How to get paid to be a caregiver for parents

Elderly couple smiling

How To Get Paid To Be A Caregiver For Parents

It is common for adult children to wonder if they can be compensated for the countless hours they spend caring for their parents. Those caring for family members with Alzheimer’s or another form of dementia find this especially true. It is possible in the short answer, but unfortunately, it is insufficient since the subject is complex. Many variables determine whether a loved one in need of care is eligible for assistance, and many people forget to ask whether they, too, are qualified as caregivers.

Throughout the following article, we examine the many different ways family members can get paid as caregivers. It is a lengthy discussion, and many of the programs are not relevant to the reader based on various eligibility criteria, such as veteran status, income, or state of residence. You can also utilize our Homecare cost chart. Readers are asked to fill out a series of questions, and a list of relevant programs is provided to them according to their family’s needs.

Helpful Resources

Medicaid Options

Medicare is the most common type of reimbursement for family members who serve as caregivers. Medicaid has eligibility requirements for program participants as well as rules concerning who may provide care to them. While Medicaid has historically been thought of as paying for nursing home care, today’s Medicaid programs offer assistance options outside nursing homes, such as at home or in the beneficiary’s primary residence. In this section, we have identified four different Medicaid programs/options for paying family caregivers. Unfortunately, not all of these options are available in every state, but at least one is.

HCBS Waivers and 1915(c) Waivers

First and foremost, Medicaid waivers are available. In addition to “HCBS waivers,” or home and community-based services waivers, there are “1915(c) waivers, which can sometimes be referred to as Section 1115 waivers. With waivers, states can pay for services and care for people living outside of nursing homes. They usually cover services such as personal care (assistance with activities of daily living, like eating, dressing, and mobility) and chore services for elderly or disabled persons who live in their own homes or the homes of family members.

Medicaid Waivers in many states have a provision called “Consumer Direction.” The consumer direction method refers to the process where the beneficiary (the “consumer” or the “care recipient”) selects or directs the personal care providers themselves. In this option, the older adult can choose family members to care for them, such as an adult child, and the Medicaid program will compensate the adult child for the care they provide. A caregiver is generally paid anywhere between $9.00 and $19.25 per hour (depending on the Medicaid approved rate).

Even though the phrase “consumer direction” is not used in all states, it is a concept that exists in every state. Alternative terms used to describe this concept include Participant Directed Services, Self-Directed Care, Cash and Counseling, Choice Programs, and Self-Administered Services, depending on one’s state.

As an alternative to nursing home care, waivers offer different names, eligibility requirements, and benefits in each state. Unlike nursing home Medicaid, waivers are not entitlements. The number of people who can enroll in the program is limited, and there is usually a waiting list. You can access a complete list of waivers that allow family members to be paid as caregivers here.

Medicaid Personal Care Services

Many state Medicaid programs cover personal care through their regular Medicaid program, sometimes referred to as their “Medicaid State Plan.” As opposed to waivers, traditional Medicaid is an entitlement program; if an applicant meets the eligibility requirements, they can receive benefits. There are no waiting lists. It is important to note that some states choose to offer personal care services in the home and community through their state plan, known as Community First Choice (CFC).

Like Waivers, State Plan Personal Care lets beneficiaries choose their care provider. Family members, including adult children, can provide care for their elderly or disabled parents. Caretakers receive the Medicaid-approved hourly rate for their efforts. The older adult is assessed during the initial enrollment process, and the number of hours of care they need each week is determined. Please find a list of state Medicaid programs that offer choices in their personal care benefit here. These programs are known under different names, including Personal Assistance Services (PAS), Personal Care Assistance (PCA), Attendant Care, and Personal Attendants. Many states do not make a point to distinguish this option as a separate program. They refer to it as the personal care benefit under their regular Medicaid program.

Medicaid Caregiver Exemption

Caregiver Exemptions, or Child Caregiver Exceptions, do not directly pay adult children hourly for caregiving tasks but instead compensate them indirectly. For a better understanding of this option, some background information on Medicaid eligibility is necessary. A person’s income and assets primarily determine Medicaid eligibility. An individual’s home is considered an exempt asset if the Medicaid participant occupies it. However, If a person moves from their home (for example, to a nursing home), their home will no longer be considered an exempt asset (unless their spouse lives there or the Medicaid recipient intends to return home). Under the Caregiver Exemption, an adult child who provides care for their elderly parent in their home can inherit the house, rather than the state taking it under the Estate Recovery rules. There are, however, additional requirements. It must be at least two years since the adult child has lived with their parent. Medical documentation must demonstrate that the level of care prevents their parent from being placed in a nursing home.

The amount of compensation received depends on the home’s value and their parents’ equity in the house.

The Caregiver Exemption is complicated, so it is strongly recommended that families plan for this option in advance to avoid any potential conflicts with Medicaid and other family members.

Adult Foster Care

Only in a limited number of states does Medicaid allow adult children to provide adult foster care for their aging parents. Elderly parents move into the homes of their adult children. The child/caregiver is responsible for providing personal care, assistance with daily living activities, meals, and transportation to medical appointments. Medicaid will continue to cover the elderly parent’s prescriptions and medical care. Consequently, Medicaid compensates the adult children for the care services they provide, but not for room and board. Medicaid cannot pay for room and board by law. However, most states do provide Medicaid beneficiaries who live in adult foster homes with supplemental financial assistance from state funds to help cover room and board costs. In summary, the adult children caregivers will be compensated from Medicaid and their state’s supplemental program. Depending on the level of care required by their aging parent and their condition, caregivers are estimated to receive between $1,550 and $2,550 per month. 

Programs for Veterans

Veterans Directed Home and Community Based Services

The Veterans Directed Care program is abbreviated as VD-HCBS or informally as Veterans Directed Care. The program is open to any veteran enrolled in VA health care who requires nursing home care. Veterans can choose from whom they receive care services under Veterans Directed Care. Those with specific needs may require personal care or personal care attendants. Veterans can hire whoever they choose, such as their adult children, to provide personal care services through this program.

Hourly rates are paid to adult-child caregivers. Veteran Health Administration calculates this rate annually and modifies it for regional differences in the cost of home care. It is difficult to predict what caregivers will receive since each veteran is assessed for a different amount of assistance. Caregivers can expect to be compensated between $8.44 and $20.00 per hour. This program is run at the local level through participating VA Medical Centers. 

Veteran’s Aid & Attendance and Housebound Pensions

A veterans’ pension, also known as the Aid & Attendance and Housebound benefits, is designed explicitly for wartime veterans and their spouses. However, how it can be used to pay for parents’ care can be a little confusing. Understanding that a veteran’s or their spouse’s pension is calculated based on their current, non-pension income is significant. Another critical factor for determining a beneficiary’s pay is that the Department of Veterans Affairs will deduct all care-related expenses. It can include the cost of personal care assistance provided by a private caregiver or a home health care agency. In this case, the aging parent can hire an adult child to provide remote care. The adult child sends invoices to their parent for their caregiving services, expenses are subtracted from the parent’s income, and VA increases the pension check by the invoices. While this approach seems confusing and backward, it is documented, legal, and recommended by many VA benefits experts.  

Other Options

State-Based, Non-Medicaid Programs

The Consumer Direction concept (discussed under Medicaid) is not limited to Medicaid programs. Most states offer what is loosely referred to as nursing home diversion programs. In these programs, state funding supports elderly individuals who live at home to prevent unnecessary placements in Medicaid-funded nursing homes. The consumer can direct care services in some of these state programs. Essentially, program participants can choose their caregivers. This lets participants choose to receive care services and assistance from their adult children instead of working with a state-designated caregiver or home care agency. Caregiver rates are comparable with the hourly rates for home care in their local area. Unfortunately, these programs are unavailable in all states, and some allow for consumer direction but not family members to be hired. In addition, many of these programs are means-tested (financial resources of the applicant determine eligibility). 

Life Insurance

Those with life insurance policies worth over $50,000 can use those policies to pay for care by family members. The process is complicated, as it is with many of the programs in this article. Policyholders enter into a life settlement. A life settlement is when a policyholder sells their life insurance policy to a third party while they are still alive. After paying the policyholder a lump sum, the buyer proceeds to pay the monthly premiums. When the policyholder dies, they collect the total death benefit amount. This approach provides an original policyholder with a lump sum of cash while they are alive. This money can be used to pay a family member directly for care. However, a better option exists in the form of a Medicaid Life Settlement, which preserves the policyholder’s eligibility to receive Medicaid in the future, should the proceeds from their life settlement run out. You can read more about this strategy and its pros & cons here.

Long Term Care Insurance

Elderly individuals with long-term care insurance may use the benefit to pay their children for their care. Each policy is different, and some expressly prohibit family members from being compensated. However, these rules are relatively rare. More common are the long-term care insurance policies that require caregivers to be licensed. This does not prevent the family members of the policyholder from being paid to provide care. However, the adult child must obtain a business license so that they can act as a care provider, as well as register with their local authorities. While this process may sound complicated, it is a relatively straightforward and quick one. Their responsibility is to declare their payment as income and pay taxes as they would for any other income.

Paid Family Leave Laws

In the US, Paid Family Leave (PFL) allows working individuals to take time off their jobs (or take non-consecutive days off) so that they can care for an aging parent, spouse, or child. However, this article is most relevant to those taking care of aging parents. In addition to receiving a large percentage of their salary, caregivers are legally protected from losing their jobs and health insurance.

Typically, parents are paid for 4 – 12 weeks during which their adult children leave, so this is not a permanent solution for most families. However, the paid leave does not have to be taken consecutively. As an alternative, the caregiver-child could take one day off for many months. Furthermore, several siblings can take paid family leave simultaneously if they all live within the same state, which, when combined, can make a significant impact on helping an aging parent.

Paid family leave laws vary from state to state. They should not be confused with the national Family and Medical Leave Act (FMLA), which allows family members to take time off to care for loved ones and protects their health insurance plans but does not offer compensation.

Tax Deductions and Credits

While tax deductions and tax credits do not directly pay adult children for caring for elderly parents, they can significantly reduce their tax burden. As a result of their caregiving efforts, they have more money available to them. Their medical and care expenses can be deducted from their incomes for those whose parents are financially dependent on them. Dependent Care Credit is also an option, which is highly relevant for people paying to care for their elderly parents to continue working. Expenses such as home care or adult day care are, in most cases, fully deductible.

Conclusion

When loved ones can no longer care for themselves, it can be challenging to know where to turn. If you’re looking for information about the various programs and resources available in PA county, we have you covered! Here at Lindas Care Home Care, we work with veterans and those who are housebound due to physical disability or age. We hope this blog post has helped answer any questions you might have had about your situation. If you would like Linda’s Care to future assist you with getting you paid to care for your loved ones, please get in touch with us today by phone at 215-383-5494  or fill out a free home care consultation here.

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