Can Family Members Be Paid Caregivers?

caregiving.com

Can Family Members Be Paid Caregivers?

caregiving.com

The number one question family caregivers ask about caregiving is “can a family member get paid to be a caregiver?” In fact, this question and related questions are searched for more than 4,000 times per month. 


This may seem like a large number, but the number of caregivers in the United States is growing everyday. Today, more than one in five Americans are caregivers. And, according to AARP, 53 million of those caregivers provide care unpaid for an average of 24 hours per week. This unpaid role can create financial burdens for many family caregivers. In fact, 23% of family caregivers say they have increased their debt since they started caregiving. 


If you are a family caregiver and need financial assistance we’re here to help. Below we have outlined three primary ways family caregivers can be paid through either Medicaid, a family member, or even long-term care insurance. 


How family caregivers can be paid through Medicaid.

Every state offers a Medicaid plan, but it could be called by different names in each state. For example, in California Medicaid is called Medi-Cal, in Massachusetts it’s called MassHealth, and in Missouri it’s called MO HealthNet. All state Medicaid plans are entitlement programs which means anyone who is eligible can receive services.


Personal care services are available through many states’ Medicaid plans, and a lot of these plans allow program participants to self-direct their care. Self-direction allows Medicaid recipients to hire, manage, and even fire the caregiver of their choice. This means that relatives and friends can become paid caregivers through many state Medicaid plans.


In addition to being paid through Medicaid, there are other Medicaid benefits family caregivers may be able to receive. While not specifically a Medicaid program, the caretaker child exception is a Medicaid exemption that allows an adult child to be paid for providing care for an aging parent. This exemption allows the parent’s home to be transferred to the adult child as a form of payment. To do this, the adult child must have lived with their parent for at least two years prior to a senior living placement. In addition, the adult child must have provided care that delayed the parent’s need to move into a senior living facility.


When considering this option, it is imperative the house transfer is done correctly and all requirements are met. To ensure this is done correctly, we recommend hiring a Medicaid planner. A Medicaid planner can help you navigate the intricacies that come with the caretaker child exemption.  


Read more: Understand the difference between Medicare and Medicaid


How family caregivers can be paid through a family member.

If the family member you are caring for is of sound mind and has the financial resources to pay a caregiver, you can be paid by the family member. If you and your loved one are considering this option, we recommend being proactive and setting up strict ground rules before this arrangement begins. 


Here is a list of things to do before you enter this paid caregiving agreement:


Have the difficult conversations up front.

Talk about hourly rate, paid time off, health risks, schedules, and how respite care or sick days will be managed.


Put together a contract.

Write out an agreement both parties sign and agree to. This should detail wages, services provided, scheduling, and anything else that may be necessary. 


Consult an elder care lawyer.

A lawyer should review your contract to ensure it meets tax requirements. All immediate members of the family should be involved in this process and approve the contract. Doing this can help alleviate potential disagreements.


How family caregivers can be paid through long-term care insurance.

If your loved one has long-term care insurance, it may cover some costs associated with personal care. Policies can vary greatly, so not all long-term care policies will extend coverage to paying a family caregiver. It’s important to ask your loved one’s insurance company for specific information. 


Calculate your caregiving salary.

Even with some financial support, most family caregivers do not receive enough to take care of themselves and their loved ones. To help bring this issue to the attention of state representatives, we have created a family caregiver salary calculator. You can calculate your salary by visiting our Caregiver Salary Calculator. After you calculate your caregiving salary, an invoice will be generated that can be sent to your both of your state senators. This invoice will show your senators that family caregivers need more financial assistance and push them to change how family caregivers are supported in your state.