Family Caregiver Compensation

Family caregivers often devote an incredible number of hours giving care to parents and other relatives to keep them out of a nursing home. This can not only take an emotional toll on them, but result in financial sacrifice. There are government regulations which permit compensation to family caregivers, but not to the spouse, in certain situations. There are also government programs that could pay eligible family caregivers.

The first is a written contact to provide care, for which the one needing care agrees to pay an hourly rate up to the going rate for a home health aide, which is about $22 per hour. It must be in writing and specify the kinds of care given and the rate of compensation. A verbal contract will not work under the Connecticut Medicaid regulations. The state often wishes to see a log of the types of care given and the hours.

If a parent is living in a child’s house, it is allowed to have the parent contribute a reasonable amount to the household expenses, such as heat, electricity, and food. The state allows this because the parent would have to be paying for living expenses no matter where he or she was living.

A special rule, called the caretaker child rule, says that if a child (not any other relative) lives with a parent, either in the parent’s home, or the child’s home, for a time period of at least two years and gives the care needed to keep the parent out of a nursing home that the parent can transfer the parent’s house to the child after those two years, and still qualify the parent for Medicaid. Note that it can either be in the parent’s home or the child's home, but doctor’s records must back up the claim that the parent would have been in a nursing home if the child had not been giving care.

There is a similar regulation allowing compensation to any other relative or person giving care, called the other valuable consideration rule. It says if a caregiver lives with someone needing nursing home level of care, for two years or longer, and gives the person care that kept him or her out of a nursing home for at least two years, that the equivalent value of the care can be transferred to the caregiver without any penalty.

The caregiver can receive an amount equal to the number of months of care times the average cost of a nursing home per month, which Connecticut currently says is $13,143 per month. That means 24 months, times $13,143 per month is $315,432. If it were three years it would be $473,148. That is significant. Needless to say, the state requires a great deal of proof that the care was needed, and given by the person claiming “other valuable consideration”.

There is also a Connecticut program called Adult Family Living that can pay up to $2,500 per month, tax free, to a caregiver if all of the rules are satisfied. In addition the Veterans Administration has a program that can help pay for in home care including for a family
caregiver, if the qualifications are met.

Anyone giving care should seek thorough advice from an elder law attorney so that the rules will be satisfied and tens or hundreds of thousands of dollars saved. Maybe that would be an important New Years resolution.