Getting Paid for Taking Care of Your Elderly Parents in California
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Approximately 53 million American adults have cared for a family member– usually either adults, aging parents, or children with special needs – without pay at some time during the previous 12 months, according to Caregiving in the U.S. 2020, a report by AARP and the National Alliance for Caregiving (NAC). This is an increase from the estimated 43.5 million caregivers, according to the 2015 report.
A study on the economic impact of family caregiving by the National Alliance for Caregiving (NAC), in conjunction with the AARP Public Policy Institute, found that 36% of family caregivers of older adults experienced moderate to high levels of financial strain. This is due to reduced participation in the labor force and out-of-pocket spending for purchasing goods and services for the person receiving care. While you are spending time caring for your parents, cooking, cleaning, transportation, activities of daily living, you are not receiving compensation for your time.
You may be eligible to receive compensation for caring for your parents through community resources, long-term insurance, Veterans’ benefits, or other sources. Traditional health insurance and Medicare may not provide funding for home health care. Below are the steps you need to take to become your parents’ paid caregiver, along with some resources that may provide funds to compensate you for your care.
1. Decide what services your parents need.
Do they need assistance with daily living activities, such as:
- Light housekeeping
- Managing medications
- Meal preparation
Or are there medical conditions that require specialized care, day care, nursing home care, or a skilled care provider?
If your parents require medical care beyond their personal care needs, you may need to find other options, such as home health care services provided by a licensed medical professional.
2. Determine what services and funding sources your parents are eligible to receive.
Your parents may be eligible for assistance programs and resources to pay for their care. Eligibility requirements vary according to each resource, so we have explained each one below.
In California, your funding resources include:
In-Home Supportive Services (IHSS)
IHSS is a Medi-Cal (Medicaid in California) program that provides funds for personal care and support services, such as household chores, to those living in their homes.
This Medicaid program provides payments directly to Medicaid recipients to cover their care expenses at their discretion and pay for eligible caregivers they choose, including adult children, siblings, spouses, nieces, nephews, and even friends. This means that participants are self-directing their care, which is based on Medicaid’s concept of Cash and Counseling. The care recipient has control over hiring, supervising, and terminating their caregivers.
For your parents to be eligible, they must meet specific requirements, which include an income of less than $1,271, and their “countable” resources can’t be more than $2,000. Countable resources do not include their house and car.
Home & Community-Based Services (HCBS) Waiver Program
California offers several HCBS waivers, which waive certain Medi-Cal requirements to allow people to remain at home rather than move to an assisted living facility.
There are several different types of Medicaid waivers available, such as:
- Assisted Living Waiver (ALW)
- Multi-Purpose Senior Services Waiver (MSSP)
- Veteran-Directed Care (VD-HCBS)
- Home and Community-Based Services Waiver for the Developmentally Disabled (HCBS-DD)
Many seniors who receive Medicaid benefits are eligible for HCBS programs, which provide a daily, tax-free stipend to help pay for senior care services. This assistance is usually available to those who receive in-home care, and in addition to seniors, it also covers people with certain types of disabilities regardless of age. There are waiting lists for many of these care programs and health services, so it’s good to apply before you need them.
Veterans’ Aid & Attendance Pension
The Veterans’ Aid and Attendance Program, which is available in California, can help cover the cost of family-provided care by supplementing the pensions of war-time veterans or their surviving spouses who need assistance with activities of daily living. While adult children and other family members are eligible to be caregivers through this program, it does not pay spouses to do so.
The VA sets income restriction guidelines, and the amount of financial assistance varies according to the beneficiary’s income. When determining eligibility, the VA also considers other expenses, which can be deducted from their countable income. This includes the cost of their care. So, your parents can pay you to provide home care services for them, and the program will reimburse them for the amount paid, in addition to their normal pension benefit amount.
Veterans must apply for this program, and those who are eligible must meet certain criteria related to the type of assistance needed, physical or mental incapacity, vision limitations, or confinement to bed.
Long-Term Care Insurance
If your parents have a long-term care insurance policy, it may provide funds to compensate you for caring for them, depending on their policy. The insurance company would pay the policyholder, rather than the caregiver. One way to get around this is to start your own home care agency and have your parents hire your agency. Then the insurance company would pay your agency.
California’s Paid Family Leave (PFL) Act
The PFL Act allows you to take time off work to care for a family member. It also stipulates that you will receive a certain percentage of your salary while caring for your loved ones. This percentage varies, but California provides up to 60 – 70% of your pay up to a maximum amount of $1,300 per week. It covers situations where the person being cared for has a serious health condition, such as an illness, injury, or physical or mental impairments, and it requires a medical provider’s certification.
This act is meant to cover short spans of time, as it allows caregivers to take up to eight weeks off from work. Eligible caregivers include parents, grandparents, siblings, spouses, children, grandchildren, and registered domestic partners. It’s important to note that your employer is not required to hold your job for you during this leave.
Direct Payment from Parents or Other Family Member(s)
If your parents or other family members have sufficient resources to cover caregiving costs, they could pay you directly. If you decide to do this, consult an elder law attorney about creating a contract that outlines your agreement. This can help prevent any miscommunications or disagreements within your family.
3. Create a personal care agreement.
As you prepare to become your parents’ primary caregiver, you will need to have a personal care agreement. This is a contract between the caregiver and the care recipient. It should include details about what personal care services you will provide, the payment amount, and the length of time the agreement covers. You should meet with an elder care attorney to go over the contract to make sure it covers all requirements.
4. Find support and training resources.
Being a family caregiver can be challenging, so it’s a good idea to look for resources within your community to help you with caregiver support and training. California’s Department of Aging offers the Family Caregiver Services Program with funds from the U.S. Administration on Aging. This program operates through California’s 33 Area Agencies on Aging (AAAs), which help family caregivers connect with local services. While this program does not pay caregivers, it does provide valuable information on training, respite care, mental health counseling, and other services directed toward family caregivers. These services are provided by AAA or through other public and private agencies.
5. Report your income.
You will need to report your caregiver income just as you would with any other paid employment because it will show up as an expense if your parents later need to apply for Medicaid. If you don’t pay taxes on this income, Medicaid will consider the amount a gift, rather than an expense, which could prevent your parents from being eligible for Medicaid.
6. Keep records.
Make sure you keep records of when you worked, the amount of compensation you received, and the types of services you performed. This is especially important if you have siblings or other family members who are involved in any decision-making regarding your parents’ care.
If you have decided to take on the responsibility of caring for your elderly parents, your finances could suffer as you reduce your hours at work, leave your job, or pay for out-of-pocket items for their care. But there are several resources available that may provide compensation for your caregiving. If your parents need to hire a caregiver, it might as well be you.