By Scott Tanaka, MSW, Project Specialist at AARP
Scott Tanaka
I have previously shared about my social work internship at Providence TrinityCare Hospice, and part of the work I did as part of the care team was to help eligible caregivers get paid for caring for their loved ones.
Your chances are best if you are caring for someone eligible for Medicaid and living in a state with a Medicaid care program or caring for a U.S. military veteran. But there are other possibilities.
Medicaid
All 50 states and the District of Columbia offer Medicaid waiver self-directed long-term services and supports (LTSS) programs that allow qualified individuals to manage their own care — meaning that people can hire and fire their own caregivers. Some states permit the care recipient to hire a family member to provide care.
Eligibility, benefits, coverage and rules differ from state to state. Some programs pay family caregivers but exclude spouses and legal guardians. Others will pay care providers only if they do not live in the same house. Medicaid home care benefits also depend on the Medicaid program in which you are enrolled.
Program names also vary. What is called Consumer Directed Care in one state is called Participant Directed Care in another. Among the many names: Self-Directed Care, In-Home Supportive Services, Cash and Counseling.
To qualify for Medicaid, the recipient must not exceed the program’s annual income and countable assets, not counting home value.
STEP BY STEP
Step 1: If your family member qualifies and is ready to join the more than 1 million people already participating in self-directed care plans, contact your state Medicaid office to begin the process. You can find your state Medicaid office by visiting https://www.medicaid.gov/about-us/contact-us/contact-state-page.html.
Step 2: The applicant (with assistance, if desired or needed) is assessed for risks, need, strength, capacities and preferences as required by Centers for Medicare & Medicaid Services.
Step 3: Your family member and any chosen representatives create a written service plan detailing the daily living assistance required — including bathing, dressing, moving from bed to wheelchair, light housekeeping, meal preparation, feeding, laundry, supervision, shopping, transportation and medication compliance. There should be contingency plans for coverage when the care provider is off and instructions on how fill-in caregivers should address risks.
If the assessment shows need, a budget for goods and services will be provided.
Step 4: When the care plan is set, the participant (or surrogate, if needed) chooses a caregiver.
Long-Term Care Insurance
Some long-term care insurance policies will pay family members for caregiving. Some exclude spouses or family members living in the home. Ask your family member’s insurance agent for specifics. Request a written confirmation of benefits.
Getting Paid by a Family Member
If the family member needing assistance is mentally sound and has enough money and assets to pay a caregiver, your loved one can choose to pay you or another family member for the same services that would be provided by a professional.
STEP BY STEP
Step 1: Put any awkward feelings aside to discuss needs, wages and paydays, health risks, schedule and how respite care and caregiver sick days will be handled.
Step 2: Draw up a contract that includes the hourly wage and services to be provided.
Step 3: Consult an eldercare lawyer to review your contract to make sure it meets tax requirements, deals with inheritances and is approved by all other interested parties (siblings, for example).
Step 4: Beware of emotional pitfalls. If family members seem uncomfortable with the arrangement or disagree with the plan, consider a session with a family therapist who specializes in eldercare, a family mediator or other neutral party.
Step 5: Caregiver and care recipient both sign the contract.
Step 6: Keep professional records:
Specify services performed, dates and amount paid. This paperwork is essential if your family member later applies for Medicaid. During the qualification process, a caseworker will examine records for the last five years.
Report income. As with every paid job, caregivers are legally required to report wages as taxable income. If, at a later date, your family member becomes Medicaid eligible but taxes have not been paid, Medicaid will consider the money a gift — not an expense. This could prevent your loved one from qualifying for Medicaid. The IRS, on the other hand, is clear: When services are provided, all money received is a wage, not a gift.
For more information, visit aarp.org/caregiving/.
Scott Tanaka is a board member for the Washington, D.C., JACL Chapter, and Project Coordinator for AARP AARP Public Policy Institute.
