Have you ever wondered how you can get paid to be a family caregiver? If so, you are not alone! This is one of the most frequently asked questions. Unfortunately, we cannot provide you with a one-size-fits-all answer.
You have the best chances of getting paid to be a family caregiver if you are caring for a loved one who is a U.S. military veteran or is eligible for Medicaid, but there are other possibilities such as through long-term care policies or tax credits and reimbursements.
Getting paid for caring for a loved one with VA benefits
If your loved one is a veteran of the U.S. military, there are four plans for which they might qualify. VA benefits can and do change from time to time, so it is always a good idea to check back for updated information.
Veteran Directed Care is a program through the Department of Veterans Affairs for veterans who are enrolled in a Veterans Health Administration health care system and need nursing care—but want to live at home. Participants are given a monthly budget and are able to choose the goods and services that would be the most helpful to them—including a caregiver to help them with activities of daily living. For more information and to determine your loved one’s eligibility for the program, click here.
Aid and Attendance (A&A) benefits are available to veterans who qualify to receive a VA pension—someone having served on active duty for at least 90 days, during a time of war, and honorably discharged. Recipients must also meet one of these criteria: require assistance with activities of daily living, be confined to bed due to a disability, have very limited eyesight, or live in a nursing home due to a physical or mental incapacity. Click here for the A&A application form.
Housebound benefits are for veterans receiving a military pension who are housebound due to a permanent disability. Please note that under this program, adult children and other relatives can become paid caregivers for family members, but spouses cannot. The application is the same as for A&A benefits—but you cannot receive both at the same time.
The Program of Comprehensive Assistance for Family Caregivers is for caregivers of veterans who need help with activities of daily living due to an injury or illness sustained in the line of duty on or before May 7, 1975, or on or after September 11, 2001. To be eligible, veterans must meet certain disability and need criteria. Stipends are based on the federal pay rate for where the veteran lives. Under this program, the caregiver must be 18 years or older and can be a spouse.
For more information on caregiver benefits for veterans, visit the VA Caregiver Support page or call its hotline at 855-260-3274.
Getting paid to be a family caregiver through Medicaid
Medicaid is a federally funded state program that helps with healthcare costs for people with limited income and resources—including low-income or older adults and those with significant disabilities. This may be a good time to mention that Medicaid and Medicare are two different programs.
To be eligible for Medicaid, your loved one must meet one of the following criteria:
Be considered low-income according to the guidelines in the state where they have established residence. In general, to qualify, one must make around 138% of the poverty limit or lower.
Be considered “medically needy”—meaning that their health needs are intensive and may require overwhelming expense.
Medicaid has plans that in some states allow older adults to select and compensate their caregivers—including an adult child or, in some states, their spouse. Home and community-based waivers help older adults who would rather receive in-home care. Qualifications vary by state, but in general, older adults must need care that is usually provided by a skilled nursing, assisted living, or memory care facility—such as activities of daily living. To qualify, there needs to be a care plan with the caregiver and the cost for in-home care cannot be more than the cost of similar care in a senior residential facility or community.
Self-directed person assistant services allow seniors to hire their own caregivers—usually family members or close friends. Under the program, the participant must develop a care plan with the caregiver and establish a back-up plan—in case the selected caregiver is no longer able to continue in their caregiver role.
Community First Choice is similar to the other Medicaid programs. Under the plan, seniors are able to manage their own care—including paying family or friends for their caregiving services. This plan was established under the Affordable Care Act and is available in nine states: AK, CA, CT, MD, MT, NY, OR, TX, and WA.
For more information on Medicaid, go to: https://www.medicaid.gov/.
Getting paid for caregiving for a parent through tax credits and reimbursements
There are several tax credits and reimbursements available for caregivers. If your parent’s gross annual income—not including society security—is less than $4,300 and you cover more than half the cost of their support, it may be possible to claim them as a dependent. Even if these criteria don’t apply, it might be possible to deduct the majority of care expenses from your taxes. You should be sure to consult an accountant or tax attorney. The regulations vary by state and some state-funded caregiver payment programs do not allow for family members to claim their elderly loved ones as dependents on their taxes. These options may not be financially beneficial for you in the long run.
Getting paid for caregiving by your loved one
One possible way for your loved one to pay you for caregiving is if they have long-term care insurance. Policies vary by company, but many long-term care policies allow payment for in-home caregiving. The insurance company can tell you if a family member can provide this care.
Another option to consider is that if your loved one is of sound mind and has sufficient financial resources, they may be able to pay you directly for caregiving services. If this is something you are considering, it’s advisable to draw up a personal care contract or agreement establishing your compensation and what care services will be provided. You may want to include other immediate family members in the discussion so there are no surprises or misunderstandings later.
You should also consult an elder care attorney to make sure that the contract complies with any tax laws. Any compensation received is considered income and should be reported on your taxes. If your loved one is currently on Medicaid or may be in the future, you want to make sure that any payments made to you don’t violate their eligibility requirements or Medicaid regulations. Other interested parties, such as siblings, should approve the agreement as well. This could help avoid any hurt feelings or disagreements when it comes to issues of inheritance.