Caring for an aging loved one is expensive. So expensive that many families find the costs overwhelming. With an estimated 53 million individuals across the country serving as family caregivers, you can imagine the hundreds of Google searches happening everyday about how to get paid to take care of a loved one. These searches likely result in a variety of answers, some confusing and many conflicting.
Caregiving is time consuming and causes strain on one’s emotions and finances. Being compensated for the care you provide makes sense and probably sounds pretty good. We’ve gathered strategies for family caregiver compensation, as they exist today. Policies within these strategies change and hopefully we’ll see more options for family caregivers in the near future. We’ve organized them from easiest to the more difficult to navigate.
1. Get Paid by Your Loved One
It is okay to accept payment for the care tasks you perform directly from your loved one. Many family caregivers feel guilty about taking this approach. However, if you couldn’t provide care, your loved one would need to pay a professional home care aide, which can be cost-prohibitive. This strategy not only values your time but can save your loved one lots of money.
There are some things to carefully consider before accepting payment from your loved one. You need to document the payments and your rate must align with the home aide wages for your area. If a family member is getting paid, documentation of payment will be important for future Medicaid eligibility. Because Medicaid has an asset limit (for most states this is around $2,000), the care contract will verify that paid funds were not gifted, rather were legitimate payment for care services. This will prevent a penalty during Medicaid’s look-back period, which goes back five years. Additionally, documenting the expenses related to care can help families claim available tax credits.
An effective way to document care and payment is with a care contract. This contract can go by many names; a family caregiver contract, a personal care agreement, an elder care contract, a personal services contract, or a family care contract. It is a written agreement between a caregiver or caregivers and the care recipient. Most often, they are between family members, such as an elderly parent and their adult child, however it is not required that the two individuals be related.
What does a care contract look like?
- Services to be provided and location: List all tasks and duties that are expected of the caregiver (e.g. light house cleaning, laundry, meal preparation, grocery shopping, providing transportation to medical appointments and social activities), and indicate the location in which services will be provided — such as the family member or loved one's home.
- Frequency of services: Document how often (how many days a week) and for how long (how many hours at a time) services are to be provided. The terms can be left somewhat flexible since care needs tend to change over time. For example, the contract might state, “a minimum of 20 hours per week” or “a maximum of 40 hours per week."
- Start date/length of agreement: State the date that care will begin. Remember, it must be a future date; the contract cannot be backdated. Also, it is important to include how long the agreement will remain in effect. This may be short term, such as just a few years, or for the life of the individual.
- Pay rate and frequency of payment: Include a rate of pay (this can’t be more than the going rate of a home care aide in your area) and how often payment is rendered (e.g. weekly, bi-weekly, once a month, or lump sum).
- Modification/termination clause: If the agreement is long term, it is highly recommended that the agreement be reviewed and modified as needed and/or on an annual basis. A clause that allows for termination of the agreement is also recommended.
- Signatures: Ensure both the care recipient and the caregiver sign the contract. Having the document notarized is not a bad idea!
While you can prepare a care contract without professional help, having an elder law attorney review it or provide a template for you is only going to strengthen your family’s arrangements.
2. Check Your Employee Benefits for FMLA and Paid Leave
When you start caring for an aging loved one, it’s a good idea to check in with your employee benefits. Many employers have expanded their policies around the Family and Medical Leave Act (FMLA) and paid leave to include the need to miss work because of caring for an elderly family member. Check on your employee policies and create an FMLA request letter. Knowing if you can claim approved time off, perhaps paid time off, provides exceptional peace of mind and can make you feel much better about those missed days.
3. Use Tax Credits
U.S. citizens that can claim their aging loved ones as a dependent and/or pay for their loved ones’ medical expenses (e.g. Medicare premiums, prescriptions, dental and nursing services, long-term care services, medical equipment, in-patient procedures) are eligible for tax credits. It’s worth knowing which credits you are eligible for. At tax time, it could mean a lower bill or a higher reimbursement. Your best source of information is a CPA. They keep up with new credits and deductions for individuals each year.
Click here to learn more about deducting care expenses on your taxes.
4. Leverage Certain Long-Term Care Insurance Policies
Not many of our senior citizens today have long-term care insurance, but if your loved one does, take a look at the policy for a provision for a family member to be paid for providing in-home care. Not all policies have this, but you never know unless you check. You can always contact the policy carrier and ask them.
5. Tap into Veterans Benefits
Of all the governmental support for aging citizens, Veteran Affairs has the most comprehensive programs for helping veterans and their families cover long-term care costs. Not everyone is a veteran, but if your aging loved one is, or the spouse of a veteran, take a look at their programs — specifically, the Aid & Attendance benefit, the Veteran-Directed Care Program, and the Program of Comprehensive Assistance for Family Caregivers. Each program offers financial support for aging veterans and the people that care for them. Check in with your regional VA Office for staff that know these programs in and out and can advise on how to get the most out of them.
6. Get Paid Through Medicaid
Medicaid is often the last step in the paying-for-elder-care journey. It’s also the hardest. This hugely bureaucratic system has left many families dazed and confused after attempting to navigate it. Every state has its own Medicaid program. The qualifications are different, but generally assets can’t total over $2,000. When eligible, most long-term care needs are financially covered, a benefit making the navigation of the system worthwhile. To increase your chances of a successful eligibility process, you’ll want to consult with an elder law attorney. They can help you plan the best timing for application, smart financial considerations for protecting assets, and how to navigate the system most effectively.
Some states issue waivers that allow families to manage the care they receive, instead of letting the state dictate care. These waivers will often allow a family member to be compensated for providing care in-home.
7. Get Paid Through a State Program
Some states, not all, have programs outside of Medicaid that will pay family members for the care they provide for their loved one. These programs have been growing and hopefully more states will develop programs in the future.
The financial impacts of caregiving are real and often steep. Connecting to resources and programs to alleviate the impacts on your funds is essential. While getting paid to be a family caregiver is a difficult path to navigate now, many states are expanding the options families have to access this type of support.
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