If you are reading this article, you may be looking for ways to help cut down or address caregiving costs. It doesn’t matter if you’re at the beginning, starting out on your caregiving duties, or if you feel like caregiving tasks have become somehow insurmountable or trickier to navigate.
Jump ahead to these sections:
- A Word About Social Security: Social Security Disability Insurance and Supplemental Security Income
- Social Security Disability Insurance (SSDI)
- Will Social Security Disability Insurance Pay For A Caregiver?
- Supplemental Security Income (SSI)
- Will Supplemental Security Income Pay For A Caregiver?
- Will Traditional Social Security Pay For A Caregiver?
- Will Social Security Pay for Other Costs Associated With Caregiving?
- Other Caregiver and Caregiving Cost Resources
Like with most finances, piecing together a manageable in-home care budget is part detective work and part homework. It will take knowing what is available first, and then applying for anything and everything you think might help you pay for caregiving costs.
According to AARP, an unpaid family caregiver can expect to pay up to 20 percent of their income on caregiving-related costs. It is common for a caregiver to leave the workforce altogether to help care for a loved one. In addition to the lost income, there may be a negative impact on eventual social security benefits as well.
As you can see, long-term caregiving can also have long-term financial consequences.
A Word About Social Security: Social Security Disability Insurance and Supplemental Security Income
Social security benefits are complicated. Most people are familiar with traditional social security benefits that anyone who has worked long enough will be eligible for when they reach age 62. This is considered a retirement benefit.
There are two other social security benefits as well: Social Security Disability Insurance and Supplemental Security Income, better known as SSDI and SSI. To know whether SSDI or SSI can help you pay for caregiving, it is important to understand the federal requirements to qualify and the differences between the two.
The source of information to help you determine benefits for any of these programs is the Social Security Administration. Their site is where you can determine your expected retirement benefits and apply for social security disability benefits or supplemental security income. Some people opt to hire a disability attorney who specializes in these benefits to assist with determining eligibility.
Social Security Disability Insurance (SSDI)
To qualify for social security disability insurance you must meet the following criteria:
- You have to have worked a specified amount of time in jobs approved by the Social Security Administration. In other words, you have paid social security taxes.
- You have to have a medical disability that meets the Social Security Administration’s definition of disabled. The medical condition has to be so severe that you are unable to work.
- The Social Security Administration has a comprehensive list of medical conditions that qualify, including but not limited to ALS, cancer, heart conditions, Cerebral Palsy, Multiple Sclerosis, and many others. In addition, certain mental health problems also qualify including, but not limited to, schizophrenia, intellectual disorders, psychotic disorders, autism, etc.
- Your disability is expected to last more than a year or lead to death. The Social Security Administration updates its qualifying disability list continuously. You may need to work with your doctor and an attorney to see if you qualify under the current criteria.
- The more you earn, the higher your disability benefit will be up to a certain limit.
- Eligible family members can receive benefits based on your work record. A spouse or child could receive as much as 50 percent of your monthly benefit. After you receive SSDI benefits for two years, you become eligible for Medicare.
Will Social Security Disability Insurance Pay For A Caregiver?
SSDI will not pay for caregiving directly except in the case where the recipient uses the monthly benefit to pay someone privately. A family member caring for someone who is disabled may qualify for either SSDI or SSI.
However, there are some other cases where other folks may receive money or the recipient could use it to pay for a caregiver. Here are some possibilities:
- The spouse of the disabled person, should they meet certain requirements (mainly, 62 years of age), are also eligible to receive financial assistance. They may have been financially dependent on the now disabled person. The spouse receives that assistance regardless of whether they provide care to their disabled spouse, and the amount they receive does not increase if they provide care.
- The other option is for the disabled person to use their funds to pay a family caregiver. You and your disabled family member can put together a care contract so that you can receive funds for caregiving. It is recommended to speak with an attorney to make sure your contract is legal.
When in doubt, consult with a representative from your local Social Security office to determine your eligibility.
Supplemental Security Income (SSI)
SSI pays benefits to disabled adults and children who have limited income and resources. SSI benefits also are payable to people 65 and older without disabilities who meet the financial criteria.
In order to qualify, SSI is need-based and requires a review of financial details, personal information, and medical records. The big difference with SSI is that there are no work credits necessary to qualify. Work credits can be “obtained” by making the minimum amount yearly income made required for social security eligibility.
With Supplemental Security Income, the program is income-based only. As a result, it is possible to qualify for all three programs mentioned above: social security retirement benefits, SSI, and SSDI.
Will Supplemental Security Income Pay For A Caregiver?
Supplemental Security Income will not pay a caregiver directly. Again, you can consider using the funds you receive to pay a company that provides care staff or put together a contract for services with a family member.
Since SSI is an income-based program, many people may qualify for a state Medicaid program as well. Medicaid is a joint state and federal program that is income-based. Each state has its own criteria for qualification, but Medicaid does offer caregiver benefits under certain conditions.
Most people think of Medicaid as the financial resource that pays for long-term care in a nursing home. Many states have programs specifically designed to keep people out of nursing homes and pay for care in the home instead.
These are sometimes called Medicaid Waiver programs. Depending on the state where you live, these services might be available if you qualify for Medicaid:
- In-home health care
- Personal care services, such as help bathing, eating, and moving
- Home care services, including help with household chores, like shopping or laundry
- Caregiver support
- Minor modifications to the home to make it accessible
- Medical equipment
In most states, it is possible for family members to get paid for providing care to someone on Medicaid. The applicant must apply for Medicaid and select a program that allows the recipient to choose his or her own caregiver, often called "consumer-directed care.” These state programs go under different titles: Medicaid HCBS Waivers, Medicaid State Plan Personal Care programs, and even non-Medicaid state-funded assistance programs.
Medicaid may also pay for ongoing caregiving assistance including:
- Basic cleaning and laundry tasks
- Meal preparation or delivery
- Transportation to and from medical appointments
- Personal care services, including dressing and bathing
- Minor modifications, like adding a wheelchair ramp or widening a doorway
- Durable medical equipment
Will Traditional Social Security Pay For A Caregiver?
Retirement social security will not pay a caregiver directly. However, depending on your earnings amount through your working lifetime, and when you decide to take your social security income, you may make enough to pay for a caregiver.
It all depends on your other retirement income and caregiving needs. Meeting with an estate planning attorney can help you sort out long-term caregiving costs and help you find ways to pay for it.
Will Social Security Pay for Other Costs Associated With Caregiving?
Social security does not directly pay for other costs associated with caregiving except as you may use the income benefit to defray those costs.
Other caregiving costs include, but are not limited to, durable medical equipment, home accessibility modifications, medications, and personal care supplies.
Similarly, Social Security also pays what's known as a death benefit after your death. This is a lump-sum, one-time payment to a surviving spouse or child. These funds can go towards paying for burial or funeral costs, depending on the family's needs. This includes virtual funerals through providers like GatheringUs.
Post-planning tip: If you are the executor for a deceased loved one, the emotional and technical aspects of handling their unfinished business can be overwhelming without a way to organize your process. We have a post-loss checklist that will help you ensure that your loved one's family, estate, and other affairs are taken care of.
Other Caregiver and Caregiving Cost Resources
If you don’t qualify for SSDI or SSI and don’t want to take early social security retirement benefits, here are some other possible sources of assistance to consider:
- VA Benefits. If you or your spouse has been in the military, you may be eligible for in-home caregiver services or reimbursement through the VA.
- Long-term Care Insurance. Some families opt to purchase long-term care insurance to help pay for the cost of in-home, assisted living, or nursing care.
- National Council on Aging. The National Council on Aging has a Benefits CheckUp Program where you put in your zip code to find financial resources in your area.
- Area Agencies on Aging. Your Area Agency on Aging will have a wealth of information on caregiver support programs. A good place to start to find your location is the National Association of Area Agencies on Aging. Your Area Agency on Aging may also have reduced fee attorneys who can help determine social security benefits.
Paying for Caregiver and Other Caregiving Costs with Social Security
As you have most likely figured out, it is a jungle out there. Understanding social security and how it might help can be very complicated. Finding a good benefits attorney, although costly at first (and there is a limit to what a disability attorney can charge), may save you money in the end by qualifying you for benefits you didn’t know were available.
It takes some work to find out, but researching can help you and your loved one understand what is out there.
- “Explore The Benefits You May Be Due.” Social Security Administration. www.ssa.gov/potentialentitlement/
- “Surprising Out of Pocket Costs For Caregivers.” AARP. www.aarp.org/caregiving/financial-legal/info-2019/out-of-pocket-costs.html
- “VA Caregiver Support.” U.S. Department of Veterans Affairs. www.caregiver.va.gov/
- “Benefits CheckUp.” National Council on Aging. www.benefitscheckup.org/
- National Association of Area Agencies on Aging. www.n4a.org/eldercarelocator