Financial help for family caregivers: every program that actually pays

Family caregivers provide an estimated $600 billion a year in unpaid care, spend an average of more than $7,000 a year of their own money on it, and often cut their working hours or leave jobs. The programs that offset this are real, scattered and badly advertised. This is the map.

Medicare pays for medical care. It does not pay family members, does not pay for custodial care, and has no caregiver stipend. Families who are told otherwise are being misled. Everything below comes from somewhere else.

Medicaid is state-run and income- and asset-tested, and in most states it includes programs that pay for personal care at home. Many of those programs let the recipient choose who provides the care, including a family member, who is then paid an hourly rate by the program or its fiscal intermediary. Names vary: consumer-directed, self-directed, participant-directed, Cash and Counseling, In-Home Supportive Services (California), Consumer Directed Personal Assistance Program (New York), STAR+PLUS Consumer Directed Services (Texas). A few states also run structured family caregiving programs that pay a daily stipend to a live-in family caregiver.

• Eligibility is your parent’s, not yours: income and asset limits, plus a functional need for help with daily activities, assessed by the state.
• Spouses are excluded from being paid caregivers in most states; adult children usually are not.
• Hours are set by an assessment, typically 10 to 40 a week. Pay is around the state’s home care aide wage.
• Many states have waiting lists for waiver programs. Apply early.
• Rules for home care Medicaid are often more generous than for nursing home Medicaid, and a spouse’s assets are partially protected. Do not assume your parent will not qualify; get a screening.
• Start with the state Medicaid agency, the Area Agency on Aging, or an elder-law attorney for complex finances.

Start with the VA Caregiver Support Line (855-260-3274) or a county Veterans Service Officer, who helps with applications for free.

• The federal FMLA gives eligible employees up to 12 weeks of unpaid, job-protected leave a year to care for a parent with a serious health condition. Unpaid, but it protects the job and health insurance.
• State paid family leave programs in California, New Jersey, New York, Rhode Island, Washington, Massachusetts, Connecticut, Oregon, Colorado, Maryland, Delaware, Minnesota and the District of Columbia (with more phasing in) pay a portion of wages for weeks of family caregiving leave. Check your state’s program; eligibility and benefits vary.
• Employer benefits: some employers offer paid caregiver leave, backup care, employee assistance counseling and flexible schedules. Ask HR specifically.
• Dependent Care FSA: if your parent lives with you and qualifies as your dependent, adult day care costs may be reimbursable pre-tax through an employer dependent care account, up to $5,000 a year.

• Claiming your parent as a dependent, if you provide more than half their support and their gross income is below the threshold (Social Security benefits are largely excluded from that test). This can unlock the Credit for Other Dependents and head-of-household filing status.
• Medical expense deduction: if you itemize, medical expenses you pay for a dependent parent, including home care, equipment, modifications for medical reasons and some assisted living costs, are deductible above 7.5% of your adjusted gross income.
• Child and Dependent Care Credit: for work-related care costs of a dependent parent who cannot care for themselves and lives with you.
• Some states have caregiver tax credits. Check your state’s revenue department.
• A tax preparer who knows elder care issues will find more than software does. The cost is deductible.

• If your parent has a long-term care policy, read it. Some pay for family caregivers directly; more pay for agency care that frees you; some have cash benefits with no restrictions. Start the claim early; elimination periods run from when care begins.
• A personal care agreement: a written contract under which your parent pays you for care at a fair rate. It protects the family from later disputes, documents the payments as compensation rather than gifts (which matters for future Medicaid eligibility), and is taxable income to you. An elder-law attorney should draft it.
• Life insurance with accelerated benefits or a long-term care rider, and reverse mortgages, are ways some families fund care. Both have serious trade-offs; get independent advice.