More than 53 million Americans identify as family caregivers—over 34 million are caring for adults age 50+.¹ If you’re like many of them, you may view the support you provide as a labor of love. But that doesn’t mean it’s not valuable. Sure, there’s the obvious value to the care recipient. But your work also saves health systems and health insurance providers millions of dollars every year, by keeping more aging adults out of hospitals and emergency rooms. You improve pharmaceutical companies’ bottom lines by ensuring medications are taken as prescribed. You free up hospital beds and healthcare workers for others who are sick or injured.

When AARP totaled up the hours that family caregivers put in, and applied the average hourly pay for professional home care, they found that collectively you’re providing over $600 billion worth of care every year.² Yet very few of you are getting paid for your efforts.

Instead, about 40% of you are reducing your hours at your paying job, or leaving your job entirely to make time to provide care.³ So not only are you missing out on income, but also the 401(k) and Social Security contributions you’d have made while working your paid job. Without any form of financial assistance available, many of you are draining your savings accounts and sometimes even going into debt to cover the out-of-pocket costs of providing care. Those costs come to about $7,200/year for the average family caregiver.⁴

This isn’t sustainable for you or our public health systems. Fortunately, there are innovative organizations working to solve this situation. In the meantime, you should be aware about the compensation opportunities that already exist for some family caregivers.

How to get paid by Medicaid

What is Medicaid?

Medicaid is a public entitlement program that helps cover care costs for eligible Americans. Each state operates its own Medicaid program with unique eligibility requirements, rules, and benefits. But all state Medicaid programs must meet the basic Medicaid rules set by the federal government. Some state Medicaid programs pay family members to care for eligible enrollees.

Who is eligible for Medicaid?

Adults over 65 and individuals with qualifying disabilities may be eligible for Medicaid if they meet strict income requirements. Each state sets its own maximum income level for an individual applying for Medicaid Home and Community Based Services or Medicaid Waivers (I’ll explain these in the next section), ranging from $914/month to $2,742/month in 2024. And if your loved one has any savings or investments socked away, they’ll likely have to spend down nearly all of it on healthcare before qualifying for long term care coverage through Medicaid.

What payment options are available through Medicaid?

• Medicaid Personal Care Services (PCS) is a benefit that helps with activities of daily living (ADLs) like bathing, dressing, toileting, and meal preparation. These services must be ordered by your family member’s doctor, provided based on a documented plan of care, and supervised by a nurse. Many state Medicaid programs pay family members to provide PCS to their loved ones.
• Medicaid Home and Community-Based Services (HCBS) 1915(c) Waivers allow states to provide long-term care services in home and community settings rather than nursing homes. This allows states to cover services for older adults who require a nursing home level of care but can remain in their homes with support. Covered services may include personal care, adult day health, respite care, and others needed to avoid institutionalization. Many states with HCBS Waivers will pay family members to provide personal care services. You can find out if yours is one of them on the State Waivers List at Medicaid.gov.

How does Medicaid payment for caregiving work?

Most states offer some form of "consumer-directed" or "self-directed" care option under their Medicaid program that permits hiring family caregivers to provide Personal Care Services. Common names for these programs include Consumer-Directed Personal Assistance Services, Cash & Counseling, and Self-Directed Services.

Family caregivers must meet any training and/or certification requirements set by the state, often including background checks. The pay rates for family caregivers are usually based on the going rates for home care aides in that state, ranging from around $13-$18 per hour or more.⁵

Steps to become a paid family caregiver through Medicaid

The process will vary, state by state. But generally, you will need to:

• Find out if your family member is eligible for Medicaid, and if the Medicaid program in the state where they live pays family caregivers. You can do this by contacting that state’s Medicaid program.
• If the answers to both of those quetions are yes, work with the state Medicaid office to enroll your family member. This process may take a couple of months.
• Work with your state Medicaid office to gather or complete the necessary paperwork to apply for the self-directed care benefit, including a physician’s order for Personal Care Services for your family member.
• Complete your training and certification process.

How to get paid by the U.S. Department of Veterans Affairs (VA)

What is the VA?

The VA is a federal agency that provides benefits and services to military veterans and their families. It offers education opportunities, rehabilitation services, disability compensation, home loans, pensions, burials, and comprehensive health care through its medical centers, clinics, and nursing homes.

Currently, the VA has four programs that pay family members who are taking care of older or disabled veterans or their surviving spouses. These programs are:

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

What payment options are available through the VA?

Aid and Attendance Pension Benefit (A&A)

• Who is eligible? A veteran or surviving spouse who is eligible for the basic VA pension, or the basic survivor pension may qualify for A&A if they require assistance with activities of daily living (bathing, grooming, dressing, meal prep, and medication management) and/or have a diagnosis of Alzheimer’s disease.
• How does it work? The A&A program provides the eligible veteran or surviving spouse a monthly cash allowance which they can use at their own discretion, including to pay for in-home care provided by certain family members—a spouse cannot be paid to provide care in this program.

Housebound Pension Benefit

• Who is eligible? A veteran or surviving spouse who is eligible for the basic VA pension, or the basic survivor pension may qualify for the Housebound Pension Benefit if they’re unable to leave their home due to a permanent disability.
• How does it work? The Housebound Pension Benefit provides them with a cash benefit they can use to hire a friend or relative other than a spouse to provide in-home care.

Program of Comprehensive Assistance for Family Caregivers (PCAFC)

• Who is eligible? A veteran who was critically hurt or had a serious illness in the line of duty, and is enrolled in the VA’s health care program may qualify for the PCAFC if they have a VA disability rate of at least 70% (individual or combined) and require at least six months of personal care services due to an inability to complete at least one ADL and/or require supervision.
• How does it work? Family caregivers can receive monthly cash benefits through the PCAFC program, as well as opportunities for education, training, counseling, and up to 30 days of respite care per year.

Veteran Directed Care (VDC)

• Who is eligible? A veteran who is enrolled in the VA’s medical benefits package and requires skilled services and assistance with ADLs may be eligible for VDC.
• How does it work? The VDC  program provides the veteran with a monthly budget (not a cash payment) to pay for the care they need, including medical equipment or a caregiver. The caregiver can be an adult child, grandchild, spouse, or other relative. The budget is managed by a service that makes payments to the family caregiver or equipment supplier. This pilot program is currently available to veterans in 43 states, Washington DC, and Puerto Rico. The remaining seven states are still in the process of reviewing or approving the VDC pilot: Delaware, Georgia, Kansas, Minnesota, Nebraska, North Dakota, and Rhode Island. Check with your local Area Agency on Aging (AAA) to see if a program exists or is in development in your area.

Steps to become a paid family caregiver through the VA

Navigating the VA can be challenging and take some time. The Elizabeth Dole Foundation and the American Legion (202-263-5759) offer assistance to military caregivers who would like to access VA benefits.

How to get compensated by Paid Family Leave

What is paid family leave?

Paid family leave laws expand on the federal Family Medical and Leave Act (FMLA). FMLA provides unpaid leave that protects your job and health insurance benefits. State-based paid family leave, however, allows some workers to receive all or a portion of your income if you have to miss work to care for a family member with a serious health condition. Currently, only 11 states (California, Colorado, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington) plus Washington, DC have enacted paid family leave laws. Four more states will be joining the pack in 2025 and 2026: Delaware, Maine, Maryland, and Minnesota.

Some employers also have their own paid family leave policies. So whether or not you live and work in a paid family leave state, be sure to ask your HR department if paid family leave is among your employee benefits.

Who is eligible for paid family leave?

Each state with paid family leave laws sets their own eligibility requirements, wage replacement amount, leave duration, and definition of “family member.” There are resources online where you can read about the details of the family leave laws available to you in your state.

How does it work?

Paid family leave works differently depending on the state that offers it.

In some states, you’re automatically eligible to receive all or a portion of your income for the duration of your leave, simply by working for a participating employer. Often, a “participating employer” is one that meets the federal FMLA requirements: All public employers and private employers who employ 50+ workers are required to offer FMLA to their employees who have been employed there for at least a year and worked at least 1,250 hours during the 12 months prior to the start of leave.

In other states, residents or workers have the option to buy into a voluntary state paid leave insurance program. This model often allows more people to take advantage of paid family leave, because those who work for smaller employers or who are self-employed can pay for coverage.

Steps to become a paid family caregiver through paid family leave

Once you’ve determined that you’re eligible to take paid family leave, you’ll have to follow the unique application process required by your state and/or your employer. The process often looks something like this:

• Notify your employer of your need for leave.
• Ask your loved one's health care provider to provide written certification of their health condition and need for care.
• Your employer will then provide you with forms to fill out and return to them.
• Your state may have a paid family leave application website where you can obtain and/or submit paperwork directly.
• If you know in advance when your leave will start, tell your employer at least 30 days before that date. If you can’t do so or don’t know in advance, tell your employer as soon as possible.

How to get paid by a long-term care insurance policy (LTCI)

What is Long-Term Care Insurance?

Long-term care insurance (LTCI) is private insurance that can cover the costs of nursing home care, assisted living facilities, home health care, skilled nursing, personal care, homemaker services, adult day care, hospice care, and respite care for people who require assistance with ADLs. It provides more flexibility and options than government programs like Medicaid, which have strict income and asset limits.

Who is eligible to get paid by LTCI?

Unfortunately, only about 3% of adults over the age of 50 have LTCI.⁶ This is due, in part, to a lack of awareness about it, and in part to its cost. Policies can cost a couple thousand to $10,000 dollars per year, depending on the applicant’s age and health, and the coverage they choose. So if your family member has a policy, count yourself lucky.

That said, some LTCI policies only cover care that’s provided in a nursing home or assisted living facility, and not care provided in the home. Of the policies that cover in-home care, only a portion will pay family members (often referred to as “informal caregivers”) to provide that care.

If your loved one has an LTCI policy that pays informal caregivers, you may be eligible to get paid for the care you provide. Your family member’s policy will likely require them to meet certain benefit eligibility criteria, such as needing assistance with a minimum number of activities of daily living (ADLs) or having a cognitive impairment.

How does it work?

Payments from LTCI policies can work two ways:

1. If the policy allows cash payments for informal care, the insurance company will send the full monthly benefit amount directly to the policyholder each month, who can then use those funds to pay you.
2. If the policy uses a reimbursement method, you’ll need to submit invoices or documentation of the care you provide. The insurance company will then reimburse the policyholder for those covered costs.

Steps to become a paid family caregiver

• Once you’ve established that your family member is eligible to receive benefits from their LTCI policy, and that the policy pays “informal caregivers” you or the family member can initiate a claim with the insurance company.
• The insurance company may require an assessment or care plan detailing the level of care your family member needs.
• There’s typically an “elimination period” that must be met before benefits begin, similar to a deductible. During the elimination period, you won’t be paid for the care you provide.
• Once you complete the elimination period, you can start claiming your payments from the LTCI provider.
• Find out how you can get paid as a family caregiver through long-term care insurance with this NCOA partner resource.

How to get paid by a personal care agreement

What is a personal care agreement?

A personal care agreement is a legally binding document a family can draw up that names one or more family members as your loved one’s caregiver(s) and defines the amount that you will be paid for this care. If the care recipient is providing the compensation, this document will be especially helpful if, at some point, they qualify for Medicaid, as it will provide proof that they have spent down their assets on health care. Without proper documentation in place, any money they pay you for care may have to be paid to Medicaid in order for your loved one to be deemed eligible for Medicaid benefits in the future.

Who is eligible to get paid by a personal care agreement?

Any family can choose to put a personal care agreement in place. It works well when the family has the means and desire to compensate the family caregiver(s).

How does it work?

A personal care agreement lays out your duties and responsibilities as the family caregiver(s) and the compensation that the family will pay to you, based on the going rate for professional care in your area. Once it’s in place, your family member(s) can pay you on the schedule outlined in the agreement.

Steps to become a paid family caregiver

• Discuss the option of a personal care agreement with your family members.
• Research the going rate for in-home caregivers in your area to determine an hourly rate.
• If your family agrees that this is a good option for you, it’s advisable to work with an elder law attorney to draft this agreement.
• Keep a detailed accounting of the hours you provide care, costs you incur, and the pay you receive.

Compensation for some, but not all

As you read through the payment options above, you may have noticed that they’re accessible to a few groups of people:

• Family caregivers whose aging loved one has a low enough income to qualify for government assistance.
• Family caregivers whose aging loved one can afford LTCI or payments to you out of pocket for providing care
• Family caregivers of some veterans
• Family caregivers in states that offer paid family leave and who have enough hours in the day to remain employed and provide care (this pay will only cover up to 12 weeks per year)

Unfortunately a lot of family caregivers don’t fall into any of those groups. But there’s hope on the horizon. Innovative companies, including RubyWell, are working hard to solve this care crisis from many different angles. Everyone working in this space also needs to work with state and federal governments to put policies in place that will make solutions accessible to all who need them.

FAQ

How much do family members get paid for caregiving?

The compensation amount for family caregivers varies depending on the program or person paying you and the state where you live. The pay should be based on the going rate for paid caregiver in your area.

You can find that out a few ways:

1. Call several home care agencies in your area and ask what their average hourly pay is for a professional in-home caregiver.
2. This article lists the average hourly rate and monthly salaries for full time, in-home caregivers in each state.

Are there tax benefits for being a paid family caregiver?

Yes, there are several tax breaks that family caregivers can take advantage of.

• The Credit for Other Dependents tax credit can save some family caregivers up to $500.
• Some family caregivers can deduct unreimbursed medical expenses for your dependents if the expenses exceed 7.5% of your adjusted gross income. This includes costs like home healthcare, adult day care, and necessary home modifications.
• Some family caregivers may file as Head of Household if you meet certain requirements, like paying for more than half of the household expenses.
• The Child and Dependent Care Credit doesn’t require the person you’re caring for to be your dependent, but they must live with you and be physically or mentally unable to care for themselves. This tax credit reimburses you up to $ 3,000 for money you pay for your family member’s care while you work.

You can read details about each of these tax credits in Money Saving Tips for Family Caregivers.

Are there any specific training requirements for paid family caregivers?

The answer to this question varies depending on the program or person paying you and the state where they live. Under a personal care agreement, you likely won’t need training or certification. And if you’re taking advantage of paid family leave, you won’t need training or certification to collect your pay. But for many government-funded programs and LTCI policies, you will need to get trained and or registered/certified by your state to be eligible to receive compensation.

Regardless of whether training is required or not, it can help you feel confident that you’re providing the best care to your aging family member. You can ask their health provider if they offer training for family caregivers. A new Medicare rule effective in 2024 pays eligible health providers to offer training and education to their patients’ family caregivers.

Sources

1. National Alliance for Caregiving and AARP. Caregiving in the U.S. Found on the internet at:Found on the internet at https://www.caregiver.org/resource/caregiver-statistics-demographics/

2. AARP. Valuing the Invaluable 2023 Update: Strengthening Supports for Family Caregivers. Found on the internet at: https://www.aarp.org/pri/topics/ltss/family-caregiving/valuing-the-invaluable-2015-update/

3. Family Caregiver Alliance. Caregiver Statistics: Work and Caregiving. Found on the internet at https://www.caregiver.org/resource/caregiver-statistics-work-and-caregiving/

4. AARP. Family Caregivers Spend More Than $7,200 a Year on Out-of-Pocket Costs. Found on the internet at https://www.aarp.org/caregiving/financial-legal/info-2021/high-out-of-pocket-costs.html

5. Care.com. Here’s the average monthly in-home caregiver salary in every state. Found on the internet at: https://www.care.com/c/average-in-home-caregiver-salary-by-state/

6. JRC Insurance Group. Long-Term Care Statistics 2022. Found on the internet at: https://www.jrcinsurancegroup.com/long-term-care-statistics/