Getting Paid to Take Care of a Family Member
Caring for an aging loved one who’s unable to care for themselves can be mentally and physically taxing. On top of that, it’s an expensive commitment. Often people who care for a loved one spend their own money on supplies and dedicate their time and energy to their loved one’s well-being. As a result of that commitment, many caregivers miss out on paid work opportunities and ultimately find themselves taking a large hit to their finances. Luckily, there are programs that provide financially for family caregivers.
In this guide, we explain the different ways caregivers can obtain financial help while taking care of an aging or disabled family member. It’s important to note that each program has its own eligibility requirements, and as such, not all people will be eligible.
Getting Paid by Medicaid to Take Care of a Loved One
If you’re caring for a senior who’s enrolled in your state Medicaid program, they may be eligible to receive funding to pay you for your services. While each state has different eligibility requirements and waivers, most states provide programs for older adults such as Home and Community-Based Services waivers and Community First Choice programs that allow them to access self-directed care. In some cases, that means the participant can choose to employ a family member or another loved one to provide personal care services, and Medicaid will pay for the services they provide.
Seniors and other adults who direct their own care as part of a Medicaid program are required to follow certain rules and regulations when selecting their caregiver and determining the services they’ll receive. These rules are determined by the state and are different with each program; however, most include provisions for person-centered planning, written service plans, budgeting and case management.
Financial management services are often available for those who direct their own care, as well. Although some states and waivers allow participants to oversee their own budgets, financial management services are recommended to help with cost management and expenditure tracking. Additionally, financial managers can complete payroll for caregivers, ensuring taxes are withheld appropriately and pay is distributed in a timely manner.
Veterans Benefits for Family Caregivers
Seniors receiving benefits from Veterans Affairs (VA) may be able to enroll in benefits to help them pay for a family caregiver. If you’re caring for someone who has served in any branch of the U.S. military, they should receive a monthly pension from the VA that can be partially used to pay for their care. Additionally, there are several other benefits that exist to help veterans pay for personal care services that a family caregiver provides.
Veteran Directed Care
Veteran Directed Care is a benefit available to all veterans, regardless of their age or income, provided they have a proven clinical need for care and live within the service area. This program provides veterans with funding to help them access home and community-based services while directing their own care and may be used to provide a salary for a family caregiver.
Aid and Attendance and Housebound Allowance
The Aid and Attendance and Housebound Allowance benefits are provided by Veterans Affairs. These two benefits provide monthly payments to veterans or qualifying dependents with a proven need for personal care. The payments must be used to pay for personal care services and may be used to provide a salary for a family caregiver. To qualify for Aid and Attendance benefits, one must be either a veteran or surviving spouse who requires help with daily tasks such as bathing, grooming or other activities of daily living. The Housebound Allowance is available to veterans required to remain at home due to a permanent disability.
Program of Comprehensive Assistance for Family Caregivers
Veterans who have long-term or permanent disabilities sustained while in the line of duty may be eligible for funding from the Program of Comprehensive Assistance for Family Caregivers. Funds are distributed to help caregivers cover travel costs, caregiver education and other expenses while providing assistance for a loved one.
Tax Benefits for Caregivers
The IRS provides several provisions for claiming dependents, including those you’re providing care to, such as elderly parents or other relatives, on your annual income tax return. If you choose to take advantage of any of these benefits, be sure to keep detailed records and copies of receipts for any related medical expenses.
Credit for Other Dependents
If you’re caring for a loved one and paying their expenses out of your own pocket, you’re likely eligible to claim the Credit for Other Dependents on your income taxes, which is a $500 non-refundable credit. This provision allows you to claim dependents provided both you and the individual you’re caring for are U.S. citizens with valid identification numbers, and their income is not greater than that year’s tax cutoff amount. Additionally, your loved one must be dependent on you, meaning that you pay a minimum of 50% of their living expenses, and they must have lived at the same address as you for the entire tax year. If you’re claiming a dependent under this provision, you may not be claimed as a dependent by anyone else.
Head of Household Status
The IRS allows single taxpayers claiming dependent relatives to claim as the Head of Household, which raises the standard deduction amount. To claim as the Head of Household, a dependent relative needs to have lived in your residence for a minimum of half the tax year.
Deductions for Medical Expenses
If you’re paying for medical expenses for a dependent loved one and those costs aren’t reimbursed by insurance or other benefits, you can claim the amount on your tax return, provided the total expense is in excess of 7.5% of your adjusted gross income. A variety of healthcare expenses, including medications, copayments and adult day care, are covered under this provision.
Frequently Asked Questions
How can I get paid to take care of my parents?
Speak with your parents about benefits they may be eligible for, such as Medicaid waivers and Veterans Affairs programs that can help them pay for in-home care. Some of these programs allow elderly adults to direct their own care, which means they have the option of hiring family caregivers and using the benefits to pay for your services.
Are there tax benefits for caregivers?
If a loved one is dependent on you, you may be able to claim some expenses related to their care. That includes medical expenses that you’ve paid for on their behalf. Additionally, if your loved one is living in your home, you may be eligible to claim the Credit for Other Dependents, a $500 tax credit that’s available to those providing full-time care to a family member or friend.
Does Medicaid pay family caregivers?
While standard Medicaid doesn’t provide payments for family caregivers, there are waiver programs available in most states that allow beneficiaries to self-direct their care. Under these waivers, beneficiaries may be able to select a family caregiver, and Medicaid will provide funding to pay for their services.
Does Medicare pay for a family caregiver?
Medicare does not typically pay for long-term family caregivers; however, it may provide funding for caregiver training for family members, assistance with case management or funding for short-term care if a loved one is recovering from an illness or injury.