Caring for a parent is an expectation that many children face as their loved one begins to age and requires more assistance. Often, many family members provide care for their loved ones for free without any form of payment or reimbursement for their time.
Did you know some programs pay you to care for your aging parent?
Depending on your state, there are several ways to become a paid caregiver for your mother, father, or family member. This piece will discuss how to get paid through various government programs and paid options so you can receive compensation for taking care of your elderly loved one at home.
What Are the Challenges Faced by Family Caregivers?
There are many benefits to providing care for your loved one, such as creating a deeper, more personal, and sympathetic connection. Although caring for a family member is extremely rewarding and a bonding experience, there are some potential setbacks with being an unpaid home care family caregiver.
Many family caregivers must adjust their lifestyles and reduce the number of hours they work outside of the home to provide ongoing personal care for their loved ones. Since so many family caregivers are unpaid and full-time, issues can arise regarding the financial burden of providing care and the lack of independence outside of the care relationship. These factors can lead to increased opportunities for burnout and fatigue, straining relationships and mental health due to the demanding nature of caring for someone.
A recent 2020 report by the AARP Public Policy Institute revealed that more than 1 in 5 adults — a total of 53 million adult Americans—are now unpaid family caregivers, up 29.3% compared to 2017. AARP estimated the 2017 economic value of these unpaid care contributions at a staggering $470 billion, revealing the economic value of unpaid family caregivers. Various factors such as cost, coverage, preference, and availability can influence whether a family chooses to receive additional care outside of their immediate family. Getting paid to provide personal care to a loved one requires some research, but there are many programs that pay family caregivers and offer financial assistance.
What Paid Care Options Are Available to Family Caregivers?
Although the topic is complex and ever-changing, there are many paid care options available to family caregivers providing personal care for their elderly loved one. This article will discuss the following programs and options:
- Medicaid Options
- Home & Community-Based Services (HCBS) 1915(c) Waiver Program
- In-Home Supportive Services (IHSS)
- Veteran Program
- State-Based, Non-Medicaid Programs
- Life Insurance
- Long Term Care Insurance
- Paid Family Leave Laws
- Tax Deductions and Credits
- Veterans Directed Care Program
- Veteran’s Aid & Attendance Benefits and Housebound Allowance
Does Medicaid Pay for Family Members to Be a Caregiver?
The most common source of payment for family caregivers is through Medicaid. Depending on eligibility and requirement guidelines, low-income individuals may obtain health care coverage through Medicaid. Medicaid is not just for nursing home care, and many programs offer paid assistance options outside of assisted living facilities. Luckily, every state provides self-directed Medicaid services for long-term care that allows qualified individuals to manage their long-term care services and home care providers.
Depending on your state, hiring a family member to provide home care may be a suitable option for them to receive compensation. Numerous different Medicaid programs open the door for family members to receive payment as caregivers. Many Cash and Counseling programs are through Medicaid and provide financial assistance and consumer direction for personal care services. If a senior receives medicaid, they may be able to compensate the family caregiver. Due to varying state programs and requirements, this article will only discuss two Medi-Cal-specific programs (Medicaid in California) that allow family caregivers to receive compensation. It is important to check with your state’s Medicaid programs to determine what you may qualify for due to changes in requirements, program names, and eligibility.
Home & Community-based Services (HCBS) 1915(c) Waiver Program
Many states such as California have home and community-based services waivers (HCBS Waivers) that pay people a daily, tax-free stipend to remain at home instead of transitioning into an assisted living facility or other post-care option. Across the country, these HCBS waivers permit states to pay for care outside of the nursing home setting and therefore better meet the needs of people who prefer long-term care services at home.
California offers several waivers, which is why it is essential to check with your State’s programs and requirements to determine the right HCBS waiver for you. States are allowed to create as many HCBS Waivers as they see fit, and these programs must follow national guidelines to ensure they adequately support those eligible. This waiver program assistance also covers people of all ages with certain types of disabilities.
In California, there are several HCBS waivers available, including:
- Assisted Living Waiver (ALW)
- Multi-Purpose Senior Services Waiver (MSS)
- Home and Community-Based Services Waiver for the Developmentally Disabled (HCBS-DD)
- Veteran-Directed Care (VC-HDBS)
Most HCBS waivers allow “Consumer Direction,” which enables the care recipient to choose their care service provider themselves. Therefore, the care recipient can select a family member, such as their child, who gets compensated through the Medicaid HCBS stipend. Consumer directed personal care provides flexibility to individuals looking to hire family members for assistance with activities of daily living.
The language of these policies and payment rates for the care provider are state-specific. HCBS waivers are not entitlements, and many waivers are enrollment capped and have waiting lists, so it is best to plan ahead.
Learn more about Medicaid HCBS Waivers:
California In-home Supportive Services (IHSS)
Specific to California, IHSS is a Medi-Cal program that helps eligible people pay for services provided to them to remain safely at home. Although the IHSS requirements are strict, it provides payments directly to Medi-Cal recipients, who then pay the caregivers they choose, including their children, spouses, family members, and friends. The program covers services such as house cleaning, meal preparation, grocery shopping, laundry, and other various personal care services.
1) Must be 65+, disabled or blind (disabled children are potentially eligible)
2) Must be Medi-Cal eligible
3) Must be a California resident
4) Must live at home
5) Strict income requirements
6) Submit a Health Care Certification form
To learn more about IHSS program requirements, visit:
What Programs Can Veterans Use to Pay For a Family Caregiver?
If your loved one is a Veteran currently enrolled in the VA health care system, they may be eligible to receive funding assistance that can help pay for family caregivers and personal care. Two main Veteran programs provide funding assistance: Veterans Directed Care program and Veteran’s Aid & Attendance and Housebound Pension program. Veteran programs that pay family caregivers are an excellent option for individuals who prefer to stay at home and receive personal care services from a loved one.
Veterans Directed Care Program
The Veterans Directed Care (VDC) program (formerly VD-HCBS) provides eligible Veterans with the funding and freedom to select their home care provider, including family members. Veterans must require the same level of care as a nursing home to be considered eligible. This program enables Veterans with specific care needs to receive care services outside of the VA health care system. VDC can help families with a Veteran loved one who requires a high level of care and prefers to stay home.
Approved home care family caregivers receive payment at a rate determined by the Veterans Health Administration, which varies by region. Local VA Medical Centers determine Veteran’s needs on a case-by-case basis, and compensation varies depending on the level of in-home care needed. VDC can help pay family caregivers for the personal care they provide and depending on the hours per week, may be a great option for consumer directed care.
To learn about VDC eligibility requirements, visit:
Veterans’ Aid & Attendance Benefits and Housebound Allowance
The Veterans’ Aid and Attendance Program provides supplemental monthly payments on top of the Basic Veterans / Survivors Pension for qualified veterans, survivors, and their spouses. The monetary value of this additional pension depends on the non-pension-related income of the Veteran and can be used to compensate family caregivers.
For the family caregiver to receive compensation, the Veteran loved one must hire their family member as a private caregiver. This private family caregiver will then invoice their Veteran loved one for their home care services, who will then subtract those care costs from the income they report to the Department of Veterans Affairs. From there, the Department of Veterans Affairs increases their payment by the amount they deducted, reimbursing the Veteran for the cost of their private, in-home care. To qualify, your loved one must be already receiving a VA monthly pension and meet at least one of the following requirements:
- They need daily living assistance and help with activities such as bathing, feeding, dressing, and personal care
- They have an illness or condition that requires them to stay in bed for a long duration of the day
- They are currently a nursing home patient dealing with the setbacks of a disability
- They have poor eyesight and difficulty seeing
For detailed information on VA Aid and Attendance or Household benefits, visit: https://www.va.gov/pension/aid-attendance-housebound/
State-based, Non-Medicaid Programs
Depending on your state, various nursing home diversion programs may exist with the goal of reducing unnecessary placements for seniors who live at home. To keep the elderly from overcrowding assisted living facilities, these state-funded programs give care recipients similar “Consumer Direction” as the Medicare programs. Eligible participants can independently choose their caregivers and, under certain conditions, hire their child or another family member to assist and take care of them. Pay rates depend on the local average caregiving rates and vary depending on your area and the directed services.
One downside of these programs is that even with Consumer Direction, not every state allows the program participant to hire a family member. Additionally, not every state participates in creating these programs which makes accessibility difficult for seniors and family care providers. Financial stability and income are also determinants of availability, making these programs selective and challenging to receive funding for your family caregiver.
To learn more about state-based programs, visit:
How Can a Family Caregiver Be Paid with Life Insurance?
Another option to receive compensation as a family caregiver is if your senior loved one converts their life insurance policy to pay for your services. Life insurance policyholders have the option of selling their policy to a third party in return for long-term care services at an agreed-upon dollar value. There are many pros and cons to this approach, so it is best to discuss and weigh them with your senior loved one and come to an agreement.
An immediate benefit of converting a life insurance policy is that the policyholder immediately receives funding. The economic value of the long-term care provided is greater than the policy’s cash surrender value, making the sale worth it in some cases. Additionally, the family no longer must make monthly payments to keep the policy going since it falls on the third-party buyer. When your senior loved one passes, the third-party buyer receives the death benefits of the policy.
The sale and conversion of a life insurance policy is not without its drawbacks. For example, the policyholder’s family will no longer receive the death benefit from the policy and ultimately receives less value than if it were kept intact. Many times, the economic impact of this conversion outweighs the benefit of receiving immediate care funding assistance. Depending on the expected lifespan of the policyholder, families should consider paying the care through other means or determine if the sale is worth it for providing short-term care funding relief.
For more information, contact your loved one’s life insurance company to learn how they approach policy conversions.
How Does Long-term Care Insurance (LTCI) Work?
If your senior loved one has a long-term care insurance policy, there is the possibility they can provide compensation to a family caregiver. It is important to note that each policy’s requirements vary, and some do not allow the policyholder to compensate a family member for their care needs. Most health insurance policies don’t cover long-term care costs.
Many common LTCI policies also require that the caregiver responsible for the policyholder is licensed. Although this creates an additional step for the family caregiver, the process is quick and easy. After they establish a business license as a care provider, the family caregivers will then be paid through their senior loved one, who is then reimbursed by the LTCI policy.
Paid Family Leave Laws
One alternative option to receive payment as a family caregiver is to utilize state-specific Paid Family Leave (PFL) programs. These programs allow individuals to take paid time off to care for their loved ones full-time and are not limited to the elderly. Although the benefit amount is reduced based on the family care provider’s weekly wage, these programs may be able to provide temporary compensation and job protection during periods of time when you need to be with your family.
Unfortunately, PFL programs offer only temporary relief as most laws limit paid leave periods between 4 and 12 weeks. Furthermore, there are only a few states that participate in providing paid family leave, making it difficult to take advantage of these programs.
Family Caregiver Tax Deductions and Credits
Although not a complete form of compensation, tax deductions and credits can provide some financial relief to family caregivers. Individuals with financially dependent parents can deduct medical and care expenses from their income in order to help reduce the tax burden of providing care. It is important to keep track of your care expenses as a family caregiver in order to take advantage of the tax deductions.
Many options exist for family caregivers to receive compensation for their time spent providing care for their elder parent. With the amount of unpaid family caregivers increasing each year, and many of them full-time, millions of people are seeking funding assistance and payment for keeping their loved one safe and healthy at home. Programs that pay family caregivers are available in each state and can help with the financial burden of providing personal care.
Although most programs are complex and vary by state and eligibility requirements, family caregivers and recipients should fully explore each paid care option to determine the best solution. Providing elder care can create stressful financial situations for families, so it is best to check in with your state and local programs to see what you may be eligible for.
24 Hour Home Care’s team of industry experts is educated on the various funding sources available to family caregivers. We combine the reach and resources of a nationwide home care agency with the culture and personal touch of a neighborhood business. For more information on funding sources and how our respite care service can provide your family with relief, call us today!