Ways To Pay for Caregivers
Does providing care for a loved one have to be financially draining?
Providing care for a loved one is an honorable responsibility, and it can also be emotionally and physically consuming and financially draining. According to "Caregiving in the U.S. 2020," a report from AARP and the National Alliance for Caregiving, over 48 million Americans care for a family member or friend without being compensated. Many incur substantial out-of-pocket expenses that go unreimbursed. These expenses frequently prevent caregivers from saving and oblige them to assume more debt.
Though Medicare covers home health benefits for individuals under a doctor's care only when delivered by a Medicare-certified home health agency, there are other avenues to compensation that caregivers can – and should – explore.
Get paid by Medicaid
Medicaid permits qualified individuals to manage or direct their long-term care, including selecting a caregiver. Generally, enrolling in self-directed Medicaid services involves the following steps:
Assessment — evaluate the person needing care for capacity, needs, preferences, strength, and risk.
Planning — write a service plan detailing daily living assistance required, including bathing, feeding, housekeeping services, meal preparation, and transportation.
Budget — develop a budget for services needed.
Selection — select a caregiver once the care plan is complete.
The rules for self-directed Medicaid services vary state by state (for example, some states prohibit spouses from being paid), so you should check with your state Medicaid program to find out if you qualify: medicaid.gov/about-us/beneficiary-resources/index.html.
Veteran's benefits
If the person you're caring for served in the military, several programs are available to assist.
Veteran-directed care
The Department of Veterans Affairs (VA) administers this program, enabling veterans to receive nursing care at home, at times by a caregiver of the veteran's choice. Veterans must be enrolled in the VA health care system. A VA Medical Center will assess needs and determine a monthly budget listing services needed.
Aid and attendance benefits
Aid and attendance (A&A) benefits supplement a VA pension and can help pay for a caregiver to assist veterans who meet specific criteria. Veterans may be living at home or in a nursing home, and you will need to fill out a detailed application available from the VA.
Housebound benefits
Housebound benefits supplement a VA pension for veterans confined to home because of permanent disability. An application is required; applicants may qualify for A&A benefits or housebound benefits but cannot receive both at the same time.
Compensation for family caregivers
This program provides a monthly stipend (based on regional federal pay rates) to caregivers of veterans seriously injured in the line of duty who meet eligibility requirements. Additional program benefits include training, health insurance, reimbursement of lodging and travel expenses incurred when accompanying a veteran receiving care, and up to 30 days a year of respite care.
Contact your local VA center to find out more: www.va.gov/find-locations.
Private pay
If the person you're caring for has the financial resources to pay you and is of sound mind, you can be compensated the same way a professional home health agency would. But the arrangement should be deliberate and detailed. Here are steps to consider:
Discuss the details in advance, including wages, sick days, and scheduling.
Write up a personal care agreement.
Consult an elder care attorney to ensure the contract meets tax requirements and determine if other family members need to approve it.
Keep records. This is important for your tax records but may also impact the care recipient's future eligibility for Medicaid.
Report income. You must report wages as taxable income, which will affect not only you but may affect the Medicare eligibility of the person you're caring for.
Long-term care insurance
Does the person you're caring for have long-term care insurance? The policy may cover the services you provide. Be sure to check the policy, as there can be exclusions for spouses or family members residing in the same home.