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.

SEE ALSO: Find In-Home Care Help Near 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.

SEE ALSO: Find In-Home Care Help Near You

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.

In-Home Care on Medicaid: 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 the 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.

Finding out about 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.

Long-Term Care Insurance and Family Care Agreements

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 to family caregivers

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.

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

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.


1 day ago, said...

Are there any financial programs that isn't medicaid in California. I've given up working so I can take care for my mom who has ALS. As far as we have been told we would have to pay back whatever money we got from Medicaid after she passes. We are not in the financial situation where we would be able to pay it back. Can anyone let me know? Please. I've been here 2 years and don't go out much do to the lack of money.


3 days ago, said...

I'm getting ready


12 days ago, said...

I am cureentry taking care of my Aunt and Uncle my u clear by marriage is Co fined to the bed and can not walk. My Aunt is 87 years old and in the early stages of dementia. I moved In to help them because they can't take care of themselves. There is a homemaker that comes 3 days a week 2 hours a day but the rest is on me. is there some way that I can get paid for taking care of them?


14 days ago, said...

I am looking for help with this. My husband just left me and took the car. I have moved in with my grandparents who I have been taking care of for the last five years with my husband's support. I have been able to do this without having a job because of my husband's income, but since I don't have that anymore, I need an income. This would be the best option if possible, because since he took the car, I have no way to get to and from a job.


16 days ago, said...

I had a question about what to do when a family member is using money that's for the disabled and he also hadddddd a trust fund left to him that she has used for 5 vacation I.n the last 2 years. This couple used to struggle with money now they aren't. I feel that money should be used for him.


17 days ago, said...

How can i be a caregiver for my mom in high point n.c


19 days ago, said...

Hi, I am looking for guidance in this. I have just moved back to Cali. I am disablied and 60 years of age. I have a hard time even understanding what I'm reading much less what I need to do for getting help. My daughter helps me when she has time off work, but that can sometimes and now more than often overwhelming for both of us, I hate asking her to do things, although she says she doesn't mind, but I went through this when my Dad, Brother, and Mom needed help when they all became sick, I was the one they called on, it took about 30 years from my life, and now they are all gone and I'm alone and in the same siuation, I only have my daughter and do not want her to spend her time and money doing what I did, I was not compensated for it, but if my daughter helps me I'd like her to be, at least until my strength returns. Which I also need help with therapy for... Just the things from moving I need help with are overwhelming me and I can not do by myself, I was able to buy a small m.h. about an hour away from her and feel as I am, all alone and desperation kicks in and then depression the circle starts adding more to it for every day that passes. I need help desperately and just don't know where to start. I need to buy a used car and don't even know how to do that. Before my accident I knew how to do it all and did. Any starting suggestions?


22 days ago, said...

Having been through all this with my father and then my mother I will say that everone here should hire an elder law attorney in their state to handle and advise them. The other option is navigating your state's medicaid program which in NY is run through the HRA (human resources administration.) As far as this program with compensating friends or family for caregiving: it is a cumbersome and invasive application process, you will never be approved for all the hours you give care, the hourly rate will be very low, and you will need to reapply often.


about 1 month ago, said...

I am caring for my elderly husband who has congenital heart failure. I had to quit my job because I have no family to help us here in Orlando. So times are getting hard for us. I am beginning to stress and feel depressed. If the is some kind of financial help available for us please let me know. Thank you in advance


about 1 month ago, said...

I have missed many hours at work to sit with my father in law, granted it's not about the money but I also have bills to be paid. So I'm looking to become his full time caregiver to have a little income coming in. Can anybody help me


about 1 month ago, said...

How do i have my daughter get paid to watch her fater full time. He is in a nursing home and are not happy since he has been placed in a Behavor mgmt program due to his being angry after two weeks of placing him, My daughter is a 4th year nursing student and has a full time job in a behavor hospital and now wants to come home and watch her dad we are not happy with him being confined now diapered when he went there he wasnt


about 1 month ago, said...

Hello my mother is 62 years old with copd who is in and out of the hospital she also recently had a stoke She's in a nursing home now but she will be coming home in a week I will be the one taking care of her so that means I have to take time off of work. Would I be a good candidate it get paid from family care?


about 1 month ago, said...

My mother is 81 y.o. and my father who was 100% disabled veteran passed 3 years ago. As time goes by my mother now needs me to be with her a lot of my time as her mobility is limited. I honestly cannot afford to be without an income due to being a single mother of a child that fully depends on me. Is there any help where I can apply to either get her someone to come and be with her during the hours I work or maybe supplement my income so I can be with her instead?


about 1 month ago, said...

Can I get help taking care of my cousin. She's 39 and permanently disabled


about 1 month ago, said...

My grandfather has a stroke and he requires alot of care as his wife cannot take care of him at all. I quit my job in order to keep them from going into a nursing home. They are very poor and my funds are running dry, so are their funds..We need help. They don't have a good income, less than 19,000 per year with lots of medical bills flying in!


about 1 month ago, said...

My brother is age 27 and permanently disabled and has been since birth. He is wheelchair bound and needs assistance with meal prep housekeeping, bathing, and transportation to and from drs appointments. My son age 26, is going to be his caregiver but has to cut back on his work hours to do so. He received SSI and medicaid, will he be able to receive benefits to pay for his caregiver.