What Programs Pay Family Members to Be Caregivers?

More than 53 million Americans are family caregivers, with over 34 million of them caring for adults aged 50 and above. Many see their caregiving as an act of love, yet its value is undeniable. Beyond the benefits to loved ones, family caregiving saves healthcare systems and insurers billions annually by keeping older adults out of hospitals and emergency rooms. Caregivers improve pharmaceutical profits by ensuring medication adherence and free up healthcare resources for others.

AARP estimates the collective value of unpaid family caregiving at over $600 billion per year, based on professional home care hourly rates. Despite this enormous contribution, few family caregivers receive financial compensation.

Approximately 40% of family caregivers reduce their work hours or leave their jobs entirely to provide care, resulting in lost income and reduced retirement savings. Many caregivers deplete their savings and accrue debt to cover roughly $7,200 in annual out-of-pocket caregiving costs.

This situation is unsustainable for families and public health systems alike. Fortunately, organizations are working on solutions, and some compensation opportunities are already available.

Getting Paid Through Medicaid

Understanding Medicaid

Medicaid is a government program providing healthcare coverage to eligible Americans. Each state manages its own Medicaid program with specific rules and benefits, while adhering to federal guidelines. Some state Medicaid programs offer payment to family members who care for eligible individuals.

Medicaid Eligibility

Adults over 65 and those with disabilities may qualify for Medicaid based on income limits, which vary by state, ranging from about $914 to $2,742 monthly in 2024 for Home and Community Based Services or Medicaid Waivers. Applicants may also need to spend down assets on healthcare to qualify for long-term care coverage.

Medicaid Payment Options for Family Caregivers

• Medicaid Personal Care Services (PCS): This benefit covers assistance with daily living activities (ADLs) like bathing, dressing, and meal preparation. Services must be doctor-ordered, based on a care plan, and nurse-supervised. Many states allow family members to be paid as PCS providers.

• Medicaid Home and Community-Based Services (HCBS) 1915(c) Waivers: These waivers enable states to fund long-term care at home rather than in nursing homes. Services can include personal care, adult day health, and respite care, aiming to prevent institutionalization. Many states with HCBS Waivers permit family members to be paid for personal care. The Medicaid.gov State Waivers List provides state-specific information.

How Medicaid Caregiver Payments Work

Many states offer “consumer-directed” or “self-directed” care options within Medicaid, allowing eligible individuals to hire family members for Personal Care Services. Program names vary, including Consumer-Directed Personal Assistance Services, Cash & Counseling, and Self-Directed Services.

Family caregivers typically need to meet state-specific training or certification requirements, including background checks. Pay rates are usually based on local home care aide rates, ranging from approximately $13 to $18+ per hour.

Steps to Become a Paid Family Caregiver Through Medicaid

1. Medicaid Eligibility Check: Determine if your loved one is Medicaid eligible and if the state Medicaid program pays family caregivers. Contact the state Medicaid program for information.
2. Medicaid Enrollment: If eligible and payments are offered, work with the state Medicaid office to enroll your family member, which may take a few months.
3. Self-Directed Care Application: Complete required paperwork for the self-directed care benefit, including a doctor’s order for Personal Care Services.
4. Training and Certification: Fulfill any state-mandated training and certification requirements.

Getting Paid Through the U.S. Department of Veterans Affairs (VA)

Understanding the VA

The VA is a federal agency supporting veterans and their families with various benefits, including healthcare, education, and disability compensation. The VA offers several programs that compensate family members caring for older or disabled veterans or surviving spouses.

VA Payment Options for Family Caregivers

• Aid and Attendance Pension Benefit (A&A):

  • Eligibility: Veterans or surviving spouses eligible for a basic VA pension who need help with ADLs or have Alzheimer’s disease may qualify.
  • How it Works: A monthly cash allowance is provided to the veteran or surviving spouse, usable at their discretion, including to pay certain family members for in-home care (spouses cannot be paid under this program).

• Housebound Pension Benefit:

  • Eligibility: Veterans or surviving spouses eligible for a basic VA pension who are permanently housebound due to disability may qualify.
  • How it Works: Provides a cash benefit for hiring a non-spouse friend or relative for in-home care.

• Program of Comprehensive Assistance for Family Caregivers (PCAFC):

  • Eligibility: Veterans with a 70%+ VA disability rating due to a service-related critical injury or illness, requiring at least six months of personal care due to ADL limitations or supervision needs, and enrolled in VA healthcare.
  • How it Works: Family caregivers receive monthly cash benefits, education, training, counseling, and up to 30 days of annual respite care.

• Veteran Directed Care (VDC):

  • Eligibility: Veterans enrolled in VA medical benefits who need skilled services and ADL assistance.
  • How it Works: Veterans receive a monthly budget (not direct cash) to manage their care, including hiring family caregivers (adult child, grandchild, spouse, or relative) or purchasing equipment. A service manages the budget and pays caregivers. This pilot program is available in most states; check with the local Area Agency on Aging (AAA) for availability in your region.

Steps to Become a Paid Family Caregiver Through the VA

Navigating VA benefits can be complex. Organizations like the Elizabeth Dole Foundation and the American Legion offer assistance to military caregivers seeking VA benefits.

Getting Compensated by Paid Family Leave

Understanding Paid Family Leave

Paid family leave laws build upon the federal Family Medical and Leave Act (FMLA), which offers unpaid, job-protected leave. State paid family leave programs provide partial or full income replacement for workers who need to take time off to care for a family member with a serious health condition. Currently, 11 states and Washington, DC have paid family leave laws, with four more states joining soon.

Some employers also offer their own paid family leave policies. Check with your HR department about your employee benefits.

Paid Family Leave Eligibility

Each state sets its own eligibility criteria, wage replacement amounts, leave duration, and definition of “family member.” Online resources detail state-specific family leave laws.

How Paid Family Leave Works

Paid family leave varies by state. In some states, eligibility is automatic for employees of participating employers (often those meeting FMLA requirements: 50+ employees, employee worked for at least a year and 1,250 hours in the past 12 months).

Other states offer voluntary state paid leave insurance programs, allowing more people, including those working for smaller employers or self-employed individuals, to purchase coverage.

Steps to Become a Paid Family Caregiver Through Paid Family Leave

1. Eligibility Confirmation: Determine your eligibility for paid family leave based on state and/or employer policies.
2. Employer Notification: Inform your employer of your need for leave.
3. Medical Certification: Obtain written certification from your loved one’s healthcare provider detailing their health condition and need for care.
4. Application Submission: Complete and submit required forms to your employer and/or state paid family leave application website.
5. Advance Notice: Provide at least 30 days’ notice if leave is planned, or as soon as possible if unexpected.

Getting Paid Through Long-Term Care Insurance (LTCI)

Understanding Long-Term Care Insurance

Long-term care insurance (LTCI) is private insurance covering costs associated with long-term care needs, such as nursing homes, home healthcare, and assisted living. It offers more flexibility than government programs like Medicaid but has a lower uptake due to cost and awareness.

LTCI Eligibility for Family Caregiver Payments

Only about 3% of adults over 50 have LTCI. Some LTCI policies cover only facility-based care, while others cover in-home care, and a subset of these pay “informal caregivers” (family members).

If your loved one has an LTCI policy that covers informal caregivers, you may be eligible for payment if the policyholder meets benefit eligibility criteria, such as needing help with a certain number of ADLs or having cognitive impairment.

How LTCI Payments Work

LTCI payments can be structured in two ways:

1. Cash Payments: The insurance company sends the monthly benefit directly to the policyholder, who can then pay the family caregiver.
2. Reimbursement: Caregivers submit invoices or care documentation, and the insurance company reimburses the policyholder for covered costs.

Steps to Become a Paid Family Caregiver Through LTCI

1. Policy Review: Confirm that the LTCI policy covers “informal caregivers.”
2. Claim Initiation: Initiate a claim with the insurance company.
3. Assessment/Care Plan: The insurer may require a care plan detailing care needs.
4. Elimination Period: An “elimination period” (similar to a deductible) must be met before payments begin.
5. Payment Claims: After the elimination period, begin claiming payments from the LTCI provider.

Getting Paid Through a Personal Care Agreement

Understanding Personal Care Agreements

A personal care agreement is a legal contract designating a family member as a paid caregiver. This document is particularly useful for Medicaid planning, as it provides proof of asset spend-down on healthcare services. Without documentation, payments to family members may be considered gifts by Medicaid, affecting eligibility.

Personal Care Agreement Eligibility

Any family can establish a personal care agreement if they wish to compensate a family caregiver.

How Personal Care Agreements Work

The agreement outlines caregiver duties, responsibilities, and compensation based on local professional care rates. Once in place, the care recipient can pay the caregiver according to the agreed schedule.

Steps to Become a Paid Family Caregiver Through a Personal Care Agreement

1. Family Discussion: Discuss the personal care agreement option with family members.
2. Rate Research: Research local in-home caregiver rates to determine a fair hourly rate.
3. Legal Drafting: Consult with an elder law attorney to draft the agreement.
4. Record Keeping: Maintain detailed records of care hours, expenses, and payments received.

Compensation Limitations and Future Directions

Current payment options for family caregivers are often limited to specific groups:

• Those caring for low-income individuals eligible for government assistance.
• Families who can afford LTCI or out-of-pocket payments.
• Caregivers of certain veterans.
• Caregivers in states with paid family leave (limited duration).

Many family caregivers do not fit into these categories. However, companies like RubyWell are innovating to address this care crisis, and advocacy is crucial to expand access to solutions for all family caregivers through policy changes.

FAQ

How Much Do Family Member Caregivers Get Paid?

Compensation varies by program, payer, and location, typically based on local paid caregiver rates.

To find local rates:

1. Contact home care agencies in your area for hourly rate information.
2. Refer to resources like Care.com for average in-home caregiver salaries by state.

Are There Tax Benefits for Paid Family Caregivers?

Yes, several tax benefits exist:

• Credit for Other Dependents: Up to $500 savings.
• Medical Expense Deduction: Deductible unreimbursed medical expenses exceeding 7.5% of adjusted gross income.
• Head of Household Filing Status: Possible for eligible caregivers.
• Child and Dependent Care Credit: Reimbursement up to $3,000 for care expenses while working, even if the care recipient is not a dependent but lives with you and is unable to care for themselves.

Consult resources like “Money Saving Tips for Family Caregivers” for details.

Are There Training Requirements for Paid Family Caregivers?

Training requirements depend on the payer, program, and state. Personal care agreements and paid family leave typically don’t require training. Government programs and LTCI policies often mandate training or certification.

Regardless of requirements, training can enhance caregiver confidence and skills. Healthcare providers may offer family caregiver training, with Medicare now covering training for family caregivers offered by eligible providers.

Sources

1. National Alliance for Caregiving and AARP. Caregiving in the U.S. Found on the internet at: https://www.caregiver.org/resource/caregiver-statistics-demographics/
2. AARP. Valuing the Invaluable 2023 Update: Strengthening Supports for Family Caregivers. Found on the internet at: https://www.aarp.org/pri/topics/ltss/family-caregiving/valuing-the-invaluable-2015-update/
3. Family Caregiver Alliance. Caregiver Statistics: Work and Caregiving. Found on the internet at https://www.caregiver.org/resource/caregiver-statistics-work-and-caregiving/
4. AARP. Family Caregivers Spend More Than $7,200 a Year on Out-of-Pocket Costs. Found on the internet at https://www.aarp.org/caregiving/financial-legal/info-2021/high-out-of-pocket-costs.html
5. Care.com. Here’s the average monthly in-home caregiver salary in every state. Found on the internet at: https://www.care.com/c/average-in-home-caregiver-salary-by-state/
6. JRC Insurance Group. Long-Term Care Statistics 2022. Found on the internet at: https://www.jrcinsurancegroup.com/long-term-care-statistics/