Taking care of a parent, spouse, child or other loved one who can’t care for themselves is a rewarding, albeit sometimes stressful job. It’s wonderful know he/she is receiving safe, loving care. However, due to the demands of the role, many family caregivers reduce their work hours or stop working altogether. And many spend their own money for care-related expenses. The financial stress comes on top of the day-to-day stressors and concerns relating to the health of your loved one. Fortunately, there are several ways to be paid as a family caregiver. How? Read on…
Many family caregivers suffer financially.
If caregiving is taking a financial toll on you, you are not alone. A 2018 Genworth Beyond Dollars Study shows widespread concern among family caregivers regarding money. Respondents report:
- 63% paid for care out of their own savings/retirement funds.
- 48% reduced their quality of living.
- 42% reduced contributions to their own savings.
- 46% worked fewer hours.
- 30% missed career opportunities.
- 20% missed 10 or more hours of work per week.
Additionally, results from the Caregiving in the US 2020 report by AARP and the National Alliance for Caregiving show similar financial strains:
- 28% report they have stopped saving money.
- 23% have taken on more debt.
- 18% report high financial strain.
- 11% have been unable to afford basic expenses like food.
Options to get paid as a family caregiver.
- Medicaid’s Self-Directed Services.
- Veterans Aid programs.
- Family payments.
- Long-term care insurance policy.
- Employer-sponsored paid leave for caregivers.
- Home and community-based services programs.
See below for information on each of these options which can help you get paid as a family caregiver.
Self-directed care for Medicaid recipients.
If your loved one is eligible for Medicaid, you may be able to receive financial help through the Self-Directed Medicaid Services programs.
These self-directed services programs provide people with disabilities, including older adults, the ability to manage their own long-term home-care services, instead of relying on an agency to manage their care.
If accepted into a program, participants can use their allotted budget to hire and pay for caregivers.
Although all 50 states and the District of Columbia have a program, each state sets their own rules, benefits, coverage, and eligibility. Some states allow individuals to hire a family member to provide care, although some states exclude spouses and legal guardians. And some states only pay for providers who do not live in the same home as the care recipient.
To learn about the guidelines for your state, and/or to start the process, contact your state Medicaid program. Importantly, realize the names of self-directed services programs vary from state to state.
How to enroll in Medicaid self-directed care programs.
There are several steps involved in the approval process for self-directed programs. Firstly, the care recipient must receive an assessment to determine needs and risks.
Next, your loved one (with assistance if needed) must create a written plan detailing the types of assistance required with daily living tasks, such as bathing, feeding, dressing, medication management, rides to doctor appointments, etc.
The plan should include a contingency plan for coverage if the designated family caregiver is unavailable. If approved, Medicaid will provide a budget for goods and services. Finally, with the care plan and budget set, the care recipient can choose a caregiver.
Veterans aid programs.
There are four plans veterans can apply to for the payment of family caregivers.
Veteran Directed Care
The Veteran Directed Care program allows qualified veterans to manage their own long-term care services. The program is for veterans who need the level of care provided at a nursing facility but want to live at home.
Veterans enrolled in the VA health services can apply for the program, currently available in 37 states, the District of Columbia, and Puerto Rico.
If accepted, veterans receive a budget to spend on the goods and service they find most useful, including a caregiver to assist with activities of daily living. Veterans can choose any physically and mentally capable family member as their caregiver.
Contact your nearest VA medical center for learn more and/or to start the process.
Aid and Attendance benefits
The Aid and Attendance (A&A) benefits program supplements a military pension to help cover the cost of hiring a caregiver, including family members.
To be considered for benefits, veterans must qualify for VA pensions and meet at least one of the criteria below:
- Needs help from another person to perform daily activities, like bathing, feeding, and dressing.
- Bedridden, for all or most of the day, due to illness.
- Living in a nursing home due to a disability.
- Limited eyesight (find specific vision criteria here).
Surviving spouses of qualifying veterans may qualify for this benefit as well.
To apply, complete the A&A application form. Provide specific details regarding the disease or injury that caused the impairment, the impact on daily life, why a caregiver is needed, etc. If possible, include a doctor’s report. Mail the form to the your state’s pension management center or bring it to your regional VA benefits office.
The housebound benefits program provides a monthly pension supplement to veterans who receive a military pension and are substantially confined to their homes because of permanent disability. Importantly, note that the application process is the same as for A&A benefits, but you cannot get both benefits at the same time.
Program of Comprehensive Assistance for Family Caregivers
The Comprehensive Assistance for Family Caregivers program provides monthly stipends to family caregivers of veterans who need help with daily living activities due to a traumatic injuries sustained in the line of duty on or after Sept. 11, 2001. To qualify, the veteran must be enrolled in VA health services. Importantly, family caregivers must be 18+ years old.
Need more information on these VA programs? Get more information on the VA Caregiver Support page or call its hotline at 855-260-3274.
It’s possible for a care recipient to pay a family member to perform the tasks that a professional home health aide would normally provide.
However, if your loved one does not have enough money to pay you, you might be able to take advantage of a state program that compensates family caregivers. Although many states have programs, the guidelines and offerings can vary by county and state. Importantly, not all states have this type of program, and others limit who can receive payment as family caregivers. Read this SeniorLink article to see what programs your state offers (scroll down to Step 6 to find a link for your state).
Additionally, you could ask other family members to help pay for you to be your loved one’s family caregiver. Although this may seem like an impossible ask, realize your loved one would likely pay for a professional caregiver if a family member could not provide the help and support needed. Therefore, your family might decide it’s better to spend the money on a trusted family member instead of on an unknown professional health aide.
Certainly, this type of arrangement can foster plenty of resentment and stress among family members. In order to reduce the risk of family tension, AARP suggests you consider taking the following steps:
Put aside any awkward feelings.
The care recipient and the family caregiver should talk openly about caregiving needs, wages, hours, etc. Also, don’t forget to discuss how to handle periods when the caregiver is on vacation or sick.
Draw up a personal care agreement.
Most importantly, you and your loved one should create a contract that details wages, hours, services to be provided, and any other relevant details.
To minimize family tension around this arrangement, involve other members of the immediate family in this discussion. Moreover, all interested parties, such as siblings, should approve the arrangement. Visit Family Caregiver Alliance for instructions on creating this agreement.
Consult a lawyer.
An experienced lawyer should review your contract to make sure it meets tax requirements. Additionally, if the care recipient has a will to distribute his/her assets, a lawyer can help you consider the impact on inheritances.
Beware of emotional pitfalls.
If family members disagree with the plan, consider a session with a family therapist or family mediator. If the care recipient is elderly, try to find a professional who specializes in elder care.
Keep professional records.
Importantly, keep detailed records noting the services performed, dates and hours of work, and the amount of paid. Furthermore, this paperwork is critical if the care recipient later applies for Medicaid — the qualification process includes an evaluation of financial records for the past 5 years.
Similarly, evaluators may use this information if the care recipient needs to move to an assisted living facility or nursing home.
According to the IRS, if you get paid as a family caregiver, you must report the wages as taxable income. No exceptions. Additionally, if/when the care recipient is eligible for Medicaid, any money paid to family caregivers that has not been reported to the IRS will be considered a gift, not an expense, which could prevent qualifying for Medicaid.
Long-term care insurance policies.
If your loved one has a long-term care insurance policy, it might cover some costs for home health care and personal care services.
Interestingly, some policies will allow family members to be paid as a family caregiver, while other policies will not pay for spouses or other family members living with the care recipient.
Check with the insurance company or agent for specifics on coverage for payments to family caregivers. And ask for a written confirmation of the policy’s benefits.
Employer-sponsored paid leave programs.
An increasing number of employers provide paid leave for employees taking on family caregiving roles. Therefore, it’s worth asking your Human Resources department if they have programs that allow you to get paid as a family caregiver.
Home and community-based services programs.
Home and community-based services programs (HCBS) can help Medicaid beneficiaries who receive care at home. These programs, often available to people with intellectual or developmental disabilities, physical disabilities, mental illnesses, as well as for older adults, provide caregiving guidance and a tax-free stipend to caregivers.
Most states have more than one HCBS program, each targeting different groups of people and offering different levels of service. Contact your state’s Medicaid agency to learn what types of HCBS waiver programs it offers.
In all states, your loved one must meet your state’s eligibility requirements to receive nursing home care before he/she will qualify for HCBS benefits. Importantly, your loved one may not receive any benefits if he/she is not at risk of institutionalization. Importantly, most states require medical evidence of a particular diagnosis and/or a professional assessment about your loved one’s ability to do certain activities of daily living.
Caregiving is a rewarding, but difficult role. Certainly, it’s important to take care of yourself. Read these blog posts for more information:
NOTE: I updated this post on 7-26-22.