Informal caregivers are vital to helping seniors maintain their health and well-being in the community. But taking care of family members at home is no easy feat. As awareness and recognition of this important role increases, so too does the development and provision of supportive programs for aging Americans and their family caregivers.
According to a 2019 report conducted by the AARP Public Policy Institute, approximately 41 million family caregivers provided 34 billion hours of unpaid care in 2017, the estimated value of which totaled $470 billion. This care is commonly provided at a huge personal cost to caregivers, including lost wages and benefits. Many spend thousands of dollars out of pocket each year on their care recipients, often to the detriment of their own financial security and retirement savings. It should come as no surprise, then, that the No. 1 question asked in the Caregiver Forum is, “How can I become a paid caregiver for my parents?”
Can I get paid for taking care of my mom or dad?
Most family caregivers don’t get paid to care for their elderly parents. However, there are a few options that may allow a family member to receive payment in exchange for the senior care services they provide.
The options and resources listed in the sections below may help family members get paid for caregiving or at least offset the costs of providing care for an ill or aging loved one. While this article focuses on financial support for caregivers who are looking after their parents, some of these programs may also be available to spousal caregivers and those caring for other relatives. Note that public programs and assistance vary widely by state and one’s individual circumstances.
Personal care agreements
Not all care recipients will be amenable to this arrangement, but it’s possible for seniors to use their own funds to pay a family member for elder care (usually an adult child). It’s important to work with an elder law attorney to complete a formal personal care agreement or caregiving contract detailing this arrangement before it begins.
A personal care agreement should outline the services to be provided as well as the payment to be received. A major benefit of entering into a formal care agreement is that documenting and paying for in-home care services is a valid means of spending down assets or income to qualify for need-based programs like Medicaid and some VA benefits.
Read: Personal Care Agreements: A Must for Caregiver Compensation and Medicaid Planning
Veterans benefits
The Department of Veterans Affairs (VA) provides a wide variety of benefits to veterans and their families. VA home and community-based care programs, such as homemaker/home health aide care and respite care, are very helpful for both elderly veterans and their informal caregivers. However, there are three specific VA programs that pay family caregivers either directly or indirectly.
VA pension benefits
Pension benefits were established to help low-income veterans with limited assets cover their costs of living and care. There are three tiers of financial assistance, and each has specific financial, functional, and service-related eligibility requirements:
- Basic veterans pension — For those with the lowest income and assets
- Housebound pension — For disabled individuals with low income and limited assets who cannot leave their home without great difficulty or at all
- Aid and Attendance (A&A) pension — For those with low income and limited assets who require the help of another person to perform activities of daily living (ADLs)
Housebound and Aid and Attendance benefits are sometimes referred to as “improved” pensions because they provide higher monthly pension payments to offset the higher costs of care that eligible veterans incur. These tax-free monetary payments can be used however the veteran sees fit, including paying family members for elder care.
Qualifying unreimbursed medical expenses that exceed a certain amount can be deducted from a veteran’s annual income to help them meet the financial eligibility requirements for a VA pension. In-home care services furnished by a licensed and/or certified health care provider can count toward one’s deductible medical expenses, and payments to an informal caregiver may also count if certain conditions are met. The VA bases pension amounts on a qualifying veteran’s countable income, so using care expenses to reduce this number can increase the monthly payment they receive (up to a certain limit set by Congress).
Surviving spouses of eligible veterans may also qualify for a version of this monetary benefit called the Survivors Pension.
Veteran-Directed Care (VDC) Program
The Veteran-Directed Care Program gives veterans who need assistance with daily tasks more control over the types of services they receive and who provides them. Through this program, veterans will work with a VA social worker and other staff to determine their eligibility, assess their needs, create a personalized care plan, assign a monthly budget, hire workers, and manage their own care. Not only does this program allow veterans of all ages to avoid or delay placement in long-term care facilities, but it also enables them to pay family members and friends for their assistance using VA funds.
Availability and services vary depending on a veteran’s location, but this program is growing. Contact your local VA Medical Center (VAMC) to see if VDC is available in your area and inquire about specific eligibility requirements.
Program of Comprehensive Assistance for Family Caregivers (PCAFC)
The VA has expanded access to the PCAFC in the last few years. Through this program, a veteran’s eligible family caregiver may receive the following:
- Caregiver education and training
- Mental health counseling
- Financial assistance with costs of traveling to a VA Medical Center
- 30 days of respite care per year
- Access to health care through the Civilian Health and Medical Program (CHAMPVA)
- A monthly stipend
Read: The VA Program of Comprehensive Assistance for Family Caregivers
Medicaid
Medicaid is funded jointly by the federal government and state governments to provide health and long-term care coverage for low-income Americans. Each state administers its own program and has the ability to set their own eligibility requirements, services, delivery models, and payment methods within federal guidelines. Therefore, the composition of each state’s Medicaid program, while similar in many ways, varies widely.
Seniors and disabled individuals can access Medicaid long-term care services in a few different ways. Most people think of nursing home care as the only type of long-term care Medicaid covers. But options for home and community-based services (HCBS), such as home health care, personal care services (help with ADLs), respite care, home modifications, and adult day care, have been added to the mix over the years. HCBS programs enable Medicaid beneficiaries to continue living as independently as possible in their own homes and communities.
Additionally, many states have introduced self-directed service delivery models for HCBS. These may also be referred to as consumer-directed or cash and counseling programs. Those who self-direct are able to choose the covered goods and services they receive and their providers. Medicaid will even pay beneficiaries’ family members to be caregivers in some states. Much like the veteran-directed care program, Medicaid beneficiaries work with counselors who help with needs assessments, care planning, budgeting, training, payroll, and other tasks associated with self-direction.
Traditionally, spouses were ineligible to receive Medicaid pay for their caregiving services in many states because participation in a significant other’s care is to be expected. Most beneficiaries choose to pay their adult children, ex-spouses, or other relatives for personal care services. However, growing interest in aging in place, supporting seniors and family caregivers, and minimizing health and long-term care costs has led many states to rethink who’s eligible for self-directed payment. For example, under Florida's Consumer-Directed Care Plus Program, “providers may include a consumer’s neighbor, friend, spouse, or relative.”
To ensure the safety and well-being of those who participate in these self-directed programs, family caregivers may need to meet requirements that vary by state, such as the following:
- Passing a background screening
- Completing caregiver training
- Formally registering as a care provider
However, it’s worth noting that compensation for family caregivers through Medicaid is generally low. Pay rates are based on the Medicaid-approved hourly rate for home care services in each state.
Applied Self-Direction, an advocacy organization, has compiled a directory of self-directed programs (both Medicaid and non-Medicaid) available in each state that may be used to compensate family caregivers. Contact your state’s Medicaid office for detailed information on available services and programs, eligibility requirements, and how to apply.
Long-term care insurance and life insurance policies
Long-term care insurance policies typically cover some degree of in-home care services, but only if they’re delivered by a formal provider that’s properly licensed and certified. Examples might include a home health aide or a nursing assistant hired through an agency. However, some policies may cover care provided by informal caregivers, such as spouses and adult children.
Additionally, life insurance policies may be leveraged to pay for caregivers. An aging parent may be able to sell their policy or surrender it for cash value to fund a paid care arrangement. Some hybrid policies even have long-term care benefits already built in.
Terms of coverage vary from policy to policy. If your loved one purchased long-term care insurance or life insurance, be sure to contact the insurer to clarify the specifics of their coverage.
Paid family and medical leave
Family caregivers are often forced to choose between working and caring for their aging parents. Most people have heard of the Family and Medical Leave Act, which requires some employers to provide workers with up to 12 weeks of job-protected unpaid leave so they can care for themselves or their family members. While unpaid leave may be beneficial for working caregivers who are spread thin, it doesn’t help them pay their bills.
Fortunately, several states have expanded their laws to offer paid family and medical leave to workers. According to the Bipartisan Policy Center, the following states have enacted paid family leave programs:
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Massachusetts
- Maryland
- New Jersey
- New York
- Oregon
- Rhode Island
- Virginia
- Washington
Note that coverage, eligibility requirements, and provisions for each state’s paid family and medical leave program do vary. If you live and work in one of these states, you may be able to continue receiving a paycheck while caring for a loved one on a short-term basis. Talk to your employer’s human resources representative about employee benefits and federal and state programs you may qualify for as a family caregiver.
Tax deductions and credits for caregivers
Although tax deductions and credits won’t pay you directly for the care you provide, they may help reduce the financial strain associated with caregiving. For example, claiming an aging parent as your dependent can help lower your tax payment. Even if you can’t claim your loved one, you may still be able to deduct unreimbursed medical expenses that you paid on their behalf. Consult your accountant or tax professional for more information.
Read: What Medical Expenses Can Be Written off on Taxes?
Other sources of financial assistance for seniors and caregivers
If none of the above options is a good fit for you and your loved one, it may help to search for other benefits and services. Even a single program that can minimize the financial strain on your household can be worthwhile.
Supplemental Security Income (SSI)
The Social Security Administration’s Supplemental Security Income (SSI) program pays benefits to low-income aged, blind, and disabled adults. Unlike Social Security retirement benefits, SSI benefits aren’t based on a person’s prior work. Applying for and receiving SSI is also useful because the eligibility guidelines are the basis for many other programs such as Medicaid and food stamps.
To learn more about SSI and apply for benefits, visit the Social Security Administration website.
BenefitsCheckUp
BenefitsCheckUp is the nation’s most comprehensive database of benefits programs for seniors. BenefitsCheckUp is a free service provided by the National Council on Aging. This online tool allows elders to see if they qualify for nearly 2,000 federal, state, and private benefit programs simply by answering a few questions.
Available resources include the following:
- Prescription drug savings
- Nutrition assistance (including Supplemental Nutrition Assistance/Food Stamps)
- Energy/utilities assistance
- Income assistance
- Legal aid services
- Housing services
- In-home services
- Transportation services
Area Agencies on Aging
For in-person assistance with exploring programs and benefits that are available to you and your loved one, contact your local Area Agency on Aging (AAA). Each AAA serves seniors, individuals with disabilities, and family caregivers in a designated area — usually a city, county, or multi-county district. These offices are staffed by elder care professionals who are knowledgeable about every assistance program and service that’s available in their area.
Gather as much information as you can about your and your care recipient’s health and finances and make an appointment to meet with a counselor at your AAA. The staff there can advise you on prospective programs and eligibility requirements and even help prepare the necessary applications and documentation. Visit the Area Agency on Aging Directory to find your local AAA’s contact information and schedule an appointment.
Elder law attorneys
Elder law attorneys help seniors engage in estate planning and prepare legally and financially for their long-term care needs. Families who need to apply for Medicaid (or anticipate needing to do so in the future) are strongly encouraged to work with a reputable attorney to create a personalized Medicaid planning strategy beforehand. Medicaid programs are very complex and mistakes can be costly.
When looking for an attorney to help you and your loved one draw up legal documents and apply for benefits, ensure the lawyer you choose has elder law experience specific to the state where your loved one resides.
Read: How to Find a Good Elder Law Attorney
Disease-specific organizations
Disease-specific organizations and charities may be able to connect you and your loved one with benefits and services related to their health conditions. For example, the American Parkinson’s Disease Association offers a financial assistance program for individuals with Parkinson’s, and HFC offers home care grants for dementia caregivers.
Read: Disease-Specific Organizations for Support and Information
In-home care supports seniors and family caregivers
If you’re feeling torn between caregiving and bringing home a paycheck, in-home care may be a solution. While most prefer to keep this responsibility in the family, home care services can be beneficial for everyone involved. A trained caregiver can provide your loved one with additional support in their home, allowing you to resume working or simply enjoy some respite time. Many of the resources above can be used to pay for professional home care services, too.
Care decisions like these can be complex, but we’re here to help. If your loved one could benefit from companionship, assistance with household chores, and personal care services, one of our Care Advisors can help you find a local home care provider that meets their needs — and yours.
Reviewed by caregiving expert Carol Bradley Bursack.
Sources:
Eligibility for Veterans Pension (https://www.va.gov/pension/eligibility/)
VA Aid and Attendance benefits and Housebound allowance (https://www.va.gov/pension/aid-attendance-housebound/)
2023 VA pension rates for Veterans (https://www.va.gov/pension/veterans-pension-rates/)
38 CFR 3.278(a) (https://www.ecfr.gov/cgi-bin/text-idx?SID=ad275643432556b9dda942343fb89296&mc=true&node=pt38.1.3&rgn=div58#se38.1.3_1278)
Veteran-Directed Care (https://www.va.gov/geriatrics/pages/Veteran-Directed_Care.asp)
Veteran Directed Care Program (https://acl.gov/programs/veteran-directed-home-and-community-based-services/veteran-directed-home-community-based)
Program of Comprehensive Assistance for Family Caregivers (PCAFC) (https://www.caregiver.va.gov/support/support_benefits.asp)
Home & Community-Based Services 1915(c) (https://www.medicaid.gov/medicaid/home-community-based-services/home-community-based-services-authorities/home-community-based-services-1915c/index.html)
Self-Directed Services (https://www.medicaid.gov/medicaid/long-term-services-supports/self-directed-services/index.html)
The 2022 Florida Statutes (including Special Session A) (http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0409/Sections/0409.221.html)
Family and Medical Leave Act (https://www.dol.gov/agencies/whd/fmla)
Paying Family Caregivers to Provide Care during the Pandemic—and Beyond (https://www.aarp.org/content/dam/aarp/ppi/2021/02/ltss-choices-paying-family-caregivers-to-provide-care-during-the-pandemic-and-beyond.pdf)