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Long-Term Care Insurance and Family Care Agreements

How to Get Paid for Being a Family Caregiver : Page 3

By , Caring.com Expert
Last updated: August 25, 2014
86% helpful

Veteran's benefits

Veterans needing home-based care may be eligible for Veteran-Directed Home and Community-Based Services (VD-HCBS). This program serves veterans of any age who are at risk for institutional placement by providing home and community-based services that allow vets to continue to live independently in their own homes. Beneficiaries can choose the mix of goods and services that best meet their needs and manage their own flexible spending budgets for personal care services, which can including hiring their own workers, including family and friends. For more information on VD-HCBS and to find program contacts in each state, visit the partner organization web site National Resource Center for Participant-Directed Services.

Long-term care insurance benefits to family caregivers

Only a relatively small number of older adults have long-term care insurance. But if the person or persons you're caring for have such a policy and it covers in-home care, there may be a way for you to be paid out of its benefits. If the policy covers in-home care but the persons in your care aren't yet collecting benefits, you can help them file a claim for benefits based on their care needs. If they qualify for monthly in-home care benefits and the policy pays them directly to them, they can use that money to pay you.

If, on the other hand, the policy requires that payment be made only to a state-certified in-home care aide, check with the National Family Caregivers Association or the Family Caregiver Alliance to find out the requirements in your state for getting such certification yourself. Often, low-cost certification classes are offered at local adult schools or community colleges.

Drawing up a personal care agreement

If the person or persons you're caring for are going to pay you -- from any source, including independent funds -- for caregiving, it's a good idea to draw up a simple contract that sets out the terms of the care and payment. This can help avoid uncertainty and disagreement between you and them about what you're supposed to be doing and when. Also, it can help avoid misunderstandings with other family members about who's supposed to be providing care and about where the money is going. If the person or person you're caring for ever need to enter a nursing home and aren't already on Medicaid, the agreement will show that these payments to you were legitimate, and not just an attempt to "hide" funds in order to qualify for Medicaid. To find out more about why a personal care agreement can be a good idea, and how to go about drafting one, see Prepare a Personal Care Agreement With Your Parent.

Dependent tax exemptions

If none of the direct pay options apply to you, investigate whether you qualify to claim your parent or other qualifying relative as a dependent on your income tax return. Your relative does not have to live in your residence, but you have to cover more than 50 percent of basic living expenses, including housing, food, medical services, and clothing. Several requirements must be met. For example, your relative’s earned income must be less than $3,900 (2013 tax year). Non-taxable income such as Social Security does not count toward this limit. For more information and to see if you qualify, check with your tax professional or view IRS information on the subject.