Financial Help for Caregivers: Your Guide

Family caregivers provide an invaluable service by providing home care for their loved ones. They often work and earn less, or stop working entirely, to care for a loved one. While often rewarding, this role can be stressful and overwhelming. 

One of the biggest burdens of caregiving is financial. Many caregivers earn less than they would if they weren’t providing care. They also often pay for care costs out of pocket. 

This guide outlines the financial issues many caregivers face and describes several resources for financial assistance programs. 

For more information on all topics related to caregiving responsibilities and support, check if you have free access to our resource library and community of caregivers.

The Financial Burden Of Caregiving

Millions of Americans provide care for family members, mostly unpaid. According to a study conducted by Columbia University, there are 45 million unpaid caregivers in the U.S. Their unpaid labor is worth about $874 billion per year. About 40% of this cost is related to care for dementia patients. 

The study found that about 61% of these caregivers are also working. Younger caregivers are at particular risk for financial difficulties. They’re more likely to spend money on care costs than to save for retirement. Women also face more financial burden than men, as they make up more of the caregiving population. 

According to an AARP report on care, most family caregivers want to care for their loved ones. They don’t resent their role, but they struggle to find time for themselves. More than 60% of these unpaid caregivers also work part-time or full-time. They spend an average of $7,242 or 26% of their income annually on care-related activities.

Most family caregivers can benefit from financial assistance. There are many resources available to pay caregivers, offset the costs of structured family caregiving, or provide other benefits, such as financial assistance with medical devices or equipment. 

Getting Paid Through Medicaid

Medicaid allows eligible family caregivers to be paid for their work caring for a loved one. Medicaid programs are administered by each state, so there are differences, but all states offer self-directed care. 

Self-directed care is a model for long term care for older and disabled adults. It gives the care recipient more autonomy and control over how they receive care. If your loved one is eligible for Medicaid, they can select you as their paid caregiver. 

Traditionally, Medicaid pays for long term care for recipients in institutions. The introduction of Home and Community-Based Services (HCBS) waivers allowed individuals to receive benefits at home and within their communities. 

The HCBS waiver program and self-directed care allow family members to be paid for personal care, housekeeping, and other types of home care for their loved ones. 

State Programs

Medicaid is administered through state agencies. If your care recipient doesn’t qualify for Medicaid benefits, there may be other programs in your state that can help pay for a family caregiver or offset some caregiving costs. 

For example, Texas has a state-funded program called Community Care for Age/Disabled. The program is similar to Medicaid’s. It allows care recipients to designate a family member as a caregiver to be paid for the services they provide. A third party manages payments between the state and the caregiver. Check with your relevant state agency to learn more about available programs. 

Social Security Programs

Social security offers a few options for benefits to qualifying individuals. One option is Supplemental Security Income (SSI). SSI provides monthly payments to qualifying individuals with low income. They must be 65 or older, be blind, or have a medical condition that prevents them from working for a year or more. 

Social Security Disability Insurance (SSDI) is a monthly financial benefit for qualified disabled individuals. The disability must limit or prevent them from working. Check with your local Social Security office to find out if your loved one qualifies for either of these programs. They can use the benefits to pay for care. 

Tax Credits

If you are a family caregiver, make sure you’re taking full advantage of available tax credits. These can help reduce the financial burden of providing care. Your loved one might be considered a dependent, qualifying you for the dependent tax credit. 

Another option is the child and dependent care credit. You can claim this credit if you work and sometimes need to pay another caregiver. Both credits can be applied to adults who are your dependents. 

A bill recently introduced to Congress could eventually provide additional tax credits to family caregivers. If passed, the Credit for Caring Act would allow eligible caregivers to get up to $5,000 in tax credits. The act has bipartisan and broad voter support. 

Long Term Care Insurance & Life Insurance

If your loved one has long term care insurance, check to see if it includes benefits to help offset the costs of care by a family member. Some policies allow family members to become paid caregivers for their loved ones. 

A life insurance policy is another potential source of financial support. Some policies allow you to access benefits before the policyholder has passed away. 

For example, an accelerated death benefit allows the individual to access some of the benefits if they have been diagnosed with a terminal illness. This money can be used to pay for a family caregiver. 

If their policy doesn’t include this benefit, they may be able to sell the policy. Settlement companies facilitate these sales. The original beneficiary will not receive the death benefit, but the immediate cash can help pay for caregiving costs. 

Family And Medical Leave Act & Paid Family Leave

Many family caregivers are trying to balance work with care duties. A federal law known as the Family and Medical Leave Act (FMLA) allows eligible employees to take job-protected leave to care for a loved one. This is unpaid leave, but it does allow the worker to return to their job. 

FMLA can be useful for caregivers who need some time off for care but can’t afford to leave their jobs permanently. The law allows for up to 12 weeks of unpaid leave within a 12-month period. This extends to 26 weeks for a covered servicemember. 

Several states have paid family leave laws. Eligible workers can take time off for care duties while still getting paid. Most of these programs fund payments through a social insurance policy system. Check with your relevant state agency to see if it has paid family leave and if you’re eligible. 

Veterans Affairs Programs

The U.S. Department of Veterans Affairs (VA) offers several programs to help cover home care and personal care costs. If your care recipient is a veteran, they might qualify for one or more of these VA caregiver support programs:

Veteran Directed Care Program

Like Medicaid, the VA has moved toward self-directed care services for veterans to give individuals more agency and control. Also known as the Program of Comprehensive Assistance for Family Caregivers, it allows eligible veterans to appoint one primary family caregiver and up to two secondary family caregivers. 

The primary caregiver receives a monthly stipend and health care benefits. Both the primary and secondary caregivers are eligible for free caregiver training, mental health care, and benefits for traveling with the care recipient for medical care. 

Qualifying veterans have a disability rating of 70% or higher. They must have been discharged from the military and need six months or more of continuous care. They must also be enrolled in VA health care.

Aid And Attendance Benefits & Housebound Allowance

Veterans who need daily personal care or are confined to bed for most of the day may qualify for Aid and Attendance benefits. These are monthly payments in addition to pension benefits. They can be used to pay a family caregiver. Housebound benefits have similar requirements and can be used in the same way. 

Respite Care

Family caregivers of veterans may qualify for paid respite care. The VA pays for short breaks for caregivers. Home respite care covers the cost of a caregiver coming into the home for respite or the cost of adult day care services for the care recipient. 

VA respite care benefits are for veterans who need comprehensive assistance with the activities of daily living or who are isolated in the home due to disabilities. It allows caregivers who otherwise struggle to pay for respite to get the breaks they need. 

National Family Caregiver Support Programs

The National Family Caregiver Support Program (NFCSP) provides states and territories with grants that fund programs for family caregivers. The funding is based on the percentage of the population over the age of 70. The older the population, the more grants the state receives. 

These are the eligibility requirements for NFCSP programs:

• Family caregivers and other informal caregivers caring for loved ones aged 60 and older
• Caregivers providing care for someone of any age with dementia or Alzheimer’s disease
• Family caregivers aged 55 and older providing care to children under 18
• Family caregivers aged 55 and older caring for adults aged 18 to 59 with disabilities

NFSP grants include five types of support services: 

• Providing caregivers with information about available services
• Helping caregivers access those services
• Respite care
• Supplemental services
• Counseling, caregiver support groups, and caregiver training

The grants are used in combination with other community and state services to help create a package of support that meets the unique needs of a qualifying family. 

Area Agencies On Aging

Your local AAA can be a great resource for caregiving needs. Each AAA covers a specific geographical area, so you’ll need to find the agency that covers your care recipient’s location. 

AAAs offer various support services, including:

• Helping care recipients and their families find financial aid
• Services that can help families save money, like meal delivery, homemaker assistance
• Anything else that helps the older adult stay in their home 

Paying For Respite Care

Respite isn’t a necessary expense of caregiving, but it should be. Many unpaid caregivers can’t afford the time or money to take a break from their duties. Funding for respite care allows caregivers to take time off and manage their own health. 

Medicare pays for respite care services but only for care recipients in hospice or end-of-life care. If your loved one has Medicare Part A and is in hospice care, you can get up to five consecutive days of respite care covered. 

If they’re enrolled in Medicaid, your state may have HCBC waivers specific to respite care. 

Lifespan Respite Care Programs are available in many states. These programs offer vouchers or grants to help families pay for respite care. One common option is access to volunteer and faith-based respite services, which offer free or low-cost respite to families in need. 

Senior care and disability care for loved ones can be rewarding but financially challenging. If caring for an adult family member, use these resources and programs to offset expenses.  

References

1. Otsuka America Pharmaceutical, Inc. (2024). America’s Unseen Workforce.
2. AARP (2023). New AARP Report Finds Family Caregivers Provide $600 Billion in Unpaid Care Across the U.S.
3. AARP (2021). Caregiving Can Be Costly — Even Financially
4. USAGov (2025). Get paid as a caregiver for a family member
5. U.S. Department of Labor (n.d.). Family and Medical Leave Act.
6. U.S. Department of Veterans Affairs (2025). Program of Comprehensive Assistance for Family Caregivers.
7. U.S. Department of Veterans Affairs (2024). VA Aid and Attendance benefits and Housebound allowance
8. Administration for Community Living (2024). Area Agencies on Aging (AAAs).
9. Paying For Senior Care (2024). Texas Community Care for Aged and Disabled (CCAD).