When you’re a caregiver for a loved one, it’s emotionally draining at times, but it’s also financially draining. Around 48 million Americans provide care to a family member or friend without pay. According to an AARP report, the workload averages nearly 24 hours per week.
In 2021, another AARP study found that 78% of family caregivers regularly have to pay out-of-pocket costs, with the average expenditure topping $7,200.
A lot of family members who are caregivers don’t know that there are some options that would provide them financial relief.
Many of these programs are state-based. For example, in New York, as part of Medicaid, there is a program called CDPAP which stands for the Consumer Directed Personal Assistance Program.
Under this program, nearly any adult legally eligible to work can be a caregiver, including family and friends. This can include children who are paid to be a caregiver for their parents. There are limitations to these programs, though. For example, in the case of CDPAP, spouses can’t hire each other as paid family members.
Below are some general things to know about getting paid to take care of a family member, even if you aren’t in New York or eligible specifically for the CDPAP program.
Caring for a Disabled Child
Parents might be wondering if they can be paid to relieve the financial burdens of taking care of the disabled child. The shortest answer is yes, but it gets more complicated.
When you’re a caregiver for a child, it can mean that you aren’t able to work elsewhere. Parenting a disabled child also comes with challenges that other parents might not face.
Around 14% of the nation’s caregivers are taking care of their own children. More than 30% of caregivers have financial troubles because of the time they dedicate to it. Also, when women have to shoulder caregiving responsibilities, it increases the likelihood they would have to depend on public assistance or live at or below the poverty level.
There are agencies parents can turn to offset some of the financial burdens they deal with.
Every state is going to have its own benefits.
For example, we talked about New York above. If you’re in Minnesota, on the other hand, there’s a program called the Family Support Grant for families that qualify. This grant offers a certain amount of money per year for a child with a certified disability. Not every state has this, though.
The coverage available from Medicaid home health also varies depending on the state. For example, Medicaid doesn’t often pay for daily living assistance, especially involving a parent caring for their child.
You would have to talk to the program office in your state to determine what they might cover.
Medicaid does offer waivers for home and community-based services, known as HCBS waivers. An HCBS waiver lets the state authorize payment for services received at home for certain individuals. These individuals can include children who are technology-dependent and people with intellectual disabilities.
An HCBS waiver can be used for income adjustment and resource qualifications for Medicaid in some circumstances. These programs provide caregiver support and a daily stipend that’s tax-free.
Some families may be eligible for assistance from the Cash & Counseling program, which is available in certain states as a provision for individuals with a disability. This program provides cash for hiring and paying caregivers. Some states completely prohibit paying caregivers who are relatives, and some will allow for certain relationships and not others.
Medicaid Self-Directed Services
The Cash & Carry program is another term for a Medicaid self-directed program. With Medicaid self-directed programs, beneficiaries can decide how to spend the Medicaid budget they’re assigned for support and long-term care. This could mean hiring a family member as a caregiver.
These programs are designed to promote a sense of personal choice.
A beneficiary is authorized to decide the services they want, how they’re delivered, and who will provide them.
Cash & Counseling programs can be available through the Medicaid program of your state or through the home and community-based services waivers, as mentioned above.
The guidelines for how funds can be used depend on the funding authority and state of residence. A lot of places will let you pay a family member or friend.
The programs are designed to provide assistance in basic activities and instrumental activities of daily living.
Basic activities include eating, dressing, using the toilet, and maintaining personal hygiene.
Instrumental activities of daily living are those activities considered essential to staying independent. These can include grocery shopping, medication management, meal preparation, laundry, and transportation, among other tasks.
While the particular steps can vary depending on where you live, most of the following steps apply to the Cash & Counseling program regardless of where you are:
First, you have to apply for Medicaid in the state where you live.
Once you’re approved for Medicaid, a qualified beneficiary has to meet the eligibility requirements for the program in their state. You have to complete a separate application for these programs most of the time.
For most programs, beneficiaries have to go through an assessment to determine what their functional needs are. A relevant caregiver and a physician will usually have to give their input.
After someone’s functional needs are assessed, a care plan will be created to define the amount and type of care specifically required, including supportive equipment if needed. The care plan will also include a contingency plan for when the main worker or caretaker isn’t available.
The next phase is budget development, where the budget is tailored to the care plan based on a state-provided calculation of the expected costs.
Once there’s a formal plan, the beneficiary can hire and train a caregiver, or they can designate a representative who will perform the tasks for them.
Self-directed care programs usually allow beneficiaries to choose whoever they want as a caregiver, including a family member or friend. Some states do have requirements that have to be met before hiring, including things like background checks, licensing or registration as a personal care assistant, or specialized caregiver training.
Some states, as mentioned, might exclude legal guardians or spouses or will only provide payment to a caregiver who lives at a different address than the beneficiary.
The average pay for caregivers through Cash & Counseling programs depends on the particular program and state.
Tax Credits and Deductions
Another path to be reimbursed or paid for the expenses of being a caregiver can come through credits and deductions available on your taxes.
One option is to take advantage of the Medical Expenses Deduction. If you’re caring for someone who is your dependent or spouse, you can deduct qualifying medical expenses that are more than 7.5% of your income. This can include money that goes toward diagnosing, treating, or preventing diseases. It can reduce your tax burden and be financially beneficial.
If you pay for the care of a family member who qualifies while you are working or while you are looking for work, you can get a credit equal to your expenses through the Child and Dependent Care Credit. To qualify, your gross income has to be less than $438,000.
If a qualifying taxpayer is at least 65 and is retired on permanent and total disability, and receives taxable disability income, there are tax credits ranging from $3,750 to $7,500.
If your child or someone else in your family is a veteran, you might be eligible for caregiver assistance programs through the VA.
For example, the Program of Comprehensive Assistance for Family Caregivers (PCAFC) requires that you complete VA Form 10-10 CG. This is the Joint Application for the Program of Comprehensive Assistance for Family Caregivers.
Under this program, veterans can appoint a primary family caregiver and then up to two secondary family caregivers. The individuals designated as family caregivers are eligible to receive a variety of benefits, including caregiving training, a monthly stipend, mental health counseling, and health care benefits.
A veteran must have a disability rating with the VA of at least 70%, which can be individual or combined.
The disabilities must have been caused or worsened during active duty during certain periods, and the veteran has to have been discharged from the U.S. military or have a medical discharge. It’s also required that the veteran need a minimum of six months of in-person, ongoing personal care services.
A caregiver is required to be a family member living with the veteran full-time, who’s at least 18.
Finally, another way to cover long-term care costs is through long-term care insurance or LTC. This coverage will often take over some of the costs of care excluded from private insurance and Medicare. The costs can include personal care services, and you could be paid as a caregiver. Some policies don’t cover caregivers who live with the person, though, so you’ll need to verify your coverage with your insurance provider.