Top Takeaways

1. Start with applying for Medicaid in your state which can provide access to other funding and grants for caregivers
2. If you are caring for a veteran, you may be eligible for funding through the VA
3. Long-term care policies can pay caregivers, and life insurance policies can be exchanged for cash to compensate family for care obligations
4. Setting up a pay arrangement with other family members may be a good solution for the caregiver 
   
   
   

Introduction

Caregiving for a relative can be both rewarding and challenging. In addition to the mental and physical demands, caregivers also experience financial hardships as their care responsibilities make working difficult. Often caregivers in this situation are forced to reduce their hours at their job or even leave the position entirely.

These financial realities often lead caregivers to search for options on how to be compensated for their caregiving work. Though it may sound like a foreign concept, pay for family members caring for loved ones is more common than people realize. Below are options for programs and resources offering caregiver compensation and information about how to qualify for benefits.

 

Medicaid Self-Directed Services 

Medicaid represents one of the best options to qualify for caregiver compensation. State Medicaid programs offer long-term care benefits through self-directed services, which allows Medicaid to pay the enrollee directly instead of managing their care directly through the agency. The recipient can then use the money to pay for services they feel they need, including:

• Purchasing good, supplies, and supports that increase their independence
• Paying for in-home personal care (including care from a spouse, parent, or other relative)

NOTE: These programs do not consider the caregiver’s assets. That means as a caregiver, you would be able to keep your own savings without impacting your loved one’s ability to qualify for assistance to pay you.

Who qualifies?

To receive this benefit:

• • Your family member must qualify for Medicaid in your state. While requirements vary, this means they will need to have limited income and assets. 
  • Your family member generally must need assistance to perform at least two activities of daily living (ADLs), which is the qualification for skilled nursing, memory care, or assisted living.
    
    

Medicaid-based programs allow a family member to be a paid care provider, but many states exclude spouses and legal guardians from receiving benefits. Twelve states have SDS programs that allow a spouse to be a paid caregiver.

NOTE: Medicaid programs require that the applicant have limited personal resources or savings (generally less than $2000). If the applicant has assets beyond the maximum allowed, they would need to use those assets to pay for care before they would be eligible for Medicaid coverage. 

 

How much can you get?

State-dependent

 

How to enroll

To apply, visit your state’s Medicaid website. As with any cash assistance, budgets for these programs are fixed, so your state may have a waiting list for benefits. If you think you qualify, apply as soon as possible rather than waiting until you’ve exhausted your savings. 

1. 1. Have your relative apply for Medicaid. You can find your state’s Medicaid website here.
   2. If approved, apply for your state’s SDS program. Because each state administers its own Medicaid plan, the name of the program may vary. It may be called Cash and Counseling, Consumer Directed Care, or another name specific to the state. 
   3. The budget you can get approved for will depend on the specific needs stated in the applicants plan for care. For more information, contact the Medicaid program for your state.

VA Benefits

Along with Medicaid, Veteran’s Affairs benefits are the most robust option to explore for caregiver compensation. If you are caring for a retired military member, several options under the VA offer financial support for family caregivers. These options are:

• Program of Comprehensive Assistance for Family Caregivers (PCAFC)
• Veteran Directed Care
• Aid & Attendance (A&A) Benefits and Housebound Benefits

These options are explained in detail below.

 

1. Program of Comprehensive Assistance for Family Caregivers (PCAFC)

The Program of Comprehensive Assistance for Family Caregivers provides financial support to family members caring for qualified military veterans. 

Who qualifies? 

• • Have a VA disability rating of 70% or higher
  • Have service-connected disabilities caused or worsened by active-duty service on or before May 7, 1975, or on or after September 11, 2001**
  • Have been discharged or have a date of medical discharge
  • Need at least six months of continuous, in-person personal care services
    
    

Caregivers can be immediate family or extended family, including stepfamily. Under PCAFC, eligible family caregivers can receive a monthly stipend, health care benefits, 30 days a year of respite care, and other supports. 

How much can you get?

The PCAFC monthly stipend amount is based on:

• • The amount of care the veteran requires
  • Where the veteran/caregiver lives

In 2020, a veteran unable to self-sustain in the community who lived in Dallas, Texas would have received a stipend of $2,803.17.

 

How to Enroll 

Visit the PCAFC site to apply online. The caregiver and the veteran must apply together.

** -- By October 1, 2022, PCAFC benefits will expand to include eligible veterans of any era who were seriously injured in the line of duty.

2. Veteran Directed Care

Veteran Directed Care (VDC) provides a monthly stipend to veterans to pay for the care they need. Under VDC:

• Veterans can decide for themselves what services or supports they require and can hire and schedule their care workers.
• Unlike Medicaid, the VDC programs allow for a spouse to receive caregiver payment; The veteran may choose anyone physically and mentally able to serve in this role. 
  
  

Who Qualifies? 

• • Veterans of any age qualify if they are enrolled in VA health care and meet the clinical requirements
  • Your local VA Medical Center will determine specific eligibility for the program 
    
    

How much can you get?

The VDC monthly stipend:

• • is based on the care needs of the individual veteran, which are determined by the VA Medical Center at the time of enrollment
  • calculate the amount to be paid for caregiving by multiplying hours of care by the reimbursement rate for your area set by the VA
  • generally is a rate of between $8-$12 per hour
    
    

How to Enroll

• • Not all VA Medical Centers participate in the program; contact your center about information and to get enrolled.

3. A&A (Aid and Attendance) Benefits and Housebound Benefits

A&A is another way veterans can get money added to their VA pension to pay caregivers. 

Who Qualifies? 

This benefit is available for any veteran who qualifies for VA pensions and meets one of the following criteria:

• • Requiring help from another person to perform activities of daily living (ADLs)
  • Having extremely limited eyesight even with corrective lenses (5/200 vision or less in both eyes or a highly limited field of vision)
  • Being bedbound because of disability
  • Being in a nursing home
    
    

Housebound benefits also provide additional payment to the veteran for care expenses. Veterans are eligible if they receive a VA pension and spend most of their time at home due to permanent disability.

How much can you get?

The amount of increase to the veteran’s pension for A&A and housebound benefits depends on the veteran’s family and dependents. For 2021 :

• • A veteran with no dependents who qualifies for A&A receives an additional $9,307 per year in pension
  • A veteran with no dependents who qualifies for Homebound Benefits receives an additional $3,093 per year in pension
    

You can view the VA pension tables for veteran’s with dependent and veterans married to other veterans here.

How to Enroll 

Visit the VA’s website to apply for A&A or housebound benefits. Note that veterans can only be enrolled in one of these programs at a time. 

Private Plans

1. Employer-Sponsored Caregiver Compensation

A growing number of companies offer compensation benefits specifically for employees. 

Who Qualifies? 

Varies based on the employer. 

How much can you get?

The paid time is typically brief (4 to 12-weeks on average), but they can provide the caregiver’s family time to decide on permanent arrangements. Of course this can vary based on the employer. 

How to Enroll 

To find out if your employer offers caregiver compensation, you can: 

• • Contact your HR office
  • Speak with your company’s Benefits Administrator

NOTE: Even if your employer does not offer the benefit currently, getting the request will make them aware of the demand, and they will be more likely to consider offering the benefit in the future.

 

 

2. Long-Term Care and Life Insurance 

Life insurance can be another potential source for caregiver compensation. Most long-term care insurance policies include home health and supportive services. 

Who Qualifies? 

• • If your relative has a plan, you may be eligible to receive payment for providing care. 
  • Some plans may exclude payments to family members living in the same home as the insured; check with the carrier to see if you are eligible.
    
    

How much can you get?

Varies Depending on plan, however: 

• • Some life insurance plans include long-term care benefits. These policies may cover payments to family caregivers similar to long-term care insurance.
  • For policies that don’t, families also have the option to surrender or sell the supported person’s policy and use the proceeds to pay a family caregiver.
    
    

How to Enroll

Check with your carrier for details. 

Family Resources

1. Receiving Payment from Your Loved One Directly

If your loved one has the resources, they can pay a family member to provide caregiving. This can be a sensitive area for caregivers and families; often, caregivers feel guilt for suggesting that they should be paid to care for someone they love. 

When having a conversation with your loved one:

• • Start by taking inventory of everything involved in providing care. It’s important to be objective and realistic about the costs involved—financial and mental. Write down the specifics of the care you provide, how many hours you provide it, and lost salary amounts. 
  • Be honest with your loved one about the challenges you face and the impact they have on you. Even if a caregiver wanted to provide the care for free, losing part or all of their income is simply not possible financially. Allow your loved one to partner with you to find a solution that meets everyone’s needs.
  • Keep in mind that in some cases, cash payments made to relatives can impact the supported individual’s Medicaid eligibility in the future. If you think your loved one may apply in the future, contact your state Medicaid agency for information on how to structure your arrangement to protect eligibility.

 

2. Receiving Payment from Other Relatives

Seeking caregiver compensation from siblings or other relatives is a viable solution for some families. Depending on family dynamics, broaching the subject may be a touchy situation. Non-caregiving relatives may feel guilt at the burden you’re shouldering, or they may not understand exactly how much is involved in caring for a loved one. Caregivers, meanwhile, may have resentment for other family members who aren’t participating in the day-to-day demands.

When discussing compensation with other relatives:

• • Try to avoid feelings or blame. Instead, focus the conversation on the concrete care needs and their costs. 
  • Itemize all of the services you perform as a caregiver and the financial impact the responsibility has had on you. 
  • Include average rates paid to outside aides for comparable home care functions so everyone can have a clear idea of what these services are worth monetarily. 
  • Be flexible. Don’t forget to explore all the options to reach the best solution. Other relatives may agree to take over some of the responsibilities to allow you the opportunity for respite and additional hours at your paid job. You can also split the costs of your compensation between multiple family members.
    
    

 

Final Takeaways

Being a caregiver can be a difficult and even grueling role. As a caregiving relative, recognizing that there are financial resources to help support you can be a weight off your shoulders. By exploring compensation options through government, private, and familial sources, you can make sure your loved one’s needs are met along with your own.