Get Paid To Take Care Of Family Member: Navigating Compensation Options for Caregivers

More than 53 million Americans are family caregivers, with over 34 million caring for adults aged 50 and above. For many, this support feels like an act of love. However, the value of family caregiving is immense, extending far beyond emotional support. Unpaid family caregivers save health systems and insurance providers billions annually by preventing hospitalizations and emergency room visits. They also contribute to the pharmaceutical industry by ensuring medication adherence and free up healthcare resources for others in need.

AARP estimates the collective contribution of family caregivers to be over $600 billion per year, calculated based on the hours of care provided and the average hourly pay for professional home care. Despite this significant contribution, very few family caregivers receive financial compensation for their crucial work.

In fact, approximately 40% of family caregivers reduce their working hours or leave their jobs entirely to manage caregiving responsibilities. This leads to lost income, diminished retirement savings through missed 401(k) and Social Security contributions, and financial strain from out-of-pocket caregiving expenses, which average around $7,200 per year.

This financial burden is unsustainable for families and the public health system. Fortunately, various programs and initiatives are emerging to address this issue. It’s important for family caregivers to understand the existing compensation opportunities available to them. This article will explore how you can get paid to take care of a family member through different avenues, including government programs, insurance policies, and personal agreements.

How to Get Paid Through Medicaid Programs

Understanding Medicaid

Medicaid is a government-funded program providing healthcare coverage to eligible Americans. Each state manages its own Medicaid program, resulting in variations in eligibility criteria, regulations, and benefits. However, all state programs must adhere to federal Medicaid guidelines. Crucially, some state Medicaid programs offer financial compensation to family members who provide care to eligible individuals.

Medicaid Eligibility for Care Recipients

To be eligible for Medicaid, adults over 65 and individuals with disabilities must meet specific income requirements, which vary by state. For Medicaid Home and Community Based Services or Medicaid Waivers, the monthly income limits in 2024 ranged from approximately $914 to $2,742. Furthermore, individuals with savings or investments may need to spend down these assets on healthcare expenses to qualify for Medicaid long-term care coverage.

Medicaid Payment Options for Family Caregivers

Medicaid Personal Care Services (PCS): This benefit covers assistance with Activities of Daily Living (ADLs) such as bathing, dressing, and meal preparation. PCS requires a physician’s order, a documented care plan, and nurse supervision. Many states allow Medicaid to pay family members who provide PCS to their loved ones.
Medicaid Home and Community-Based Services (HCBS) 1915(c) Waivers: These waivers enable states to fund long-term care services in home and community settings as alternatives to nursing homes. This allows coverage for individuals needing nursing home-level care but who can remain at home with support. Services covered under HCBS waivers can include personal care, adult day health, and respite care. Many states with HCBS Waivers permit payment to family members for providing personal care. You can check the State Waivers List on Medicaid.gov to see if your state participates.

How Medicaid Caregiver Payment Works

Many states offer “consumer-directed” or “self-directed” care options within their Medicaid programs. These options allow Medicaid recipients to hire family members as paid caregivers for Personal Care Services. These programs are known by various names, such as Consumer-Directed Personal Assistance Services, Cash & Counseling, and Self-Directed Services.

Family caregivers typically need to meet state-specific training or certification requirements, often including background checks. Pay rates for family caregivers are usually aligned with the average rates for home care aides in the respective state, generally ranging from $13 to $18 or more per hour.

Steps to Become a Paid Family Caregiver Through Medicaid

The process to become a paid family caregiver through Medicaid varies by state, but generally involves these steps:

Determine Medicaid Eligibility and Family Caregiver Payment: Contact your state’s Medicaid program to confirm if your family member is eligible for Medicaid and if the state program allows payment to family caregivers. You can find contact information on the Medicaid website.
Enroll Family Member in Medicaid: If both conditions are met, work with the state Medicaid office to enroll your family member. This process may take several weeks to months.
Apply for Self-Directed Care Benefit: Collaborate with the state Medicaid office to complete the necessary paperwork for the self-directed care benefit, including obtaining a physician’s order for Personal Care Services for your family member.
Complete Training and Certification: Fulfill any required training and certification process as mandated by your state.

VA Programs for Paid Family Caregivers

Overview of the Department of Veterans Affairs (VA)

The VA is a federal agency dedicated to providing benefits and services to veterans and their families. The VA offers a wide range of support, including healthcare, education, disability compensation, and more, through its medical centers and clinics.

Currently, the VA offers four programs that provide financial compensation to family members caring for older or disabled veterans or their surviving spouses:

Aid and Attendance Pension Benefit (A&A)
Housebound Pension Benefit
Program of Comprehensive Assistance for Family Caregivers (PCAFC)
Veteran Directed Care (VDC)

VA Payment Options for Family Caregivers

Aid and Attendance Pension Benefit (A&A)

Eligibility: Veterans or surviving spouses eligible for the basic VA pension or survivor pension can qualify for A&A if they need help with ADLs or have Alzheimer’s disease.
How it Works: A&A provides a monthly cash allowance to the veteran or surviving spouse, which they can use at their discretion, including paying certain family members (excluding spouses) for in-home care.

Housebound Pension Benefit

Eligibility: Veterans or surviving spouses eligible for the basic VA pension or survivor pension may qualify if they are permanently disabled and unable to leave their homes.
How it Works: This benefit provides a cash payment that can be used to hire a friend or relative (excluding a spouse) for in-home care.

Program of Comprehensive Assistance for Family Caregivers (PCAFC)

Eligibility: Veterans with a VA disability rating of at least 70% due to a critical injury or illness incurred in the line of duty, who require at least six months of personal care services, may be eligible.
How it Works: PCAFC provides monthly cash benefits to family caregivers, along with access to education, training, counseling, and respite care.

Veteran Directed Care (VDC)

Eligibility: Veterans enrolled in VA medical benefits who need skilled services and ADL assistance may qualify.
How it Works: VDC provides a monthly budget (not direct cash) to veterans to manage their care needs, including hiring a caregiver (adult child, grandchild, spouse, or other relative) or purchasing medical equipment. A service organization manages the budget and pays the caregiver or supplier. VDC is available in 43 states, Washington DC, and Puerto Rico, with expansion ongoing. Contact your local Area Agency on Aging for program availability in your area.

Steps to Become a Paid Family Caregiver Through the VA

Navigating VA programs can be complex. Organizations like the Elizabeth Dole Foundation and the American Legion (202-263-5759) offer support to military caregivers seeking VA benefits.

Paid Family Leave for Caregiving

Understanding Paid Family Leave

Paid family leave laws build upon the federal Family Medical and Leave Act (FMLA), which provides job-protected, unpaid leave. State-based paid family leave programs offer workers partial or full income replacement when they need to take time off work 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 set to implement programs in 2025 and 2026.

Additionally, some employers offer their own paid family leave policies. Check with your HR department about your employee benefits, regardless of your state’s paid family leave status.

Paid Family Leave Eligibility

Each state with paid family leave sets its own rules regarding eligibility, wage replacement amounts, leave duration, and the definition of “family member.” Resources are available online, such as RubyWell’s guide to paid family leave, where you can find specific details for your state.

How Paid Family Leave Works

Paid family leave operates differently depending on the state. Some states automatically provide eligibility to employees working for participating employers, often those meeting federal FMLA requirements (public employers and private employers with 50+ employees). Other states offer voluntary state paid leave insurance programs, allowing more individuals, including those working for smaller employers or who are self-employed, to buy into coverage.

Steps to Access Paid Family Leave as a Caregiver

To access paid family leave, follow these general steps, while also adhering to your state and employer-specific requirements:

Notify Employer: Inform your employer about your need for family leave.
Obtain Medical Certification: Ask your family member’s healthcare provider to provide written certification of their health condition and care needs.
Complete Employer Forms: Your employer will provide forms to complete and return.
State Application (If Applicable): Your state may have an online portal for paid family leave applications.
Provide Advance Notice: If possible, give your employer at least 30 days’ notice before your leave begins. If not, notify them as soon as possible.

Long-Term Care Insurance (LTCI) and Family Caregivers

What is Long-Term Care Insurance?

Long-term care insurance (LTCI) is private insurance that can cover various long-term care services, including nursing home care, in-home care, and assisted living. LTCI offers more flexibility than government programs like Medicaid, which have strict financial limitations.

LTCI Eligibility for Family Caregiver Payment

Unfortunately, only about 3% of adults over 50 have LTCI, often due to cost and lack of awareness. While some LTCI policies only cover facility-based care, others cover in-home care, and a portion of those will pay family members (informal caregivers).

If your family member has an LTCI policy that covers in-home care and pays informal caregivers, you may be eligible for compensation. The policy will likely have benefit eligibility criteria, such as needing assistance with a certain number of ADLs or having cognitive impairment.

How LTCI Payments Work

LTCI policies may offer two payment methods:

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

Steps to Get Paid Through Long-Term Care Insurance

Confirm LTCI Coverage: Verify that your family member’s LTCI policy covers in-home care and pays informal caregivers.
Initiate a Claim: Start a claim with the insurance company.
Assessment and Care Plan: The insurer may require an assessment and care plan detailing the care needed.
Elimination Period: Understand and complete the “elimination period” (similar to a deductible) before payments begin.
Claim Payments: After the elimination period, begin claiming payments from the LTCI provider.
For further guidance, consult RubyWell’s resource on long-term care insurance and family caregivers.

Personal Care Agreements for Family Caregivers

What is a Personal Care Agreement?

A personal care agreement is a legally binding contract between a care recipient and their family caregiver. It outlines the caregiver’s responsibilities and compensation. This document is particularly useful for Medicaid planning, as it provides proof of asset spend-down on healthcare, potentially preventing Medicaid from requiring repayment for care costs later.

Eligibility for Personal Care Agreements

Any family can establish a personal care agreement if they have the financial means and desire to compensate a family caregiver.

How Personal Care Agreements Work

The agreement details the caregiver’s duties, responsibilities, and compensation, based on local professional caregiver rates. Once in place, the care recipient can pay the family caregiver according to the agreed-upon schedule.

Steps to Create a Personal Care Agreement

Family Discussion: Discuss the personal care agreement option with your family.
Research Caregiver Rates: Determine the average hourly rate for in-home caregivers in your area.
Legal Consultation: Consult with an elder law attorney to draft the agreement.
Record Keeping: Maintain detailed records of care hours, expenses, and payments received.

Compensation Gaps and Future Solutions

While the options discussed provide pathways to compensation for some family caregivers, many still fall outside these categories. These options often cater to:

Caregivers of low-income individuals eligible for government assistance.
Caregivers of those who can afford LTCI or out-of-pocket payments.
Caregivers of some veterans.
Caregivers in states with paid family leave who can maintain employment alongside caregiving (limited to leave duration).

Many caregivers are excluded from these options. However, organizations like RubyWell are innovating to address the care crisis. Continued advocacy is needed to encourage policy changes at the state and federal levels to expand access to solutions for all family caregivers.

FAQ: Getting Paid as a Family Caregiver

How much do family caregivers get paid?

Pay rates vary based on the payer, program, and state. Compensation is typically based on local rates for paid caregivers.

To find local rates:

Contact home care agencies in your area to inquire about hourly rates for in-home caregivers.
Refer to resources like Care.com’s caregiver salary guide by state for average hourly and monthly rates.

Are there tax benefits for paid family caregivers?

Yes, several tax benefits are available:

Credit for Other Dependents: Potentially save up to $500.
Medical Expense Deduction: Deduct unreimbursed medical expenses exceeding 7.5% of adjusted gross income, including home healthcare and adult day care.
Head of Household Filing Status: Possible if you meet specific requirements, such as paying over half of household expenses.
Child and Dependent Care Credit: Reimburses up to $3,000 for care expenses while you work, even if the care recipient isn’t your dependent but lives with you and cannot care for themselves.

Refer to Money Saving Tips for Family Caregivers for detailed information on these tax credits.

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. However, government-funded programs and LTCI policies often mandate training or certification.

Regardless of requirements, training can enhance caregiver confidence and skills. Consult your family member’s healthcare provider about caregiver training opportunities. A new Medicare rule in 2024 allows eligible providers to offer paid training to family caregivers.

Sources

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