As of 2020, it's estimated over 53 million people provide unpaid care to a loved one each year. That's around 1/5 of the U.S. population, and this amount is only expected to increase as the population ages.
Most people who haven't experienced family caregiving think of it as having mom or dad live with them, maybe spending a bit more quality time together, and providing help here and there.
However, caring for a loved one is much more than that. It involves long-term care and helping your loved one with daily living activities like toileting, personal hygiene, and bathing.
This can be physically, emotionally, and financially hard on family caregivers and even embarrassing for care recipients. Yet, many families find themselves in these dire situations unexpectedly, with few other options.
We all want the best for our loved ones, but what happens when our boundaries are left undefined and we start to experience the unforeseen impacts of long-term care and aging?
Unpaid caregiving can be very draining. Many people report feeling stressed and overwhelmed, which can lead to caregiver burnout. But did you know there might be a way to get paid for your hard work?
There are several avenues to help pay family caregivers, including Long-Term Care Insurance and Medicaid. This article discusses various ways to get paid to provide care for your loved one or, at the very least, receive some form of compensation, either through tax credits or paid family leave.
The Challenges of Getting Paid as an Informal Caregiver
Becoming a paid family caregiver isn't always a straightforward process, but it is still doable. The main issue with many payment programs has to do with having the right certifications to qualify as a caregiver. Plus, the compensation you receive may be far less than what you receive through your job.
For example, Medicare does not offer compensation to informal caregivers. However, Medicare may compensate properly certified caregivers.
You must have a professional certification to qualify as a caregiver under Medicare rules. Since Medicare only pays for skilled services, this limits the type of services Medicare considers paying.
To receive Medicare caregiver compensation, your loved one must meet the following criteria:
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Your loved one must be enrolled in Medicare.
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Your loved one must need services that are deemed medically necessary by a professional on your loved one's care team.
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A hired caregiver must meet all Medicare requirements and participate in the Medicare program. Family and friends are excluded.
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Your loved one's doctor must create a plan that showcases what care should be provided.
If you attain the proper qualifications to become a caregiver, or if you create a written agreement, it may be possible to get paid for caring for your loved one.
Medicare also claims to have a program to start compensating caregivers, but at this time, the implementation and how much they're willing to compensate caregivers is unknown. The program requires substantial changes, and most observers say it is unlikely anytime soon for Medicare to make this type of change, if ever.
Other resources, like Medicaid, already offer compensation for qualified caregivers providing non-skilled, custodial long-term care services. However, your loved one must qualify for Medicaid eligibility, and requirements may vary by state. We'll cover more Medicaid information in the next section.
Getting Help Through Medicaid
One of the most common ways to get paid as a family caregiver is through Medicaid. To recap, Medicaid is a health insurance program for those with limited financial resources and disabled individuals. Those who qualify are entitled to long-term care and medical care coverage provided by Medicaid-certified providers.
There are several Medicaid programs that help support caregivers. One way is through the Consumer-Directed Personal Assistance Program (CDPAP).
The Consumer-Directed Personal Assistance Program allows Medicaid recipients to choose a family member or friend as their caregiver instead of a state-designated Medicaid caregiver. Each state has a different spin on this program, and depending on your state, you may be required to get certificates to qualify as a caregiver for the program.
If you've met your state's caregiver requirements, and your loved one is eligible for CDPAP benefits, then they can fill out an application to get you certified as their informal caregiver.
Once certified, you and your loved one will work together to create a care plan and schedule that works best for both of your lifestyles. You'll also work with a Medicaid representative to find out how much you'll be getting paid.
Keep in mind that Medicaid reimbursements for care can be very low. While Congress has been looking for ways to increase compensation, even with adjustments, compensation will still be low.
Another way to get paid through Medicaid is through HCBS Waivers or 1915(c) Waivers. These Medicaid waiver programs provide in-home care and community-based services to recipients.
The waiver program may also allow care recipients to choose a personal assistant to help them with care needs. They can then use money from the waivers to compensate their chosen personal assistant for informal care.
Lastly, an indirect way to receive compensation is through the Child Caregiver Exception. This program allows a Medicaid recipient to transfer their home to their informal caregiver, bypassing the Medicaid lookback period and estate recovery rules.
However, this program is only available to care recipients with an adult child who has lived with the care recipient for over two years and provides custodial care full-time.
Long-Term Care Insurance
Long-Term Care Insurance is a great way to cover the cost of long-term care facilities and services and protect your assets and savings during retirement. But did you know some insurance policies allow you to pay informal or family caregivers?
Every Long-Term Care Insurance policy is different, but many allow you to compensate a family member for providing personal care. Consult with a Long-Term Care Insurance specialist or reach out to your insurance company to learn if this option is available with your policy.
Keep in mind that getting paid for caregiving through Long-Term Care Insurance is only available for people who already have Long-Term Care Insurance policies. Once you need care, it’s impossible to qualify for a new LTC Insurance policy.
Military Benefits
Military and Veterans Affairs benefits are one of the most promising ways to help compensate family caregivers. There are three main programs we'll discuss today that not only offer payment for caregivers but also offer an extension of VA benefits to help caregivers in need.
Veteran-Directed Home & Community-Based Care
The Veteran-Directed Home & Community-Based Care program offers a flexible monthly budget to veterans who need long-term care services. This program is also known as the Veteran-Directed Care (VDC) program.
Veterans of all ages are eligible for this program. The goal of the program is to help isolated, disabled, or aging veterans get the care they need on their own terms.
The monthly budget is managed by a Veterans Affairs representative; however, veterans are free to choose how to use this money to cover their care costs.
For example, a veteran could use these monthly payments to pay a family member to take care of them. They could also use it to hire a non-VA-affiliated caretaker of their choice.
The program aims to give veterans control over their situation in hopes of helping them age and recover in their homes safely and comfortably. The specific budget will depend on the veteran's needs, income, and other factors.
Program of Comprehensive Assistance for Family Caregivers
The Program of Comprehensive Assistance for Family Caregivers helps informal caregivers get paid for providing personal care services. These services include helping with daily activities, safety, and household chores and responsibilities.
In order for a caregiver to qualify, you must be 18 years or older and meet at least one of the following:
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You are a spouse, child, grandchild, or family member of the veteran.
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You live with the veteran full-time or are willing to live with them full-time.
The veteran must also meet specific requirements to qualify for benefits:
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Must have a disability rating of 70 or higher.
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Must have been discharged or medically discharged.
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Must need at least six months of personal care services.
Veterans are able to appoint one primary caregiver and up to two secondary caregivers. The process to apply is relatively simple; both parties just need to sign off on the application. For any further questions, contact a Veterans Affairs representative.
The Program of Comprehensive Assistance for Family Caregivers offers several benefits to designated caregivers, including:
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Education and training.
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Assistance with travel expenses when traveling for their veteran's care needs.
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Access to counseling.
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A monthly stipend to cover care costs.
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Thirty or more days of respite care per year.
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Access to military health insurance coverage.
Keep in mind that benefits can depend on your specific situation. It's important to talk with a Veterans Affairs representative to find out what benefits you are eligible for.
Aid and Attendance Benefits
The Aid and Attendance benefit is an additional amount added to the monthly veteran pension stipend that can help pay family or informal caregivers for their services.
Veterans can get Aid and Attendance benefits if they already receive a pension and meet at least one of the following requirements:
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They need help with activities of daily living like dressing or bathing.
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They are bedridden or spend a lot of time in bed due to illness or injury.
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They live in a nursing home due to loss of cognitive or physical ability.
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They have bad vision even with glasses or contacts (5/200 or less in both eyes).
Eligible veterans will receive an additional amount in their monthly pension benefits that can help pay a family member for the care they provide.
Other Forms of Compensation or Help for Family Caregivers
It can be difficult to get paid as a caregiver, especially if your loved one does not qualify for or have Medicaid, Long-Term Care Insurance, or military benefits.
However, several resources are still available to caregivers, including tax benefits and programs that may offer different compensation options.
Paid Family Leave
Some states around the country require employers to offer some paid family leave. Some people may assume that family leave programs are only for childcare and pregnancies. However, these programs allow you to take this leave to care for an aging loved one as well.
Paid family leave programs vary heavily by state. In fact, only eight states require employers to have a paid family leave program, and eight more states either have one coming soon or make it optional for employers. Some employers also offer this benefit well beyond any state requirement.
If you are in a paid family leave state, you can use these benefits to take time off of work while continuing to receive a paycheck. While this isn't a long-term solution to getting paid for informal caregiving, it can give you the break and time you need to create a long-term plan for your caregiving situation.
Paid family leave is also a great way to prevent or delay caregiver burnout. Burnout happens when someone overworks themselves, either through work, caregiving, or a combination of the two.
Taking time off of work without worrying about where your next paycheck will come from can give caregivers a mental break and help them recover from potential burnout and stress. Check with your state and employer to determine your eligibility for a paid family leave program.
In addition to state-run paid family leave programs, there is a federal program called the Family and Medical Leave Act. This program can help you take unpaid time off to care for a loved one. While this program does ensure job security during your time off, it does not offer paid compensation during your leave.
Tax Credits and Medical Expense Deductions
If you're unable to become a paid family caregiver, you may be eligible for some tax credits and benefits for caring for your aging parent or relative. There are several different types of tax benefits available.
One method is to claim a tax credit for providing care. Tax credits are different from tax deductions. A tax credit reduces your overall tax bill, while a tax deduction reduces your taxable income.
To claim a tax credit, you must first claim your elderly parent or relative as a dependent on your taxes. To do so, you and your loved one must meet the following requirements:
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You can't be dependent on another taxpayer.
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Your loved one cannot file a joint tax return unless it's for a refund.
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Your loved one must be a U.S. citizen, national, resident, or a resident of Canada or Mexico.
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You covered more than half of your loved one's care costs.
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Your loved one's income is less than $4,700.
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Your loved one doesn't qualify as a dependent on someone else's taxes.
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Your loved one must live with you.
Another tax benefit is the ability to deduct expenses from your tax return. The best way to do this is to itemize your deductions and keep track of each expense accrued throughout the year.
Keep in mind that you can only deduct the amount of medical expenses that exceed 7.5% of your adjusted gross income.
For example, if your adjusted gross income was $1,000, then 7.5% of that income would be $75. Now, let's say you spent $100 on care. You would subtract $75 from $100, leaving you with $25 to deduct from your taxes.
National Family Caregiver Support Program
The National Family Caregiver Support Program was created to help families care for their loved ones and allow older adults to live at home safely for as long as possible. This program offers grants to states to provide ample resources for family caregivers.
The main goal of this program is to help give family caregivers what they need to extend care for as long as possible. This program doesn't explicitly focus on compensating family members for the care they provide; however, it may help connect you with the advisors and programs available for your area and specific situation.
The biggest benefits of this program include:
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Educational resources for family caregivers.
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Personalized assistance in accessing available caregiving services and resources.
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Counseling, access to caregiver support groups, and caregiving training.
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Respite care.
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Limited supplemental services.
In order to qualify for help through the National Family Caregiver Support Program, you must meet one of the following requirements:
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You must be over the age of 18, and the care recipient must be over the age of 60.
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You must be over the age of 18, and the care recipient of any age must have Alzheimer's disease or a related dementia condition.
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You must be over the age of 55, and the care recipient must be a child under the age of 18.
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You must be over the age of 55, and the care recipient must be an adult between ages 18-59 with a qualifying disability.
Area Agencies on Aging
The Area Agencies on Aging (AAA) is a group of agencies dedicated to helping seniors get the local resources and different programs they need. Each county, city, or area has a local branch, which individuals can contact to find resources in their area.
Not every Area Agency on Aging goes by the same name; however, most of these agencies provide similar types of resources. For example, they may be able to connect you to meal programs, homemaker services, or other independent living services.
In addition, your local Area Agency on Aging may have resources to help you get paid as a family caregiver. They may be able to connect you with local programs to get paid or trained in order to become a paid caregiver. In addition, they may also be able to set up respite care so you can take a temporary break from your caregiving duties.
Speaking of respite care, one of the best ways to find caregivers and care providers, including respite care, is through the LTC News Care Directory. This tool can help you search through high-quality care services in your or your loved one’s area to find the best care available.
This tool compiles all types of long-term care, including respite care, home care services, independent living, assisted living, and skilled nursing, just to name a few. Regardless of what type of career you’re looking for, you can find it here.
How to Get Paid for Family Caregiving
Getting paid as a family caregiver can be challenging. However, programs like Medicaid, military benefits, and Long-Term Care Insurance can help you get paid for your hard work.
If none of these avenues are available to you, there are countless state-run programs dedicated to making family caregiving more sustainable as a long-term solution. Some of these programs may pay you for your care services, and others may offer respite care or training programs to help guide you toward a healthier, long-term solution.
Still, there are options to save on your taxes and take paid time off work to help provide care for your loved one. Your local area may also have community-based services available to help you meet your needs.
There's no wrong or right way to get paid for informal caregiving. There are a plethora of resources available to read through right at your fingertips. LTC News also offers various informal caregiving resources to help you provide the best quality of life possible to you and your loved one:
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How To Balance Caregiving Responsibilities and a Career – It can be tricky to work a full-time job and take care of a loved one. This article offers a few solutions to help you reach a balance in your life.
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Trends in Caregiving: What It Means for Caregivers and Care Recipients – The world of caregiving is always changing. As new technology and policies emerge, caregiving strategies may start to change for the better.
- How to Care for a Loved One With Diabetes – Diabetes is a common condition, especially among aging adults. Learn how you can help your loved one manage their condition better and ensure a higher quality of life.