Medicaid is a federal and state program that helps with healthcare costs for people with minimal income and resources. Additionally, Medicaid offers benefits not usually covered by Medicare, like nursing home care and personal care services. Your loved one must enroll with Medicaid to receive specific state-based support services, such as a Medicaid Waiver.
Medicaid state plans, also known as regular Medicaid, are one option for becoming a paid caregiver for a loved one. Every state has a state Medicaid plan, but many use alternative names for their Medicaid programs. In addition to the alternative names, some states refer to their Medicaid program as their State Plan or Title XIX.
The HCBS State Plan Option lets states offer home and community-based services through their state Medicaid plan, and applicants do not need to require a nursing home level of care. Through the HCBS State Plan Option, care plans are created based on individualized needs, and in some cases, budgets can also be given to program participants so they can manage their care.
Community First Choice, or the 1915 (k) state plan option, allows program participants who require the same level of care as a nursing home to receive personal attendant services through the state Medicaid plan. There is an option for self-direction and the possibility of agency-provided long-term care, so program recipients can hire a friend or family member to provide their personal care services.
The self-directed personal assistance services state plan option lets participants choose, train, and manage their choice of personal care assistant, including the pay rate they would like to pay their caregivers. Participants collaborate with fiscal intermediaries to handle the employment portion of hiring caregivers.
Adult foster care, also known as adult family living or adult family care, is another Medicaid option. Medicaid doesn't cover room and board for an adult foster home, but it does provide financial assistance for the cost of care assistance. You cannot use an adult foster care home to become a paid caregiver of your spouse, but a parent may move in with their adult child who provides a foster home.
The caretaker child exception is an exemption to allow an adult child to be paid for providing care to an aging parent. Payment is not in the form of financial assistance; instead, the parent's home is transferred to the adult child as a payment method. If the transfer is not done correctly or all requirements are not met, it can violate Medicaid's look-back rule, resulting in a period of Medicaid ineligibility.
Other state programs exist independently of Medicaid and can be accessed separately or in addition to Medicaid assistance to help pay for or reduce the cost of caring for an elderly loved one.
The Veteran Directed Care (VDC) program allows veterans to choose how to direct their monthly care budget. The family caregiver is paid an hourly rate determined by the VA, typically around $8-$21 per hour. These programs are at various stages of development in different states, and it is recommended that the applicant checks with their local Area Agency on Aging to determine final eligibility.
The Veterans Aid and Attendance benefit help offset the rising costs of long-term elder care like assisted living facilities, home care aids, or adult daycare. The A&A Pension is for Veterans over 65 years old who require assistance with daily living activities, providing up to $3,261 per month in support. A&A is an add-on benefit that requires eligibility for the basic VA pension or survivor pension, as well as meeting a disability requirement.
The Housebound Pension benefit is for veterans who are primarily unable to leave their homes and can be used to pay family caregivers similar to the A&A benefit. The Housebound Pension can be worth up to $1,882 per month, but Veterans cannot get A&A and Housebound benefits simultaneously. Learn more here.
The PCAFC is the VA's broadest program targeting family caregivers. The program provides family caregivers with a stipend of up to $2,750 per month in addition to training, counseling, and respite care. To qualify, the Veteran must have been critically hurt or had a severe illness in the line of duty and require help with at least one activity of daily living.
The VA Dependent Parent Benefit is for veterans who are partially disabled, who receive disability income, and who have a parent who relies on them for financial support. This benefit is paid directly to the Veteran and can be used as they see fit. To apply for this benefit, a Veteran must fill out VA Form 21-509 and submit it to the regional VA office in their area.
Respite Care provides trained caregivers to give the informal or unpaid caregiver of a Veteran a break. Depending on location and preference, care can be provided in the home, in a VA medical or community living center, or adult day care. Respite care is not designed to be a long-term solution for care, but it may make a difference when choosing between residential and home care.
TRICARE is a regionally managed health insurance and care program for active or retired members (at least 20 years of service) and families of all seven uniformed services provided by the U.S. Department of Defense (DoD). TRICARE for Life is an extension of TRICARE for seniors enrolled in Medicare that covers Medicare's co-insurance and deductibles to minimize the military retiree's out-of-pocket expenses by covering Medicare's co-insurance and deductibles. To learn more about TRICARE for Life, click here.
Most people are taxpayers, so the government often gives financial assistance by helping out with taxes. Unless you know what you're entitled to or work with someone who does, you may miss out. Tax Credits are credits applied to the taxes you owe. For example, if you owe $4,000 in taxes but find a credit of $500, you only have to pay $3,500.
Parents or other guardians that list dependents on their federal tax filings can receive up to $2,000 for each applicable dependent. Unlike most tax credits, these are fully refundable, so you can obtain the money even if you have no outstanding taxes. To accept these credits, one must meet specific income regulations. Additional information is available here to learn more and assess your qualifications for one of these tax credits.
The child and dependent care credit is a tax credit that can help pay for the care of eligible children and other dependents. If you paid someone else to care for your dependent or child while at work, looking for work, or attending school, you could earn a tax credit of up to $8,000 of what you paid for care based on your income and how much you spent, even if you owed no taxes. To assess your eligibility, click here.
Note: The Child and Dependent Care Credit is also referred to as the Elderly Dependent Care Credit or the Aging Parent Tax Credit.
There are also State Tax Credits for Elderly Dependent Care Expenses which are state versions of the Federal Child and Dependent Care Tax Credit (CDCTC).
Medical and dental expenses can be deducted if you spend more than 7.5% of your adjusted gross income on them. Of course, tax deductions are not a source of funds for caregivers, but a reduced tax burden can help you re-allocate resources to cover the cost of care elsewhere. Families can use Form 2441 to claim the dependent credit and Schedule A for the medical deduction.
Givers offers a tax filing experience made just for people who are caring for their loved ones. In a matter of minutes, you can file your taxes and ensure you don't miss out on any federal or state tax savings.
Learn about the Givers Tax Filing experience here.
The Tax Credit for the Elderly and Disabled is for people over 65 years old or people under 65 who retired on permanent and total disability and who received taxable disability income during the year. Complete Schedule R when you file your federal return to claim this credit.
Potential annual savings: $7,500
Based on: Your state's regulations around payment of medicaid dollars to a family caregiver.
Potential annual savings: $33,000
Based on: Your loved one's service record and monthly budget from the VA.
Potential annual savings: $1,700
Based on: Your income and amount spent on providing care in a year.
Potential annual savings: $500
Based on: Your state's matching of the federal Dependent Care Tax credit.