10 Ways to Get Paid While Taking Care of a Family Member
***Please note: In order to get started with the CDPAP program you must use a Fiscal Intermediary. FreedomCare is the #1 Fiscal Intermediary in the NY area. To see if you are eligible to get started with FreedomCare click here.
Many of us get to a point when we recognize that an elderly member of our family needs support. Maybe we notice that they are having difficulties with everyday tasks, forgetting their medications, and having trouble running errands. At times, it reaches a stage when we realize that our loved one requires more than a helping hand. They need full-time care.
In the United States, family members provide the vast majority of care services to older adults that need assistance to continue living in their own homes. According to the Family Caregiver Alliance (FCA), friends and family members provide almost 80 percent of long-term family care. The vast majority of them are unpaid.
According to research conducted by the AARP and the National Alliance for Caregiving in 2015, more than 40 million American adults provided unpaid care to a family member in the previous 12 months. Of those, around 34 million cared for someone above the age of 50, and 16 million looked after a family member with Alzheimer's disease or another form of dementia.
On average, family caregivers spent approximately 25 hours a week caring for their loved ones, although in some cases their services might take them more than 40 hours. The tasks typically involve more than assisting with daily living, and caregivers often have to perform tasks that are usually done by a nurse.
Here are some of the most common responsibilities of a family caregiver.
- They provide assistance with grocery shopping, food preparation, and feeding.
- They do laundry, cleaning, and other household chores.
- They dress, groom, bathe and tend to personal hygiene.
- They help with taking medication and coordinating physician visits.
- They manage finances help with tech usage.
- They drive their family member to and from activities, which often requires getting in and out of a wheelchair-accessible vehicle.
- They provide emotional assistance regarding personal and health-related issues.
- They continually monitor their loved one's health and follow a care-plan.
The challenges facing family caregivers
Providing care for your family member can be extremely rewarding. You get to be there for them just like they’ve been there for you in the past. You also get to make sure that your loved one isn’t receiving care from a stranger, who might not be as loving and sympathetic towards them as you are.
However, caregiving comes with its own set of challenges, primarily financial ones. You might have to reduce the number of hours you work, or you may have to leave your job entirely. You could also end up paying for some caregiving expenses on your own, adding to the financial stress.
According to a 2016 report published by the Committee on Family Caregiving for Older Adults, nearly one-third of caregivers who help family members, especially ones with both dementia and the need for assistance with daily activities, experience financial difficulties. Another report showed that women who are caregivers have an increased likelihood of experiencing poverty or relying on public support.
Considering the amount of time and energy it entails to care for a family member, and the financial stress caregivers experience, it makes sense to look for ways to make sure that they get compensated for their services.
1. The NY State Medicaid CDPAP program
CDPAP, or the Consumer Directed Personal Assistance Program, is a New York State Medicaid program that allows beneficiaries to hire their family members and friends for caregiving services. You read that right, with CDPAP your family members can get paid to take care of you.
It works as an excellent alternative for the elderly who might not be comfortable with strangers looking after them, which can be especially stressful for patients with dementia. It also benefits the family caregiver since they can get paid for their services.
The types of services provided by the program is referred to as Consumer Directed Personal Assistance Services (CDPAS).
Benefits of CDPAP
- Get paid for caregiving services - The best thing about CDPAP is that it allows you to get paid for providing caregiving services to your loved ones. It could alleviate some of the financial stress if you had to leave a job to become a caregiver.
- No specialized training required - Unlike agency home care aides, under the CDPAP program, you can be a caregiver without any specialized training. All you need is the ability to follow the directions of the patient, or an overseeing third-party, as you provide care.
- Ability to perform medical tasks - CDPAD allows you, the caregiver, to conduct medical duties like giving insulin, administering medications, and other functions that are typically carried out by nurses.
Eligibility requirements for CDPAP
- The care recipient must have Medicaid.
- The participant must have a stable medical condition, and they must require assistance with activities of daily living.
- The participant must be self-directing, or they must have a representative that is willing and qualified to direct care on their behalf.
How does CDPAP work?
- The care recipient will need to let CDPAP know about his/her needs and get a doctor’s authorization.
- You, their care provider, must submit evidence that you’re legally allowed to work in the U.S.
- You also need to get a physical and bloodwork done to demonstrate you’re healthy enough to provide care.
- If approved, your family member will be allotted a certain number of hours each week, depending on their specific needs.
- You will receive a paycheck based on an hourly pay rate for the work you do as a caregiver for your loved one.
To learn more about how to apply, visit our CDPAP page.
2. Get paid as a caregiver with a Family Care Agreement
When it comes to your parents, you might feel a sense of duty and think of unpaid care as something that comes with the territory.
That makes sense if they only require occasional help. But if your family member needs your help regularly, it might become a job that requires significant time commitments and responsibilities, as we discussed above.
In such situations, creating a written agreement regarding the care and services you provide to your family might benefit everyone involved.
A Family Care Agreement is a binding contract. It is also called a caregiver contract, or elder care contract. Having a written agreement in place will provide you with the peace of mind that you’re getting compensated for your efforts. It can also help the care recipient not feel like they're a burden on you.
It is critical that the contract is in written form, and that it isn't merely a verbal agreement. The compensation should also be reasonable and proportional to the duties and tasks performed. It should be no more than what would be paid to an outside care provider for their services, depending on your local area.
According to a state-by-state pricing guide published by Genworth, a family services financial care company, the median hourly rate for home health aide services in New York is $23 per hour. Be sure to check for prices in your state.
Another benefit of having a contract for family care services is that it could allow the care recipient to get reimbursed for their expenses by a third-party entity. They might have insurance, or they might qualify for worker’s compensation, Veterans Administration (VA) benefits, or some Medicaid program. A written agreement would allow their expenditures to be officially recognized.
Speak to an elder law attorney to help you draft such a contract. You can find an attorney that best meets your requirements at the National Academy of Elder Law Attorneys.
3. Medicaid funded programs for family caregivers
If you’re a caregiver of a family member, there might be a Medicaid program available to help you get compensated.
Medicaid State Plans / Cash and Counseling Programs
Cash and Counseling Programs through Medicaid allow the recipient the flexibility to use their benefits and pick the care providers they want. This allows them to choose you, their child or spouse, to be their caregiver. Cash and Counseling Programs are also known as "consumer-direct" or “self-directed” programs.
The specific amount that you qualify for through Medicaid would depend on the recipient’s care requirements. The Medicaid agency in your state would typically make an assessment based on how much help and resources your family member needs. Then they would create a budget which can be used to compensate you, the caregiver. The benefit amounts will vary depending on your state. For example, the benefits that Missouri residents receive from their self directed medicaid program (CDS) differs from the New York version (CDPAP).
Additional Medicaid programs that can assist with family care
- Community First Choice (CFC) - Also known as a 1915 (k) state plan, the CFC program is meant for Medicaid recipients who require care at an institutional level, like at a nursing home. However, CFC has an option for self-direction, and family members can be hired to provide care services.
- HCBS Waivers - Home and Community-Based Services Waivers, also known as 1915(c) Waivers, allow states to pay beneficiaries for the care they receive outside of an institution, such as at home by a family member. The pay varies state by state, but typically the caregiver would make anywhere from $9.00-$19.00 per hour.
- Self-Directed Personal Assistance Services (PAS) State Plan Option - Known as the 1915 (j) authority, this program allows the participants to hire and train personal care providers of their choice. They are also able to pay their service provider what they want, based on the budget allocated to them. Unlike the other programs, the recipient has to coordinate with state fiscal intermediaries to handle financial aspects of their caregivers, like taxes.
The eligibility requirements for Medicaid vary from state to state. Some require a level of care that is provided at a nursing home, while others only require that participants need assistance with daily tasks.
In general, however, these are the financial requirements to qualify for a Medicaid program.
- The applicants have an annual income under $25,000.
- The applicant's assets should be worth less than $2,000.
In the state of New York, older adults who don’t qualify for Medicaid might be eligible for the New York Expanded In-home Services for the Elderly (EISEP) program. EISEP is a program for people above the age of 60 who live at home and require assistance for daily activities.
The program varies according to your specific NY county. Make sure to get in touch with your local area agency to learn more about the requirements and benefits.
For a comprehensive guide and state-by-state Medicaid benefits and eligibility, visit Paying for Senior Care.
4. Medicare support for caregivers
Medicare is a federal health insurance program designed for people above the age of 65. Younger people with specific disabilities can also qualify, as well as someone with permanent kidney failure.
How is Medicare different from Medicaid?
While both Medicare and Medicaid are government programs, they are operated by different agencies, and they have different eligibility requirements.
You can only qualify for Medicaid if your income and assets are below a certain level. You can access Medicare regardless of your income, as long as you meet the criteria mentioned above.
If your family member qualifies for both Medicaid and Medicare, they can take advantage of both to get financial support and lower their medical expenses.
Medicare benefits are broken up into the following 4 parts:
- Medicare Part A - Helps patients pay various medical expenses like inpatient hospital care, nursing homes, and some home health care. Part A is typically premium free.
- Medicare Part B - You family member might have to pay a premium to enroll in Part B, which covers outpatient hospital care, doctor’s visits, and physical therapy
- Medicare Part C - Part C allows various health organizations to provide insurance plans to Medicare beneficiaries. These plans must at least offer benefits that the patient already enjoys under parts A and B. Part C also allows companies to provide vision and dental.
- Medicare Part D - Participants get access to prescription drug benefits from private insurance companies. Part D typically requires a monthly premium, which varies from state-to-state.
How does Medicare benefit family caregivers?
According to AARP, 42 percent of family caregivers spend more than $5,000 per year on unreimbursed care-related expenses. While Medicare won’t directly pay you for your time and effort, it might alleviate some financial stress by lowering your costs if your family member qualifies.
For comprehensive information on Medicare, visit Medicare.gov.
5. Veteran’s benefits for family care
The Program of Comprehensive Assistance for Family Caregivers
As a family member caring for a veteran with disabilities, there is support available for you from the Veteran’s Administration (VA) through the Program of Comprehensive Assistance for Family Caregivers.
To be eligible, the veteran receiving care must meet both of the following criteria.
- They must have suffered a severe injury, like psychological trauma, brain injury, or have another mental disorder that was caused or made worse by active duty on or after September 11, 2001.
- The veteran needs assistance because they’re unable to perform daily living activities, or they need to be supervised and protected due to lasting neurological injury.
To check for eligibility, you can complete the VA questionnaire.
As the primary caregiver for the veteran, you might be eligible for education and training, a stipend, reimbursement for care-related travel expenses, and more.
Veteran-Directed Home and Community-Based Services Program (VD-HCBS)
VD-HCBS allows veterans to receive a nursing-home level of care in their own homes or their caregiver’s homes. The veteran gets a budget based on their needs, and they can choose their care service providers.
The program might sound similar to self-directed Medicaid programs, but there is a distinction. In VD-HCBS, the recipient can authorize a care provider of their choice (which could be you), but they do not receive cash directly like in the self-directed programs.
Also, VD-HCBS and Medicaid’s self-directed programs are mutually exclusive, and the veteran cannot participate in both simultaneously.
For more information, visit VD-HCBS.
6. Long-term care insurance to cover expenses (LTCI)
LTCI is an insurance product that can cover the expenses related to long-term care, ones that are typically not covered by regular health insurance, Medicaid, or Medicare. Private insurance companies offer them, and the benefits can vary depending on the plan. The premiums and benefits vary based on the beneficiary's health and age. So, the earlier someone purchases LTCI, the better.
Based on your family member’s insurance plan, you might only be eligible for care from a licensed home care agency. In such cases, contact agencies in your local area, and talk to them to see if you can come to acceptable terms based on their requirements and the policy terms.
Otherwise, if you’re not limited to home care agencies, then you can draft a caregiver contract (see No. 1), and your family member would get reimbursed from the insurance company for what they pay you to care for them. Before you write an agreement, be sure to communicate with the insurance company to make sure your contract terms are feasible with the insurance plan.
While a Long-Term Care Insurance plan can be an ideal way to cover family care expenses, unfortunately, it would only work if your loved one had the foresight to enroll in an insurance policy when they were younger and healthier.
If an LTCI is currently not an option for your family, it might be a good idea for you, the caregiver, to shop for a policy in your local area. That way, if the time comes that you need long-term care, both you and your family caregiver will be thankful you had the foresight.
7. IRS tax credits for family caregivers
If you’re one of the 42 percent of caregivers that spend more than $5,000 a year on unreimbursed care for your family member, there are specific IRS tax credits that might provide some relief for you.
Here are some of the tax credits you can claim as a caregiver.
Claim your family member as a dependant
For any dependant that do not qualify for a child tax credit (an IRS tax break for having a dependent child), you can claim a $500 credit. A tax credit is different from a deduction, which reduces your taxable income. Instead, a credit is taken out of the taxes you owe. As a caregiver, you’re allowed to claim anyone related by blood, marriage, or adoption, as dependents.
Deduct dependent medical expenses
If the qualified medical expenses of all your dependents exceed 7.5 percent of your adjusted gross income, you can deduct your unreimbursed medical costs. To find out which expenses are deductible and which aren’t, visit IRS Publication 502.
Keep track of the Credit for Caring Act
Introduced in 2017 in the U.S. House and Senate, the Credit for Caring Act is a bipartisan bill proposed to provide a nonrefundable credit for family caregivers.
If you’re eligible, the bill will allow you to get a tax credit for 30 percent of your long-term care expenses over $2,000, up to a maximum of $3,000, in a year.
To be eligible, you must earn more than $7,500 in taxable income, and you must have expenses related to long-term caring for a dependent relative.
The bill hasn’t been signed into law yet. To keep track of it, visit the Credit for Care Act’s web page.
For more information on tax breaks, visit IRS.gov, or give them a call at 1-800-829-4933. You can also consult with a qualified financial advisor or a tax professional in your local area.
8. New York’s Paid Family Leave Benefits Law (PFLBL)
New York’s paid family leave law took effect in 2018, and it will be fully implemented by 2021. It allows people employed in New York state to take 12 weeks of paid leave each year to care for elderly relatives suffering from a severe health condition, including Alzheimer’s or other age-related disabilities.
Eligibility requirements of NY Paid Family Leave
To be eligible, you must meet the following criteria:
- You must have been at your current job for 26 weeks if full-time (over 20 hours/week), or for 175 days if part-time (less than 20 hours/week).
- You must not be currently receiving full disability benefits.
- You must be related to the person in need of care (parents, parents-in-law, spouse, partner, grandparent).
- You must be a resident of NY state, but the care recipient does not need to be.
The benefits of New York’s Paid Family Leave
When fully enacted in 2021, employees will be allowed to take up to 12 weeks of paid leave at 67 percent of what an eligible employee makes across the state during an average week. At the time of writing in 2019, the paid leave is at 55 percent of average weekly wages, and the employees can take up to 10 weeks off during the year.
You can take the leave at once, or periodically throughout the year. The law makes sure that you are allowed to return to your previous position, or a similar one after your paid leave ends. You will also have your health insurance while on leave.
For more information, or to apply for New York’s PFLBL, visit their website.
9. Work remotely as you care for your family member
Another option for you to earn an income as you care for your family member is to work from home. With advanced communication tools and widespread internet access, the popularity and prevalence of remote work have been growing in recent years.
According to Owl Labs, employers are increasingly likely to allow remote work. They report that around 40 percent of global companies have employees that work remotely at least some of the time. They also found that these companies experience a 25 percent less turnover than companies that don’t allow remote work.
You also have the option to become a freelancer if your company doesn’t allow you to work from home. There are plenty of remote freelance opportunities for people with a wide array of skills. Some of the most common remote freelance jobs involve working as web developers, designers, virtual assistants, online teachers, accountants, and even nursing, with the rise of telemedicine.
Regardless of your expertise, remote work requires a different set of skills than working in a traditional office setting.
According to The Muse, a job placement company, these are the characteristics that are critical for you to secure and thrive at a remote job.
- Being organized and self-motivated.
- Having strong communication skills.
- Being conscious of colleagues in different time-zones.
- Having necessary tech skills, like working with Wordpress and project management tools like Asana.
- Being aware of your work-life balance.
As a remote worker, you’re not getting paid for care that you're providing to your family member. However, it might still allow you to pay your bills while remaining close to your loved one in the event they need your assistance.
10. Settlement of family member’s life insurance policy
As the need for long-term care grows, many older Americans are selling their life insurance policies for cash. These types of transactions are commonly known as “life settlements”.
A life settlement involves the sale of a life insurance policy to a third party. The policy owner receives a cash payment. It is larger than the policy’s surrender value, but it is less than the death benefit. The purchaser assumes payment of all future premiums, and they receive the original benefit amount upon the death of the insured party (original policyholder).
Typically, life settlement candidates are over 65 years old, and their policies have a face value of greater than $100,000.
Life settlements might be appealing because it would give your family member the cash they need to cover their medical expenses, including paying you for caregiving services.
There are, however, several potential drawbacks for selling a life insurance policy for cash.
- There might be tax consequences for selling a life insurance policy.
- The money received from the settlement could affect your family member’s eligibility to receive Medicaid.
- The policyholder might compromise privacy when it comes to their personal health information.
- It might be challenging to get another life insurance policy in the future.
- Future life insurance premiums could be a lot higher because the policyholder is now older, and their health has changed.
If you decide that you want to pursue this route, you can contact a life-settlement provider directly, or go through a broker.
Make sure to call your state insurance department to make sure you’re dealing with people that are licensed and authorized. It's also critical for you to understand the regulations around life settlements in your state, so be sure to consult with an attorney.
Family caregivers provide an invaluable service to our elderly population that needs various types of assistance. They make sure that our older family members remain as healthy and comfortable as possible, regardless of their budgetary constraints.
The need for family care services is expected to grow. According to Paul Osterman, a human resources professor at the Massachusetts Institute of Technology, there will be a shortage of 3.8 million family caregivers in the United States by 2030. The rising need is primarily going to be driven by America’s aging population.
Given the vital role that caregivers play in our societies and the expected increase in the need for them, we should do everything we can to make caregiving attractive and financially sustainable. We should seek adjustments to existing regulations and the medical system to appropriately value direct caregivers.
In the meantime, if you’re currently a caregiver, we encourage you to explore all of the different avenues to get paid that we discussed in this article. The added financial security will provide you with more peace of mind so that you can focus on the real job at hand, which is taking the best care of your elderly family member.