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. Unfortunately, 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.
Can I Get Paid for Being a Family Caregiver?
It should come as no surprise, then, that the number one question asked in the Caregiver Forum is, “Can I get paid for caring for my parents?” Sadly, the answer is complicated. The vast majority of family caregivers do not get paid to care for an elderly loved one. However, there are a few options available that may allow a family member to receive payment in exchange for the elder care services they provide.
Personal Care Agreements
Not all care recipients will be amenable to this arrangement, but it is possible for seniors to use their own funds to pay a family member (usually an adult child) for the care they provide. It is 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 completing 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 or some VA benefits. Keep in mind, though, that a personal care agreement cannot be created for retroactive payment for past care.
To learn more about how personal care agreements work and how to draft one, read Personal Care Agreements: A Must for Caregiver Compensation and Medicaid Planning.
Sources of Government Assistance for Caregivers of Elderly Parents
Public programs and assistance vary widely by state and one’s individual circumstances. The resources listed below may help family caregivers get paid for their services 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 who are caring for other relatives.
Veterans Benefits
The VA provides a wide variety of benefits to veterans and their families. For example, VA home care programs, such as homemaker/home health aide (HHA) care and respite care, are very helpful for both elderly vets 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 specifically established to help low-income veterans with limited assets. There are three tiers of financial assistance, and each has specific financial, functional and service-related eligibility requirements:
- VA 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).
The Housebound and A&A benefits are known as “improved” pensions because they allow for higher monthly pension payments to offset the higher costs of care that eligible veterans require. These tax-free monetary payments can be used however the veteran sees fit, including to pay a family member for their 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 these pensions. In-home care services furnished by a licensed and/or certified health care provider can count toward these 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 effectively increases the monthly payment he or she can 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
Veterans who want to continue living in their homes but need help with ADLs and instrumental ADLs can enjoy more control over the types of services they receive and who provides them by applying for Veteran-Directed Care. Through this program, veterans who are enrolled in VA health care 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 the VDC 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 expanded access to the PCAFC in 2020 and another expansion should occur October 1, 2022. Through this program, a veteran’s eligible family caregiver may receive:
- 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: VA Expands Program of Comprehensive Assistance for Family Caregivers
For more information on veterans pensions and other VA benefits, visit VA.gov.
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 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 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, which may also be referred to as consumer-directed and “cash and counseling” programs. Those who self-direct are able to choose the covered goods and services they receive and from whom. Even friends and family members can become Medicaid paid caregivers in some states. Much like the veteran-directed care program mentioned earlier, 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 an ill or elderly 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 is eligible for self-directed payment. For example, under the Consumer-Directed Care Plus (CDC+) program in Florida, “providers may include a consumer’s neighbor, friend, spouse, or relative.”
Of course, to ensure the safety and well-being of those who participate in self-directed programs, these family caregivers must meet requirements that vary by state, such as passing a background screening, completing training and even formally registering as a care provider. It is worth noting that family caregiver pay rates are based on the hourly rate for home care services in each state.
The COVID-19 pandemic underscored the need for more robust supports for elderly and disabled individuals who live in the community as well as their informal caregivers. To keep high-risk individuals safe while ensuring they get the care and services they need, many states have adopted or expanded self-directed care programs at least temporarily.
Applied Self-Direction, an advocacy organization, has compiled a directory of self-directed programs (Medicaid and non-Medicaid) available in each state that may be used to pay family caregivers. Contact your state’s Medicaid office for detailed information on available services and programs, eligibility requirements and how to apply.
Other Financial Assistance for Seniors and Caregivers
If none of the above options is a good fit for you and your elderly loved one, it may help to search for other financial 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 are not based on a person’s prior work. In addition to increasing one’s income, applying for and receiving SSI is useful because the eligibility guidelines are also the basis for many other programs, such as Medicaid, food stamps, etc.
To learn more about SSI and apply for benefits, visit the Social Security Administration website.
Benefits CheckUp
BenefitsCheckUp is the nation’s most comprehensive database of benefits programs for seniors with limited income and resources. BenefitsCheckUp is a free service provided by the National Council on Aging. This online tool allows elders to see if they qualify for more than 2,500 federal, state and private benefit programs simply by answering a few questions.
Available resources include:
- 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 aging 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 is available in their area.
Gather as much information as you can about you 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 Strategies Help Families Pay for Senior Care
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, make sure the lawyer you choose has elder law experience specific to the state where your loved one resides.
Sources: Valuing the Invaluable 2019 Update: Charting a Path Forward (https://www.aarp.org/ppi/info-2015/valuing-the-invaluable-2015-update.html); 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/); 2021 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); Florida Consumer-Directed Care Act (http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0409/Sections/0409.221.html); 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)