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.
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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 Self-Directed Services program (also known as Cash and Counseling), 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 Self Directed Services 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 Self Directed Services, 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.

Self Directed Services 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 similar programs, 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 Self Directed Services 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.

20 days, said...

How many paid caregivers can I have? Can my parents be paid for me living in their home as a disabled person? Please help!

22 days, said...

I live in Texas and I'm providing care for my son. He is 45 years old and has stage 4 terminal prostate cancer. I'm 71 and have been working part-time but can no longer continue due to his needs. Are there any programs available for parents providing help to their children?

about 1 month, said...

Hello, I am a 54 year old male who has been taking care of my wife for 6 years now. She needs help 24/7/365. I have not been able to work for 1 year and have exhausted all of our retirement and savings. Can you please tell me what i can do to get paid to take care of my wife? We are now in a big financial hole. Thank You very much

about 2 months, said...

I live in Colorado & am 75. I am slightly above the Medicaid income threshold. Can anyone tell me how to get my caregiver paid for her sacrifices?

2 months, said...

We live in Ohio and I have health issues that require me to need help with my daily needs, My partner has been taking care of me and has even lost a couple jobs because of me needing him to stay with me, I am on total social security disability. I don't qualify for Medicaid but, I do get what they call "extra help" through Medicaid to pay my Medicare premium. Is there a program that anyone knows of that can pay him as my disability is not enough to provide for both of us?

3 months, said...

Mother is declining mentally and not getting adequate socialization in retirement facility. We are looking at bringing her to our home. She would like to use money she is paying now to pay us. Besides setting up a family care agreement, what steps can I take to make this happen. Are there any financial templates I can use to track everything so we don't have legal trouble? Thanks.

4 months, said...

hello, I recently moved to florida from California to take care of my elderly grandmother who has dementia. due to the extent of the care she requires holding a job ontop of my caregiving duties I cant hold a job. I am in deserapte need of help funding or something. what steps do I take?

4 months, said...

My husband makes decent money working at home, however his health is poor and I have been his caregiver which meant I gave up my job and cannot be gone for long periods. Is there any program that assist me with monies?

5 months, said...

Please tell me more about taking care of my spouse for income that is available through cash assistance programs

5 months, said...

I take care of my sister and have for over 20 years. She is a paranoid schitzophrenic with psychosis. she receives social security which is her and my name. I was wondering if theres any programs that would pay me for this as it is difficult for me to leave her. we live in Hammond Indiana

5 months, said...

I want to work mom and dad take care for them

5 months, said...

My husband is 95 yrs old retired and became disabled at age 85 due to stroke, affecting his mobility and speech I have been retired since 2011 and continue to old my RN licence, currently I hlold two part time jobs to help with medication costs. My husband is requiring more care more assistance and I wlll not be able to continue working I am his full time caretaker for every day life activity Do I qualify to be on some program to get pay since I can not longer able to continue working due to his increasing disability requiring more time for his needs?

5 months, said...

My mother-n-law suffers from Demensia and is going blind (already blind in her left eye and will be in her right due to monocular degeneration, 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 (daughter-n-law) can be paid to care for her so I can give up my full time job? We live in Winnsboro, TX

5 months, said...

What if a newborn has a disability that requires specific medical help to consume formula? Tube in stomach.

5 months, said...

Are there any programs available in Georgia. There are many people here who are taking care of family and friends and need this help and who deserve it. I am trying to help a woman who is over 70 and who is taking care of someone. If you can offer any information, we would really appreciate it. Thanks so much!

5 months, said...

I have been care taker for my mother and my step father since beginning of Jan 2011 and can I get paid for that mom passed set 15 th this year step dad free more years ago

5 months, said...

I forgot to say u live in seaford,de. Where can I go for help?

5 months, said...

I'm renting a room in a friend's home. I have chronic pain and fall alot. My friends son is here all day helping me and taking care of me,my doctor has prescribed that I need help with ADLs. I use a walker to get around but am basically homebound as I am unable to go anywhere without my walker or help. How can this young man get paid?

6 months, said...

My roomate was diagnosed with dementia and needs 24 hour super vision.i cant afford to pay anyone n neither can she.we live in Massachusetts.coastline for elderly only allows 13 hours per week to pay her grandaughter.dotty will mot allow strangers to come in.her grandaughter has asked other family members to help.they can not afford to not get paid.where can we go for help?

6 months, 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.