How to Get Paid for Being a Family Caregiver

Where to find the funds and how to settle on the terms for providing in-home care.
Mother and daughter

If you're one of more than 70 million people who provide unpaid caregiving for a family member or friend -- either in that person's home or in your own -- you know that the time and energy burden can be enormous. In fact, you may have cut back or given up your paying job. Your smaller (or now nonexistent) paycheck may be pinching you hard. If so, it might be possible for you to get a small but regular payment for your caregiving work.

Here's how: If the parent, spouse, or other person you're caring for is eligible for Medicaid, its Cash and Counseling program, available in some states, can provide direct payments that could go to you. A few other states have similar programs for low-income seniors, even if the person receiving care doesn't quite qualify for Medicaid. Also, if the person you're caring for has long-term care insurance that includes in-home care coverage, in some cases those benefits can be used to pay you.

If the person you're caring for will be paying you from any source, it may be a good idea -- for both of you -- to draft a short written contract setting out the terms of your work and payment.

Medicaid In-Home Care Assistance for People with Little Money

People with low income and few assets other than their home may be eligible for Medicaid (called Medi-Cal in California) healthcare coverage. This includes in-home care, which can mean some low-level healthcare monitoring and services but which usually consists mostly of personal care -- the same kind of care you probably provide: help with bathing, dressing, cooking, cleaning, eating, moving around, and similar activities of daily living.

When Medicaid provides in-home care, it usually does so through a licensed home health care agency. Medicaid pays the agency, which sends its care aides to the senior's home on scheduled visits. This arrangement works well for many people. But for others, in-home care through an agency isn't the best arrangement. Many in-home care agencies are overstretched, with high worker turnover. This can mean that in-home care visits are sometimes irregular, with changing caregivers who don't know the senior's needs and preferences. And if you (or another family member) are already providing most of the care, the occasional presence of an outsider may not be that helpful.

How Cash and Counseling Programs Can Help

Experts in in-home care understand that family members often make the best caregivers. Knowing this, and recognizing that professional home care agencies aren't always able to provide consistent care, Medicaid in some states runs a program called Cash and Counseling, which pays seniors directly to cover their in-home care. The amount the senior receives depends on a Medicaid assessment of need and the prevailing pay rate for in-home care aides in that state.

Seniors can then use the money to pay anyone of their choosing -- including you or other family members -- to provide care. They can also use some of the money to buy things for the home that would make life more comfortable, such as kitchen items, a new vacuum cleaner, safety equipment, or the like. Or they can use some of the money to pay for services such as cleaning, meal delivery, or transportation.

Cash and Counseling programs are currently in effect in the following states: Alabama, Arkansas, Florida, Illinois, Iowa, Kentucky, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington, and West Virginia. Other states have programs similar to Cash and Counseling, offering cash for in-home care to seniors who have little money but whose income or assets are slightly too high for them to qualify for Medicaid in that state.

How Cash Assistance Programs Work

Cash assistance programs have several components and application processes and eligibility vary among states:

  • Eligibility. If the seniors you're caring for don't already have Medicaid coverage, you can help them apply for Medicaid or another cash assistance program. This means gathering bank, tax, and other records that show how much they have in income and assets. Medicaid (or the other relevant cash assistance program) can then determine if they're financially eligible.
  • Assessment. If the seniors you're caring for are financially eligible, the program will come to their residence to assess their in-home care needs. They'll speak with you and other caregivers about the care currently provided, and they may speak to their doctor.
  • Determination. Based on the assessment of needs, the Cash and Counseling or other program determines how many monthly hours of in-home care assistance it would approve if the care were coming from an in-home care agency. Using the rate that in-home care workers are paid in the state, it then figures out how much in total it will directly pay to the seniors every month to help with in-home care.
  • Plan. The seniors decide who they want to provide the care and how much they'll pay you or other caregivers out of the program's monthly payment. (It has to be at least minimum wage, but it can be any reasonable amount you and they agree on.) They can also decide how else they might want to spend some of the money. The program helps seniors work out this plan, including paperwork and taxes.

Find State Programs Where You Live

To find out whether your state has a consumer-directed cash assistance program for seniors, contact your local Medicaid, human services, or social services office. To find the nearest Medicaid or other state office that handles in-home care programs, contact your nearest Area Agency on Aging and ask them who to call in your state to learn about direct payment programs for in-home care.

Other Direct Pay Options

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 mean 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

Only a relatively small number of seniors have long-term care insurance. But if the seniors 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 seniors 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 this type of certification yourself. Often, low-cost certification classes are offered at local adult schools or community colleges.

Dependent Tax Exemptions

If none of the direct pay options apply to you, investigate whether you're eligible 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 in order to qualify, you must cover more than 50 percent of their 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.

Draw Up a Family Care Agreement

If the person or people 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 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 where the money is going. If the person or people 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.

Remember that this payment is viewed as income by the government, so all family caregivers must report their earnings each year as taxable income. Though the money received for providing homecare services is negligible, it will help to offset many of the costs associated with providing mom or dad with a loving, stable, and comfortable home.

Find out more about why a personal care agreement can be a good idea, and how to draft one.

Laura Dixon

As Caring's Editorial Manager, Laura writes and edits articles about important issues for family caregivers and seniors. See full bio

25 days ago, said...

Mom has lived me for 4 years. Once Dementia progressed and a couple falls occurred and I had been let go of my job due to the owner I worked for sold the business, I have been seeking a remote job part or full time so I can stay home to continue to care for her. She has Medicare/Medicaid and SS however, my COBRA ends 1/31/18 and without an income and not wanting to touch my IRA retirement account, there is not going to be enough to pay the bills. Is SS available, to help assist me in a remote position? A friend told me they could help? No income, no insurance for medical, dental or vision for me. I have a Dr. appt for a hip issue after 6 years of having a full hip replacement, and if any surgery is needed, I cannot afford that. On-line applications for remote positions is not helpful. Please advise. Thanks.

about 1 month ago, said...


3 months ago, said...

We placed my mother in a nursing home after asking several different agencies (medicare, medicaid and the nursing home) about home care benefits for her and being advised this is not a covered service, Both my sister and I care for my mother but work and I have a teenage daughter. I would have given anything to keep my mother with me or place her in her own small apartment and continue care from home. We reside in Hamlin NY and I would love to know more about the caregiver program and what my options may be now that she is placed in the nursing home.

3 months ago, said...

Will the caregiver receive health benefits as well? I have health insurance through my current employer so I need it.

3 months ago, said...

Are there any health benefits for care givers?

4 months ago, said...

My grandmother suffers from Demensia and needs someone around 24/7 but unfortunately all of my family work full time jobs and we are unable to be with her all the time like we need. Is there any way that I (granddaughter) can be paid to care for her so I can give up my full time job? We live in Baltimore, MD.

4 months ago, said...

I'm caring for my mom 24/7 due her having 6 strokes she has bleeding in the brain and needs to be careful for 7 days a week for 24 hours, she has heart problems, rheumatoid arthritis and osteoarthritis in all her joint, she depressed, has COPD, osteoporosis, OSA, gout arthritis, emphysema lung, GERD, migraine headache aphasia and dysphagia and cognitive deficits from the strokes.She needs a ride her to and from 5 doctors due to these conditions.

5 months ago, said...

( am totally disabled. I want my husband to tend to me. He is a retired partially disabled vet. Can he get compensation for caring for me at our home.

5 months ago, said...

hi my name is joann murray and i stay home and take care of my mom and my dad and my husband/my husband is permnet disabled he had cancer and the surgery he had almost killd him he has two rods and eighteen screws in his back/ he fell about two months ago and it dameged 80% of his heat and the D.R is giveing him three to six months to live/and now my mom is a diabetic and i have to bath her change her when she has an accedents i clean i cook wash clothes take her to the dr /and two monthes ago my dad had a heart a tack my days anights are full it is a full time job to care of my family /but like i tell them its okay my parents took care of me till i gotmarried so now its my turn to take care of them thay are the best parents i could ask for and i will do it for the rest of my life. but i cant get a job cause thay need me at home twentfour seven /i need to see about getting paied as acaregiver to help with stuff thay need.

5 months ago, said...

ok, I am on ssi and I am also my mother's in-home care giver full time. We are trying to get me to get paid to be her caregiver, she is on ssd.. now, she does not have the money to pay me and I don't get enough to pay my own bills on ssi myself. I was told I can get paid more money to do this but my ssi would stop which is ok. When she is gone, I would have to go back on ssi but I won't be able to go through that long process of 2 yrs. again, but someone told me I can get right back on it without all that, is this all true?

5 months ago, said...

Whats the best way for me to get paid while taking care of my grandmother. I'm 18 years old with a broken back and she is a very heavy set woman. HELP PLEASE.!!!!

5 months ago, said...

I am 38 years old and next week I am having surgery on both hands. I have carpal tunnel in both. My mother has not worked in over 20 years due to illness. However she will be taking care of me after the surgery. I live in Ohio and want to know is there any way i can receive funds to assist with her taking care of me? If so how. Thank you.

5 months ago, said...

My mom is 92 yrs of age. A stroke left her paralyzed on her right side. She is confined to a wheelchair, she is dependent on me for all her needs. Mom also has Alzheimer's since her stroke. I am 66 yrs of age and left my job to take care of her. My question is: can I file for disability for Mom ? Our budget is very tight so anything would help.

6 months ago, said...

I recently moved to California from Georgia. I would like My same caregiver to come here, is there help for her to get transportation money? She will be living with me most likely, how do I keep up with hours worked or is it by help she does?

6 months ago, said...

I Had taken care of my Mother for 9 years due to alzhimers-didn't work for 9 years had to take out a reverse mortgage to get money to survive, lost the house in 2011 via foreclosure. Moved east with my 2 disabled brothers, I got a job was working when one of my brothers who is aged 68 caught pneumonia I took time off to care for him, my employer was furious at me for taking too many days, and fired me. .My second brother recently had a kidney stone episode, which got me thinking I cant be away from my Brothers and work at the same time, and I don't want a stranger to help.

6 months ago, said...

my xhusband now has to live with me because he cannot take care of himself. I work from home so tht helps. I make his meals, do his laundry, take him to the doctor, do any running around he needs taken care of, help him take a shower. He has COPD and every breathing problem you can think of. He also has major leg pain so he cannot move around because of the pain and breathing. He is receiving social security but can i be paid for taking care of him? This takes alot of my time. I was in the process of getting a second partime job to help me make my ends meet now I cant.

Stay Connected With

Get news & tips via e-mail