The only harder decision than determining that your senior parent or loved one needs care is figuring out who the caretaker will be. You’d be willing to do it, but you’d have to receive compensation. If you step up to the plate, will the Social Security Administration pay for you to provide care?
Social Security programs will not pay caregivers to handle the daily responsibilities of caring for a senior. If a senior has Social Security Disability Insurance or Supplemental Security Income, beneficiaries can receive a payment each month, but these are indirect payment methods.
In today’s article, we’ll walk you through your options for receiving financial compensation if you’re contemplating caring for a senior parent, special needs or disabled person full-time. Make sure you don’t miss it!
Does Social Security Pay You To Take Care Of A Family Member?
Social Security retirement benefits are issued in the form of monthly payments to a senior.
These payments are based on the amount of Social Security taxes and work credits the recipient contributed over their working life.
The goal of Social Security income is to fill in the gaps in income older adults (62 years of age and older) can experience when they stop working or reduce their working hours.
While it would be nice if Social Security or other government programs paid for a primary caregiver, like an adult child, to step in and help out their senior parents or loved ones, that’s not exactly how it works.
However, that doesn’t mean you don’t have options through Social Security to fund caregiving responsibilities.
For example, if the care recipient – which in this case would be your senior parent or loved one – opted to use the entirety of their SSI benefits for you to care for them, that would help tremendously.
The senior in your life might also receive Social Security Disability Insurance or Supplemental Security Income as we touched on in the intro.
Social Security disability benefits and SSI will send payments to a senior each month that they can use as they wish. Back payments are also available.
So no, Social Security will never pay you directly for caretaking. However, if your senior parent or loved one is willing, they can pay you or other adult family members who care for them indirectly through their Social Security benefits.
Read our article, Am I Responsible for My Elderly Parent?
Can I Get Paid To Be A Family Caregiver In The US?
Perhaps the senior in your life doesn’t receive Social Security payments, or they do, but they’re meager at best.
Maybe your senior doesn’t want to spend their Social Security checks for caretaking services because they don’t have a lot of savings and they want to use the money for something else important, like medication.
No matter the reason, you’re exploring other options. Can you receive payments in the United States to care for your ailing senior parent or loved one?
Possibly, yes! The Federal government has several paid programs for caregivers who administer medication, clean the house, cook and feed, and help with other activities of daily living for the elderly or disabled.
Here’s an overview.
Long-Term Care Insurance
Your first option is Long-Term Care Insurance, which will pay for family to act as caregivers.
However, not all policies are the same, and some prohibit family from receiving payment if they live with the disabled or elderly person for whom they’re providing personal care services.
Aid And Attendance Benefits For Veterans
If your senior parent or loved one is a veteran, you can look deeper into aid and attendance benefits.
Under this federal program, the senior must meet specific conditions. They must:
- receive a VA pension
- have limited vision even if wearing contacts or glasses
- be bed-bound due to illness
- or need assistance with dressing, feeding, bathing, and other regular daily activities.
One of the three criteria above must apply to be eligible for this extra income.
Veteran-Directed Home And Community Based Services
Next, you can look into Veteran-Directed Home and Community Based Services. This program includes a budget the veteran can use for caretaking and other services.
Medicaid Self-Directed Care
Finally, you might enroll in the Medicaid Self-Directed Care program.
Under these state programs, qualified participants can hire adult children, like you or your siblings, or other eligible family members in the caretaking role, but this option is not available in all states nationwide (read more about this in the next section).
Which States Pay You To Take Care Of A Family Member?
That has you curious. Since only certain individual states will pay family members to enter the caretaking role, which ones will? (TIP: Double check with your state’s Medicaid office to be sure.
Here’s the list:
Colorado permits state-funded and Medicaid payments to caretakers. However, Medicaid only applies to agency employees. The state payments go to the client – in this case, the senior – who can then pay the caregiver.
Kentucky does not permit Medicaid payments used for paying caregivers, but the state-funded payments have no limit.
Maine affords payments to caretakers through Medicaid or the state. Medicaid payments apply to legally liable relatives, parents of minors, and spouses. State-funded payments have no limit.
Minnesota allows for Medicaid and state-funded payments to caretakers of seniors. The senior must receive Medicaid through a provider agency and can use the payments for immediate family members who act as caretakers.
The state-funded payments have no limits. The state would pay the senior, then they can pay the caretaker.
New Hampshire allows Medicaid payments to go toward caretaking if performed by a parent of a minor or a spouse. State-funded payments are another option, but an administering agency will decide the limit.
New Jersey permits state-funded payments to family caretakers at no limit. Medicaid payments are another option.
In North Dakota, only spouses can receive Medicaid payments to act as family caretakers. State-funded payments have no limits.
Oregon will issue Medicaid to parents or guardians of a minor and spouses who act as family caretakers. State-funded payments are mostly for spouses in the caretaking role.
Texas has no restrictions on state-issued payments. Medicaid payments apply to caretakers like foster parents or parents of minors and spouses.
Utah sends vouchers for state payments, which have no limit. Medicaid payments to family caretakers apply to parents of minors and spouses.
Vermont issues both state-funded and Medicaid payments to family caretakers. The state-funded payments have no limits, and the Medicaid payments apply to parents of minors and spouses.
Wisconsin will issue Medicaid payments for spouses or parents of minors acting as family caretakers. State-issued payments are another option at no limit.
Can I Pay My Family To Care For Me?
Let’s say the tables are turned, and you’re the one in need of in-home care on a daily basis, rather than providing it.
You’ve had a family member offer to care for you in your own home, and you’re eternally grateful but you don’t want it to be a financial burden for your caregiver.
Can you pay your family to take care of you? Yes, you can!
The options we’ve discussed throughout this entire guide apply. If you don’t have any kind of military background, you’d be excluded from the veterans’ program benefits, but you can still look into state-issued payments and Medicaid and the other non-military programs we described.
Should you be of sound mind and body, you can always agree to pay your family caregiver directly out of your own pocket, either from the Social Security payments you receive, other checks, or your bank account.
If you decide to go this route, you must put everything into writing.
That’s a bit awkward and uncomfortable since they’re family, but if things turn sour down the road, you’ll be glad you did it.
You should create a personal care agreement outlining all the care you’ll receive, by whom, how often, for how long, and what you agree to pay for the care.
You should have a lawyer review the terms of the contract; an elder care lawyer is best, but any lawyer will do.
Is Family Caregiving Income Taxable?
Tax time is never fun, but you can make it fraught with more difficulty once you incorporate family caregiving. Is this service income taxable?
If you issued payments to a caregiver exceeding $2,400 within the past tax year, you must withhold and pay Social Security and Medicare taxes on the wages.
Those taxes account for 15.3 percent of a carer’s wages, where you’re required to pay half and the caregiver the other half.
The caregiver should complete a W2 form to help with filing taxes.
On the flip side, if you are the caregiver and the person you care for lives with you, you may be eligible for a tax credit, according to AARP.
There are qualifications to meet, but the AARP says, “The 2017 federal tax law expanded the Child Tax Credit (CTC) to allow taxpayers to claim up to $500 as a nonrefundable Credit for Other Dependents, including parents in your care.“
*NOTE: We are not tax or legal professionals and the information in this article should not be taken as tax or legal advice. Please consult a professional to get information about your specific circumstances.
Social Security does not directly pay for caregivers, but a senior receiving Social Security benefits can use those funds on a family caregiver or a caregiving agency.
Family caregiving can be highly advantageous. You know your senior parent or loved one innately well so there’s no awkward getting-to-know-you phase (although you should learn what to expect as parents age).
You also understand their routines and lifestyle, creating less imposition.
Plus, you have a vested interest in their health and wellbeing since you’re family!
That said, unpaid family caregivers who enter this role full-time deserve compensation for it. It’s not always easy to talk about money with family, but it’s a conversation worth having!