Family Caregiver – Ways to Get Paid

Posted by MoneySavvy on Jun 14th, 2010 | no comments home title

Many people don’t even realize they are caregivers. But the truth is that you are technically a caregiver even if you just purchase food for the parent or relative.

In this instance you probably won’t be worried about compensation. But in some cases, the dependent might need so much care that it takes away much of your income. Then you will have to supplement your lost livelihood somehow.

So can you get paid for caregiving? In certain instances, yes you can.

How? There are a number of ways. For instance, the person you are caring for might be eligible for Medicaid. This will essentially pay you a certain amount for looking after them. It won’t be much, but it will help.

Federal assistance

There are plenty of other government programs you can look into. Which you qualify for really depends on the specific financial situation as well as your location.

This is because there are local and state programs in addition to national programs to help out the elderly. There are too many programs to list here, so you need to educate yourself on the ones you may qualify for.

But do you qualify?

If your parent or relative has a limited income and doesn’t have a lot of valuable possessions, they might be able to get Medicaid. And also look into the cash and counselling program. This is part of Medicaid and is available for certain states.

Get paid a salary by the caregivee

This is one of the more popular options. In this case you will want to draw up some sort of legal agreement in which you are to get paid by the person you are looking after.

Why do you need a legal document?

Even if you trust them, this is still critical. For one thing, it can help to prevent possible legal issues down the road with your siblings. It basically gets them on board with the money you are being paid, because they will have to agree on it beforehand.

It also requires the parent or relative you are caring for to pay you, something they wouldn’t be under legal obligation to do otherwise. And don’t forget, without this paper saying you are legally entitled to the money, the IRS might think the person you are looking after is simply hiding their income.

This would obviously give them tax benefits and possibly help them qualify for Medicare. But by being paid this gives you a legal right to claim that money, which means it is tax deductible for the caregivee.

Can health insurance pay you?

In certain instances it will. But the parent or relative must have long-term care insurance. This covers them in the event they have someone helping them with daily tasks. However, it will only cover you after you’ve taken a course on “caregiving.” These are often available at local hospitals.

Tax returns

This won’t make you a lot of money, but it can help a little when combined with the above methods.

How does it work? Assuming you covered a good percentage of their expenses for the past year and their income is below a certain point, you could claim them as a dependent. In this case, you’d get some money back on your tax return. Obviously you need to discuss this with a tax professional to see if it applies in your situation.

The bottom line is you can and should get compensated for your good deed. Hopefully this article has given you insight into the many possible ways this can happen.