Paying Spouses to Care for Their Elderly or Disabled Partners – Medicare, Medicaid, VA & Other Options

Page Reviewed / Updated - Jun. 2019

Introduction

The short answer to the question, “Can I be paid as a caregiver for my spouse,” is yes. Unfortunately, the long answer is considerably more complicated, and it starts with, “Well, that depends.” There are several different programs, or funding sources, that exist that can pay spouses as caregivers. Eligibility depends on a number of factors, such as one’s state of residence, one’s income and financial assets, the types of insurance one has and if either the caregiver or their spouse are veterans. There are also many misperceptions about which programs offer spousal pay. These are addressed in aggregate further in this article, but the most common will be addressed in this introduction. Medicare does not pay spouses to care for their elderly or disabled partners.

 If you are seeking to be paid as a caregiver for a loved one, but are not married to them, they are many additional options.  Use our Paid Caregiver Program Locator to find them. 
Medicare’s Policy

Medicare’s policy towards spousal pay is very clear. Medicare does not pay spouses to provide personal care or assistance with activities of daily living for their husbands or wives. Medicare does not cover personal (non-medical) care for any of its beneficiaries. Despite having a clear policy, there continues to be strong misperceptions surrounding this topic. It is likely these stem from an extremely rare circumstance where a spouse is married to a practicing doctor, and Medicare has approved the spouse for home healthcare visits. In this situation, a doctor may be compensated for providing medical care for his or her spouse, but not for personal care.

State Programs (Medicaid & Non-Medicaid)

As of the most recent update (June 2019), our research has found fifteen states whose public assistance programs allow for spouses to be paid caregivers. This benefit, while far from being available in all fifty states, is fortunately available to a considerable percentage of the nation population, as these states disproportionately represent approximately 42%. There are several different types of state programs that allow families this option. These include Medicaid HCBS Waivers, Medicaid State Plan Personal Care programs, and even non-Medicaid state funded assistance program.

Prior to listing the states and programs, it is best to discuss how paying spouses actually works. Each of the programs that follow, allow for consumer direction of services, which means the “consumer” or beneficiary has the option to “direct” from whom they receive their care services. To clarify, they are allowed to choose whomever they would like, provided that individual meets the program’s requirements (physical ability, background check, etc.). Therefore, they can elect to hire their spouses as personal care providers. Their spouses, if approved, are paid by the state program or through an intermediary agency. Compensation rates vary by program and state. Typically, caregiver spouses are paid between $10.75 - $20.75 / hour.

In general terms, to be eligible as a care recipient for these programs, applicants are limited to approximately $27,756 per year in income, and most programs limit the value of their countable assets to less than $2,000. Worth noting is that countable assets do not include the value of their home. However, since these care recipients are married, they can likely allocate some of their joint assets to the non-applicant spouse in order to qualify for the program. (This is known as the community spouse resource allowance.) Detailed eligibility information is available at specific program links in the table below.

State Programs that Pay Spouses as Caregivers (updated April 2018)
State Program Description
Arizona Self Directed Attendant Care (SDAC) Medicaid program hires spouse through an agency
California In Home Supportive Services (IHSS) Community First Choice state plan option available statewide
Colorado Consumer Directed Attendant Support Services (CDASS) Program Medicaid program option available statewide under the Medicaid Waiver for the Elderly, Blind and Disabled
Delaware Diamond State Health Plan – Plus Medicaid managed care program
Florida Statewide Medicaid Managed Care Long-Term Care Program Medicaid managed care program
Kentucky Hart Supported Living Program Home and Community Based Services Waiver for Aged and Disabled Non-Medicaid, state funded program Medicaid waiver available statewide
Louisiana Community Choices Waiver Medicaid waiver available statewide
Minnesota Alternative Care Program Elderly Waiver Consumer Support Grant Program Non-Medicaid, state funded program Medicaid waiver available statewide A non-Medicaid program available in limited areas of the state. While care services are not provided, monthly cash grants are given to pay for home care and supports.
Montana Big Sky / Home and Community Based Services Waiver Medicaid waiver available statewide
New Jersey Medicaid Managed Long Term Services and Support and the New Jersey Assistance for Community Caregivers Medicaid managed care program and non-Medicaid, state funded program
North Dakota Family Personal Care under the Aged and Disabled Waiver Medicaid waiver available statewide
Oklahoma Advantage Program Medicaid waiver available statewide
Oregon Spousal Pay Program, Independent Choices Program,  and K Plan / Community First Choice Three Medicaid programs available statewide
Texas Client Managed Personal Attendant Services (CMPAS) under the Community Care for the Aged / Disabled Program Non-Medicaid program available statewide
Vermont Global Commitment to Health Waiver 1115 Demonstration Medicaid waiver available statewide
Veterans Options

Veterans-Directed Care
This program, which is also referred to as Veterans Directed Home and Community Based Services (VD-HCBS), gives participating veterans the flexibility to choose their own care providers. Family members, including spouses, can be hired as personal care providers. The Veteran’s Health Administration sets the hourly rate that personal care providers are paid, which is estimated at $8.00- $22.00, depending on the geographic area of the country. Not all veterans are eligible. Veterans must be enrolled in the VHA Standard Medical Benefits package, have a medical need, and must live in certain geographic areas of the country in which the program is offered. Read more about eligibility and locations here.

VA Caregiver Support
This program, also referred to as the Program of Comprehensive Assistance for Family Caregivers, allows spouses to receive a monthly stipend to provide care for their veteran partners. However, it is less relevant to the elderly, as veterans must have been injured in the line of duty following Sept. 11, 2001. More information.

It should be mentioned here that VA Pensions, such as Aid & Attendance, cannot be used to pay spouses. This is discussed in greater detail under Misperceptions.

Long Term Care Insurance

In some circumstances, long term care insurance policies can be used to pay spouses for caregiving, but much is dependent on the specific policy’s rules. For example, the policy must cover non-medical, personal care provided at home. If a policy pays out cash benefits directly to the policyholder, there would be no need to pay a spouse, since the spouse is already sharing in the benefits. However, if the policy’s rules state that they will only pay out to licensed care providers, then a couple might want to pursue this option. There are multiple steps involved in this process. The caregiving spouse may need to become a licensed non-medical, home care provider and register with their state. Their newly formed home care agency is hired by the care recipient. Once care is provided, they invoice for their hours, and those invoices are sent to the long term care insurance company for payment. Though initially logistically challenging, this option can bring significant income to a caregiving spouse over the long term. Long term care policyholders who’d like assistance establishing this arrangement should contact us to be connected with an expert.

Life Insurance Policies

Most medium to high value life insurance policies can be converted to a form which can be used to pay an individual who provides care for his or her husband or wife. Furthermore, this conversion can be structured in a way to preserve the option to receive Medicaid assistance in the future. Unfortunately, this process is complicated, and to understand how this works requires some background information.

Life insurance policies can be sold prior to the policyholder passing away. The policyholder collects a percentage of the policy’s death benefit and a third party buyer takes over paying the monthly premiums and collects the full death benefit upon the former policyholder’s passing. This is referred to as a “life settlement.” A specific type of life settlement, sometimes called a “Medicaid life settlement,” utilizes a third party administrator to ensure the proceeds from the policy sale are only spent on providing care (thereby not violating Medicaid eligibility rules). The spouse who provides care forms a small business, a home care agency which serves one client, their spouse. The third party administrator pays the caregiving spouse from the proceeds of the life settlement.

To be eligible, a policy must have a minimum face value of $50,000. To learn more about this approach, read about Medicaid Life Settlements.

Paid Family Leave Acts

Currently, four states offer paid family leave in order to care for a spouse. These are New Jersey, Rhode Island, New York, and California. All of these programs are intended to allow spouses to care for their partners for short periods of time, usually between 4 – 12 weeks. While doing so, they continue to receive a significant percentage of their salary. It is possible to manipulate the paid leave so that instead of taking continuous leave, one takes partial leave on an ongoing basis. For example, New Jersey offers 6 weeks or 42 days of leave, and it is possible to take one day each week for 42 weeks. Benefits and eligibility differ with each state. Follow the state links below, to learn more.

California
New Jersey
Rhode Island
New York

Starting in July of 2020, Washington DC will also be offering spousal pay through the DC Universal Paid Leave Act. In addition, the state of Washington will be implementing a Paid Family and Medical Leave program, which is set to be available in January of 2020.

Misperceptions

The most common misperception is that Medicare will pay spouses. As discussed previously, this is not the case.

Reverse Mortgages

Using a reverse mortgage to pay a husband or wife to provide care for their partner is possible, but doing so does not make strong economic sense. A reverse mortgage essentially takes an existing, non-liquid asset a couple has, and converts that asset into a cash stream. A caregiving spouse could form a home care agency and that cash stream could be used to pay the spouse / agency for their services. However, they would then be required to pay income taxes on the proceeds. Were the couple to simply take the reverse mortgage proceeds, the proceeds would be considered a loan, and therefore would not be taxable.

Aid & Attendance and Other VA Pensions

Unfortunately, the Aid & Attendance, Housebound, and Basic Pensions offered by the VA cannot be used to pay a husband or wife to provide care for their spouse. The reason for this is because the VA calculates income for a pensioner as household income. Therefore, any payments made to the caregiving spouse would increase the couple’s household income, and their VA Pension benefit would be reduced by that same amount. Other family members can be paid as caregivers since their incomes will not be considered as part of the household income. Read more.

Social Security Disability Insurance (SSDI)

If one is unable to work because of a disability (as designated by Social Security), they are offered financial assistance. Their spouse, should they meet certain requirements (mainly, 62 years of age), is also eligible to receive financial assistance as they may have been financially dependent on the now disabled person. However, the spouse receives that assistance regardless of if they provide care to their disabled spouse, and the amount they receive does not increase if they provide care.

Supplemental Security Income (SSI)

SSI is a financial assistance program for low income persons with limited financial assets. The monthly benefits increase for married couples, but that increase is not dependent on one spouse providing care for their other.

Family & Medical Leave Act

This act, often abbreviate FMLA, does not provide financial assistance to care for one’s spouse. It does, however, permit spouses to take time off from their jobs without fear of losing their jobs, or their health insurance associated with their employment. Read more.