Caretakers of ill or disabled loved ones might not be paid for their time and effort. If a family caregiver has other commitments, such as to a job or their own family, they can experience stress and other challenges.
In some cases, they might also be paying for a parent or another loved one's care. An AARP study found that 78 percent of family caregivers regularly incur out-of-pocket costs caring for a loved one, with average annual expenses topping $7,200.
If the care recipient can make their own decisions, it's possible for a family caregiver to get paid for their efforts. Depending on the option you choose, you may want to draft a caregiver contract (sometimes called a "Personal Services Contract" or a "Personal Support Services Agreement"). You may also want to consider potential tax issues regarding these arrangements.
Government Assistance for Family Caregivers in Maine
MaineCare, the state form of Medicaid, offers two different programs to help people who need long-term care but want "to age in place." Similar programs may be available in other states.
Consumer Directed Attendant Services (CDAS) – CDAS covers personal care for adults with a permanent, verifiable disability whose ability to care for themselves at home or in certain group living environments is limited. Participants can choose, hire, train, and manage their caretakers.
- Eligibility requirements: The person who needs care shouldn't already be receiving personal care attendant services through other MaineCare programs. They must also meet financial eligibility requirements, including income and "countable" assets.
- Family member limits: Parents and spouses aren't eligible. Adult children may qualify if they're not already legal representatives for their parents.
Maine Elderly and Adults with Disabilities Waiver - This program is for seniors and disabled adults who might one day need admission to a nursing home. Among the long-term care benefits it provides are personal care assistance, assistive technology, delivered meals, and health services. For personal care assistance, licensed agency providers can offer support, but program participants can also choose who they hire and manage. A financial management services agency handles the monetary aspects of the employment responsibilities, such as tax withholding and payments. Enrollment may be limited. Applicants could be put on a waiting list.
- Eligibility requirements: Participants must be adults who live at home or with a loved one.
- Family member limits: Spouses are excluded; however, the participant may hire an adult child or another relative.
Non-MaineCare or Medicaid programs:
Consumer-Directed Home Based Care (CDHBC) - Managed by Maine's Office of Aging and Disability Services (OADS), CDHBC provides “consumer-directed” personal assistance, including nursing services and assistive technologies. Generally, the benefits and services are limited to those essential for keeping the enrollees at home. The person who receives care can choose, train, and manage their own caretakers. However, the administering agency pays them.
- Eligibility requirements: Participants must be adults and ineligible for MaineCare. Like MaineCare, the program has income and asset limits. Applicants must need help with a certain number of activities of daily living, such as eating and bathing, and "instrumental" activities like meal preparation.
- Family member limits: none
Respite for ME - This new, two-year pilot program provides grants of up to $2,000 to Mainers who support an eligible family member who needs in-home respite care. The program reimburses caregivers after they provide receipts for covered services.
- Eligibility requirements: The adult age 60 or older or who has dementia or a disability who receives care must live at home or with a caregiver. Their adult caregiver must not already be paid. They should also be able to show that they experienced financial losses or hardship connected to the COVID-19 pandemic on or after January 21, 2020. They must also meet other criteria. MaineCare recipients may qualify; however, care recipients under other programs could be ineligible. Those on a waitlist may apply for grants.
- Family member limits: Parents caring for minors are not eligible for this program.
Government Help for Maine Military Veterans
Under the Veterans Health Administration, four homecare programs cover care expenses and payments to spouses and other adult family members.
Veteran-Directed Care - Eligible veterans may manage their own budgets, decide which goods and services they need, and hire and supervise their own workers. Caregivers help the veteran with eating, bathing, or other daily activities. The Veterans Affairs Maine Health Care System, based at Togus, manages the program, which subcontracts to Maine's five area agencies on aging.
Aid and Attendance - Veterans who get a VA pension and meet the program criteria for long-term care can qualify. Surviving spouses of qualified veterans may also be eligible. Participants cannot also receive Housebound Benefits.
Housebound Benefits - VA pensioners may be eligible for these benefits if they spend most of their time at home because of a permanent disability. Participants can't also receive Aid and Attendance benefits.
Program of Comprehensive Assistance for Family Caregivers - Recipients need help with everyday activities because of a serious injury, illness, or service-related disability they sustained while on duty on or before May 7, 1975, or on or after Sept. 11, 2001. Participants' monthly stipend is based on federal pay rates in their region. The caregiver receives 62.5 percent or 100 percent of the pay rate, depending on the level of supervision and help the veteran needs. The veteran must be enrolled in VA health services, have a disability rating (individual or combined) of 70 percent or higher, and need personal care for everyday activities or supervision or protection.
Other Options for Paying a Family Caregiver
- If the care recipient has long-term care insurance, it could cover some home health-care and personal care services. The policy, however, might not include paying spouses or other family members. If necessary, contact the insurer for more information.
- Depending on the employer, some companies offer their employees paid leave.
- If funds are available, the person who needs care can consider paying their family caregiver. If the care recipient needs long-term personal and medical care assistance through MaineCare, which has asset and income requirements, they may “spend down” cash to pay a family caregiver.
To make an employer-caregiver arrangement clear, create a caregiver contract that defines the caregiver's duties and the employer's responsibilities. Payment should be based on wages for comparable services from local home care providers. Ideally, a knowledgeable elder law attorney will set up a contract, especially to help with MaineCare eligibility.
Taxes: Consequences and Credits
The family caregiver's employer might need to pay state or federal taxes. The caregiver, if they qualify as an independent contractor, could need to pay taxes on the income. On the other hand, paid family caregivers may qualify for state or federal tax credits to cover their expenses.
To find out which classification suits your situation and if you would owe money or can get refunds, contact a tax professional or your local IRS Taxpayer Assistance Center.
If you need help applying for long-term care through MaineCare or finding ways to pay a family caregiver, our experienced attorneys would be glad to help. Contact us online or call us today: (207) 377-6966.