Savvy Senior: Getting paid as a family caregiver

Dear Savvy Senior,

I have been taking care of my elderly father for over a year and it’s taking a toll on my finances because I can only work part-time. Are there any resources you know about that can help family caregivers get paid? 

— Seeking Support

Dear Seeking,

Caring for an elder parent can be challenging in many ways, but it can be especially difficult financially if you have to miss work to provide care. Fortunately, there are a number of government programs and other tips that may be able to help you monetarily while you care for your dad. Here are some options to explore.

Medicaid assistance

All 50 states and the District of Columbia offer self-directed Medicaid services for long-term care. These programs let states grant waivers that allow income-qualified individuals to manage their own long-term home-care services. In some states, that can include hiring a family member to provide care.

Benefits, coverage, eligibility and rules differ from state to state. Program names also vary. What’s called “consumer directed care” in one state, may be called “participant-directed services,” “in-home supportive services” or “cash and counseling” in another. Contact your state Medicaid program to ask about its options or to start the sign-up process.

Veterans benefits

If your dad is a military veteran, there are several different VA programs he may be eligible for that provide financial assistance to family caregivers, including:

Veteran-Directed Care: Available in most states, this program provides a needs-based monthly budget for long-term care services. (VA.gov/geriatrics/pages/Veteran-Directed_Care.asp)

Aid & Attendance or Housebound benefits: These programs provide a monthly payment to veterans and survivors who receive a VA pension and who either need assistance with activities of daily living (i.e., bathing, dressing, going to the bathroom), or are housebound. (VA.gov/pension/aid-attendance-housebound)

Program of Comprehensive Assistance for Family Caregivers: This provides a monthly stipend to family members who serve as caregivers for veterans who need assistance with daily living activities because of an injury or illness sustained in the line of duty. (Caregiver.va.gov/support/support_benefits.asp)

Other options

If your dad has some savings or other assets, discuss the possibility of him paying you for the care you provide, or talk to your siblings to see if they can chip in.

If they agree, consider drafting a short-written contract that details the terms of your work and payment arrangements, so everyone involved knows what to expect. A contract will also help avoid potential problems should your dad ever need to apply for Medicaid for nursing home care.

Also, check to see if your dad has any long-term care insurance that covers in-home care. If he does, in some cases those benefits may be used to pay you.

Tax breaks

There are also tax credits and deductions you may be eligible for as your dad’s caregiver that can help.

For example, if your dad lives with you and you’re paying at least half of his living expenses, and his gross income was less than $4,400 (in 2022) not counting his Social Security, you can claim him as a dependent on your taxes and get a $500 tax credit.

If you can’t claim him as a dependent, you may still be able to get a tax deduction if you’re paying more than half his living expenses including medical and long-term care costs, and they exceed 7.5 percent of your adjusted gross income. You can include your own medical expenses in calculating the total. To see which medical expenses you can deduct, see IRS Publication 502 at IRS.gov/pub/irs-pdf/p502.pdf.

Or, if you’re paying for in-home care or adult day care for your dad so you can work, you might qualify for the Dependent Care Tax Credit which can be worth as much as $1,050. To claim this credit, you’ll need to fill out IRS Form 2441 (IRS.gov/pub/irs-pdf/f2441.pdf) when you file your federal return.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.