Your first hiring decision: agency versus independent

Hiring a home care aide through the classifieds or word of mouth is usually the least expensive option. But you should know that it might create unexpected liabilities for your family, which legally becomes the employer. For example, you'd be held liable for any costs related to an injury that happens on the job, including medical expenses and disability payments. This may not apply if you hire your worker as a contractor, but having a "freelance" aide rather than an employee may not create the long-term solution you're hoping for -- high turnover plagues this industry. That said, hiring someone on your own can be a good idea if you have a personal connection or a strong endorsement from a friend.

If you hire an at-home caregiver through an agency, hourly rates tend to be higher (often significantly higher), but the agency will pay the FICA taxes, cover the worker's liability insurance, and fill out the W-4 and W-2 forms. "Once you factor in taxes and insurance, it really comes out to close to the same price," says Jacqueline Dollar, a geriatric care manager in Des Moines, Iowa.

Also, because an agency has a stable of caregivers, you might be able to try out a few and find just the right aide for your situation. "With an agency, you also have the right of refusal," says Anita Silverman, a geriatric care manager in Lake Worth, Florida. "The agency can replace the person if the arrangement doesn't work out." An agency may be able to provide a substitute caregiver if your primary home aide is out sick or on vacation, which can save you a lot of frantic last-minute phone calls.

Keep in mind that agency caregivers are bonded and insured, and they're trained in the basics of care. They often have training in CPR and first aid, as well. Agency employees are expected to abide by an ethics policy and company rules. And agency CNAs may also have nurses checking in on them to make sure all is well and to offer advice.

If you live far from where the care will be needed, or don't want to get involved with supervising an at-home caregiver day-to-day, an agency can be a good option for your family.