their policies, it is recommended that you ask your insurer beforehand. Below is a list of long- term insurance companies we have identified as offering home modifications within their insurance policies. For more information, click on the links below:
Genworth Life Insurance Company www.genworth.com
John Hancock Life Insurance Company www.johnhancocklongtermcare.com
State Farm Mutual Insurance Company www.statefarm.com
The Prudential Insurance Company of America www.prudential.com

Impairment Related Work Expenses (IRWE)
The Social Security Administration offers this program to individuals who receive Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). As the name implies, it is used by individuals with disabilities to cover the cost of home modifications needed in order for them to be able to work. If the person works outside their home, IRWE will cover the cost of modifications done to the outside of the house. If the person works from their home, IRWE will cover the cost of modifications done to the inside of the house. In most cases, the out of pocket cost of these services can be deducted from the amount of earnings used to determine SSI benefits. For more information, click on the link below:
http://www.socialsecurity.gov/redbook/eng/ssdi-and-ssi-employments-supports.htm#3

Plan for Achieving Self Support (PASS)
PASS is a Supplemental Security Income (SSI) work incentive program that allows individuals with disabilities to work. It is a written plan of action in order to obtain a particular type of employment or open up a business. The money obtained will not affect your SSI eligibility and if you are already eligible to obtain SSI, your benefits will be increased to reimburse you for the money that you spent on your PASS. For more information about eligibility and/or requirements, click on the link below:
http://www.ssa.gov/ssi/spotlights/spot-plans-self-support.htm

Overall, I think that it is important to understand that obtaining access to some of these programs and services is not clear cut; therefore, it is important to seek the advice of legal and social services professionals who can guide you in the process. Also, it is important that you talk to your doctor about your need for home modifications since many of them are not aware of this option. It is imperative that your doctor collaborates with this process since he/she will ultimately be providing the justification letter for you to get approved for home modifications. On the other hand, some Workers’ compensation administrators may not be too eager to pay for home modifications; however, if you are rightfully entitled to these benefits, home modifications and anything that you need to make you more comfortable and independent should be covered. Next week, we will be talking about tax benefits, reverse mortgages and other sources of funding for home modifications, so stay connected.

By

Miller Calberto, MS, OTR/L, CAPS
Senior partner
Adapting Spaces, LLC
mcalbertotr@adaptingspaces.com
1888-956-0077