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5 ways you can get paid as a family caregiver

May 20, 2020

***Please note: In order to get started with the CDS program you must use a Fiscal Intermediary. FreedomCare is the #1 Fiscal Intermediary in the MO area. To see if you are eligible to get started with FreedomCare click here.

Are you a Missouri resident with a disabled or elderly family member who is in need of care? Well guess what, you can get paid to be their caregiver. This article lists 5 different options that caregivers can use to get paid for taking care of their loved ones.


Many caregivers give up a job and related employment benefits to care for loved ones without ever realizing that they can get paid for this service. Indeed, eligible caregivers can utilize these special programs in Missouri to provide higher-quality care than what their loved one could receive if they were institutionalized. This is a win win for everyone, as patients receive higher-level care while caregivers are able to afford to quit a job. 

So here are the 5 ways that you can get paid to take care of a family member.

1) Consumer Directed Services in Missouri (CDS)


The CDS program in Missouri operates through fiscal intermediaries that handle the financial reimbursements for family members who are providing care for other family members. In Missouri, roughly 29% of the population of adults have been diagnosed with some type of disability. And the proportion of elderly individuals continues to grow as well. That means that a high proportion of the population is in need of basic assistance with activities of daily living such as:


●   Personal hygiene assistance

●   Grooming

●   Bathing

●   Toileting

●   Household chores

●   Cooking

●   Cleaning

●   Shopping

●   Getting to appointments (mobility and transportation assistance)

●   Laundry assistance

●   Making sure medication is taken on time.


Residents of Missouri who meet certain requirements can make use of the Consumer Directed Services program that’s offered through the Missouri State Medicaid program. This program specifically addresses the needs of adults who are physically disabled and elderly individuals who would like to continue living at home, but need assistance to do so.


What is CDS?

Consumer Directed Services is a Medicaid program offered through the state of Missouri that assists people who are living at home and who need a Personal Care Attendant (PCA) to perform the necessary activities of daily living. This program is administered through the Missouri Division of Health and Human Services. It was designed to give Missouri residents the ability to continue living at home in their own community rather than being institutionalized. Through this program, Personal Care Attendants are paid through Medicaid and in certain situations, eligible family members can provide care to loved ones as PCAs.


Benefits of Self-Directed Services


Through CDS, a disabled or elderly individual (the consumer) can identify a caregiver and take charge of their own caregiving needs. Through this program, the consumer is able to identify high-quality caregivers and hire them for specific tasks. Medicaid pays for the services provided by the caregiver/Personal Care Attendant, which removes stress from the consumer in terms of dealing with medical bills for the caregiving services.


There are a number of important benefits to working with CDS as either a consumer or as a Personal Care Attendant:


●       The care recipient is able to continue living in an environment that is safe and comfortable despite their disability.

●       Care recipients can continue to be a part of the community and they also get to continue to continue to be a participant in their family through this program.

●       Care recipients do not need to be institutionalized as a result of their disability.

●       Relative caregivers get paid for their time and efforts at caregiving.

●       Everyone in the family can rest easier knowing that the elder or disabled individual is being cared for by a loved one rather than a stranger in an institution.

●       The elder or disabled individual continues participating in their normal, daily activities such as working, pursuing hobbies, or going to school.

●       Caregivers get to earn money while they provide care for family members or friends (Exception: spouses and legal guardians cannot collect pay for caregiving through this program).

How does CDS work?


The Missouri Division of Health and Senior Services (DHSS) evaluates each situation to determine whether or not the elder/disabled individual and the chosen caregiver meet the eligibility requirements. Recipients of care must currently be on MO HealthNet (Missouri’s Medicaid program). If the care recipient is not yet enrolled in Missouri’s Medicaid program, contact them at 855-835-3505.


Once the care recipient has successfully enrolled in the Medicaid program in Missouri, they can apply for home care through DHSS. DHSS will then schedule a home assessment and pre-screening to determine whether or not the recipient needs personal care and what level of personal care is needed. The CDS program can only function as a financial assistance option for non-medical personal care assistance.


Caregivers can expect to make around $10-11 per hour for their services in Missouri. Care assistants should be willing to assist the recipient family member with whatever personal care services are needed. Compensation is paid through a fiscal intermediary that is funded by Medicaid.


CDS Eligibility

Both care recipients and caregivers must meet certain eligibility requirements in order to participate in the Consumer Directed Services program in Missouri. First and foremost, the care recipient must be in need of assistance with daily activities due to an illness or physical disability. Familial caregiving for mental conditions like dementia are not currently reimbursed through this program.


Below are the basic eligibility requirements for the Consumer Directed Services program:



●      The prospective care recipient must be a resident of Missouri.

●      The recipient must be above 18 years of age.

●      The recipient must be unable to perform activities of daily living for themselves.

●      The recipient must not require a level of care that goes beyond what would be provided in a nursing home.

●      The recipient must be capable and willing to train caregivers to provide for their needs.

●  Though many care recipients are elderly, the CDS program accepts people of all ages.

While care recipients must meet the above requirements in order to be eligible to have Medicaid pay for a relative caregiver, Personal Care Assistants should also meet certain requirements. Through the CDS program, care recipients are responsible for determining which relatives are best suited to provide care as Personal Care Assistants, but below are some guidelines to help care recipients make wise choices when hiring a PCA:


●       The PCA should understand what tasks need to be performed and they should be capable of assisting with those tasks.

●       The PCA should ideally have some experience already as a care provider. It isn’t necessary for PCAs to have been formally employed as a caregiver. Perhaps they’ve provided care to other family members in a home setting. But it is ideal to choose a PCA who has experience providing care to others.

●       The job should be mutually beneficial for both the caregiver and the care recipient. In other words, the caregiver should feel like the arrangement suits their lifestyle and their schedule while the care recipient should feel comfortable with the caregiving arrangement because it allows them to continue on with their lives.

2) Caregiver Contracts Between Family Members

When an elder or disabled individual is no longer able to care for themselves and a family member steps up to act as a caregiver, this is a significant sacrifice. Often, these caregivers give up a job and any employment benefits that go along with it. To compensate the caregiver, the members of the family may create a caregiver contract, or a formal agreement to compensate the family member or members who are devoting time to the care recipient.


Often, while one family member provides the bulk of the care for an aging or disabled individual, the other family members also wish to contribute. But offering hands-on assistance isn’t always possible for all of the family members. So, one way of protecting both the care recipient and the caregiver is by creating a caregiver contract that specifies the details of the relationship legally in writing.


What is a caregiver contract?


A caregiver contract (also known as an elder care contract, family care contract, caregiver contract, long-term care personal support services agreement, or personal care agreement) is a binding agreement that allows non-hands-on family members the opportunity to help out by offering the hands-on family caregivers financial compensation for their efforts. A caregiver contract is typically made between or among family members to provide caregiving services. Often, this contract is made between adult children and their parents, but sometimes other relatives are involved as well.


The caregiver contract often includes a list of tasks that caregivers are required to perform for a specified level or type of compensation. The contract helps avoid conflicts that can arise when family members exchange money. Though many caregiver contracts involve just parents and their adult children, getting other family members involved can resolve potential conflicts and concerns before the agreement is signed. Resolving issues with other family members through the creation of a caregiver contract can help avoid legal problems later on in the future.


When a care recipient receives state-supported in-home care, a caregiver contract is a formal document that can be used to show the state of Missouri where the funds are going and what services are being paid for through these funds.


The 3 Basic Components of a Caregiver Contract

In order for a caregiver contract to be binding in the state of Missouri, it must meet 3 basic requirements:


●       The agreement must be in writing.

●       Payment for caregiving services must be rendered for care that will be provided in the future and not for caregiving services that have already been performed.

●       The compensation must be reasonable. In other words, caregivers should not be paid more for their services than a caregiver who works for a home care agency in the region where the care recipient is located.


Other Important Components of a Caregiver Contract

Caregiver contracts vary considerably depending on the type of care being rendered and other factors, but some of the other components that should be included in the contract include the following:


●       Date when the caregiving services will commence.

●       A detailed description of the services that will be rendered

●       Frequency with which the caregiving services will be rendered

●       Location where the services will be provided

●       The amount the caregiver will be compensated

●       The frequency with which the caregiver will be compensated

●       If the caregiver is living with the care recipient, compensation for room and board should be addressed in the contract along with living expenses for the care recipient.

●       Duration of the contract

●       Information about how the contract can be amended

●       A back-up plan for the provision of care in the event that the caregiver becomes ill, needs a vacation, or is otherwise unable to provide care

●       Signatures of all involved parties (including, if applicable, a Power of Attorney)


3) Medicaid Cash and Counseling Program, Missouri

As a Missouri resident, you can receive payment as a caregiver through the Cash and Counseling program. This is a Medicaid program that provides beneficiaries with cash assistance and the ability to self-direct the spending of that cash on caregivers of their choosing.


The Medicaid Cash and Counseling Program in Missouri is also known as the Participant Direction program, Consumer Direct Care program or Self-Directed Services. This program permits Medicaid-eligible consumers to manage their own health spending budget and decide which services they wish to receive and the manner in which they wish to receive them. The goal of the program is to increase participant’s control over their healthcare services. Through this program, family members can act as a home care agency and be hired to provide personal assistance for a disabled or aging family member.


The Cash and Counseling program is administered by the National Resource Center for Participant-Directed Services (NRCPDS). There are different types of Cash and Counseling programs available in Missouri and this program extends beyond just Medicaid.


How the Cash and Counseling Program Works

While most Cash and Counseling programs originate from Medicaid HCBS Waivers, there are other funding options that may be available to pay relative caregivers for their time in certain situations. In other words, individuals in need of care may be able to find funding to pay relative caregivers through any of the following non-Medicaid programs:


●       Veterans’ programs

●       Life insurance programs

●       Long-term care policies


Eligible family members who act as caregivers may be able to get paid for their caregiving efforts through any of these funding sources. The eligibility requirements for Cash and Counseling include the following:

●       The prospective care recipients must be in need of a certain level of care. This level of care should not be too high or too low. To be eligible for the Cash and Counseling program, prospective care recipients should need assistance primarily with activities of daily living such as bathing, toileting, dressing, or eating.

●       Prospective care recipients must meet relevant financial requirements.

●       Prospective care recipients hoping to pay family members through a life insurance policy or through a long-term care policy must meet certain requirements through their policy and in terms of their physical health.

●       Veterans may use pensions such as the Aid and Attendance benefit to pay caregivers as long as the caregiver is not a spouse.


4) Settlement of a Family Member’s Life Insurance Policy


In situations where long-term care is needed, but funding is lacking, life insurance policies can be sold for cash. These situations, which are referred to as “life settlements” can make it possible for elderly or disabled individuals to compensate family members for the provision of care when Medicaid-sponsored programs are not a possibility.


Life settlements typically involve selling a life insurance policy to a third party. The owner of the policy then receives payment in cash. The cash settlement is typically higher than the policy’s surrender value but lower than the death benefit. The third party who purchases the policy assumes payment of future premiums and they receive the benefit amount when the original policyholder passes away.

This type of arrangement is often used to provide the necessary funds to cover the cost of caregiving services by a family member. Most prospective care recipients who choose this option, have a life insurance policy with a face value that’s higher than $100,000 and often, they’re over 65 years old.

Life settlements are not as popular as Consumer Directed Services because there are some potential drawbacks to selling an insurance policy for cash. Drawbacks include:

●       Tax-related consequences

●       Medicaid eligibility issues

●       Loss of privacy regarding personal health information

●       Inability to get a life insurance policy in the future

●       Much higher life insurance premiums if the consumer decides to get a new policy in the future

How to Get Cash for a Life Settlement

Getting cash for the sale of a life insurance policy involves either a broker or a life-settlement provider. Deal only with licensed, authorized insurance providers in Missouri and consult with an attorney before making your final decision about the terms of the settlement.

5) IRS Tax Credits for Family Caregivers

There are specific IRS tax credits that families can claim if they spend more than $5000 per year on caregiving that is unreimbursed through another program. IRS tax credits may be an untapped source of funds that can be used by family members to provide personal care to elderly or disabled loved ones. Tax credits differ from tax deductions in that tax deductions reduce your taxable income. Tax credits, in contrast, are taken directly out of the final balance of the taxes that you owe. If you provide care to a blood-relative, spouse, adopted child, or dependent children, you are eligible to claim tax credits to ease the financial burden of caregiving.


Below are some of the tax credits that you can claim to ease the financial burden of providing hands-on care for a family member:


●       Claim the disabled or elderly individual as a dependent family member.


A dependent who doesn’t qualify for the child tax credit may still make you eligible to receive a $500 credit at tax season.


●       Medical expense deduction.

When medical expenses for all of your dependents (including a dependent spouse, blood-relative, or child) exceeds 7.5% of your adjusted gross income (AGI), you become eligible to deduct the unreimbursed costs from your taxes.


●       Credit for Caring Act


In 2017, the U.S. House of Representatives and the Senate proposed a bi-partisan bill called the Credit for Caring Act. This bill was created to provide a special credit for family members who provide caregiving services to loved ones. Eligible recipients allow a tax credit for 30% of the long-term care expenses between $2000 (minimum) and $3000 (maximum) that are incurred in one year. In order to be eligible, the taxpayer must have more than $7500 in taxable income and the expenses related to the long-term care of a dependent relative must be over $2000.


This bill requires that a health care practitioner certify that the caregiving family member is assisting their loved one with certain physical and cognitive needs. To be eligible, caregivers would have to document their expenses, but it would not be necessary for the caregiver to live with the care recipient.


This bill has not yet been signed into a law, so check back often to follow its progress.