Can Family Members Get Paid for Caregiving in Kentucky?

Family members in Kentucky can get paid for providing in-home care for their loved ones in lieu of securing a room or residency in an assisted living facility. The state provides support for in-home care through the Family Caregiver Support Program as a way to allow seniors to age in place. In Kentucky, about a half million people are caring for loved ones in their or their loved ones’ homes. This requires a lot of time and, depending upon the needs, it can mean you aren’t able to secure any employment outside of this role. It’s important to know how to ease some of that potential financial burden.

One way to become a paid caregiver is to provide care for loved ones who are veterans or receive Medicaid. The Kentucky office of Veterans Affairs can process applications for four different programs. Veterans can explore Directed Care (VDC), Aid & Attendance Pension (A&A), Housebound Benefits or the Program of Comprehensive Assistance for Family Caregivers (PCAFC). Once the program has been approved, a family member or friend can be chosen and the benefits can be allocated to the person handling their care.

Similarly, Medicaid in Kentucky has self-directed services involving waiver programs for those needing long-term care. These waivers don’t always cover all expenses, so you might need to supplement in other ways. One option might be a simple agreement between you and your loved one with funds paid from sufficient money available. Another option could be long-term care insurance or leave benefits from an employer, when applicable. Regardless, lay aside any feelings of awkwardness and have open and honest communication about all aspects of your arrangement.

Caregivers often overlook taxes when caring for a loved one. One important item is the Child and Dependent Care Credit where caregivers can declare a loved one as a qualified dependent, then itemize the expenses incurred in providing care. There are maximums involved and there are certain parameters to qualify, but it will still reduce your overall taxable income. Caregivers can receive this credit on both federal and state tax returns. Kentucky offers 20% of the maximum federal credit.

Another aspect is to declare your income if you are being paid in any way as a caregiver. Services are being provided, so any money or compensation received is considered a wage and taxable. You’ll be able to offset some of your pay with expenses, but it’s critical that you keep professional records. Include details such as the specific service, date and amount paid for that service. Consult an elder care lawyer if you’re uncertain about anything, especially if an inheritance of any kind is involved.