As any family caregiver will tell you, caregiving is hard. In addition to the stress involved, family caregivers often take a financial hit. But there are ways to get a hand paying for the care you provide, including some new ones created because of the pandemic.
In the recent Caregiving in the United States 2020 study from AARP and the National Alliance for Caregiving, almost 1-in-5 survey respondents said they experienced “high financial strain due to family caregiving.” Family caregivers spend an average of $7,000 a year out-of-pocket. These studies were completed prior to the pandemic, though, and the financial impact of family caregiving has gotten worse since the outbreak of COVID-19.
So it’s no surprise that many family members who devote significant time and money to caregiving wonder whether it’s possible to be compensated for their work. It turns out, sometimes they can.
Medicare & Medicaid
Medicaid compensates family caregivers through the Medicaid Self-Directed Services program. Every state and Washington, D.C. provides the self-directed option; some states allow the person needing care to hire family members to provide it. The Family Caregiver Alliance provides a state-by-state list of these programs—choose the state and click on “Caregiver Compensation.”
Some states have Cash and Counseling Programs that can directly pay some caregivers. You can find out if your state has a program by contacting your local Medicaid office, social services, or health department. The amount a family caregiver may receive depends on where you live—generally the minimum wage in the state.
Centers for Medicare and Medicaid Services offer Structured Family Caregiving to pay family caregivers and receive additional support. To qualify, the individual needing care must be eligible for Medicaid, need 24-hour care and supervision, and are located in Connecticut, Indiana, Louisiana, Massachusetts, Ohio, or Rhode Island.
Some states have similar programs that are not part of Medicaid but are aimed at helping lower-income individuals. To see whether that’s a possibility for your family, and find aging resources in your area, contact your local Area Agency on Aging.
If the person you care for is a veteran, you may be eligible for Veteran Directed Home and Community-Based Services, Veterans Pensions, and/or the Aid and Attendance benefit, all of which have the potential to provide some financial and other support. The Comprehensive Assistance for Family Caregivers program offers mental health services, travel expenses, access to health care insurance for family caregivers, and offers caregiver stipends. Call the VA Caregiver Support line at 1-855-260-3274 for more information.
Programs to pay family caregivers
There are hundreds of different programs that pay family members to be caregivers. Unfortunately, these programs all have complicated and differing eligibility criteria. The American Elder Care Research Organization created and maintain the Paid Caregiver Program Locator, a database that helps find programs which are relevant to your family.
Family and Medical Leave Act
If you work for an employer with more than 50 employees, you may be eligible for up to 12 weeks of unpaid leave to provide care while you protect your job. For more information, see Department of Labor Fact Sheet. Five states—California, New Jersey, New York, Rhode Island, Washington, and the District of Columbia have enacted laws that provide paid family leave for employees who need time off to care for family members who are ill, have a disability, or for a new child.
Some states are starting to offer caregiver benefits. Hawaii recently became the first one to pay a stipend to caregivers, as much as $70 a day. To qualify, you must work least 30 hours a week helping an elderly family member at home.
Check with your family member to see whether he or she has long-term-care insurance. This private coverage can help pay for an assisted living facility or a nursing home, as well as services in your own home. Depending on the specific insurance, a policyholder may be able to use a portion of the benefit to hire a family member. Call your long-term-care insurer to find out the details of the coverage.
If someone in the family has the financial resources—perhaps your parents who need care or a sibling or group of siblings—consider working out a deal. They might prefer to pay a family member instead of an outside health aide. This can be a good option, but should be approached carefully.
A “personal care agreement” can spell out the details of the plan, including a description of the type of care provided, the number of hours a week the caregiver will work, and how much he or she will be paid. Ideally, the agreement should be drafted (or at least reviewed) by an elder-care attorney. The National Academy of Elder Law Attorneys is a good resource, or if you have limited means, call your local Area Agency on Aging to ask about pro bono legal services. You can also draft an agreement yourself (sample contracts here) but ensure the document is dated and signed by all involved parties in the presence of a notary.
Aside from helping avoid family disputes, a formal legal agreement can prevent problems if the care recipient later applies for Medicaid. To determine eligibility, a person’s assets and expenses are subject to a “look back period” of up to five years. A care agreement will show that payments to a family member were a legitimate expense, not an attempt to reduce assets by gifting money to a family member.