Minnesota's Medical Assistance (Medicaid) Waivers
In Minnesota, the primary route for family members to be paid for caregiving is through Medical Assistance (MA), the state's Medicaid program. MA offers Home and Community-Based Services (HCBS) waivers that allow eligible individuals to direct their own care, including hiring and paying family members. The key is that the elderly parent must qualify for Medical Assistance and meet the requirements for a specific waiver program, which is determined through an assessment process.
The Elderly Waiver (EW)
The Elderly Waiver (EW) is a Medicaid program for Minnesota seniors aged 65 and older who need a level of care similar to that provided in a nursing home but prefer to stay in their own home or a community setting.
- Eligibility: To qualify, the senior's income and assets must be within the Medicaid limits. A MnCHOICES assessment will determine the level of need and eligibility for waiver services.
- Paying Family Members: The EW program often includes a Consumer Directed Community Supports (CDCS) option, which allows the senior to hire certain family members as paid caregivers.
Consumer Directed Community Supports (CDCS)
This is a state-funded, self-directed program that gives individuals control over their care budget. Instead of having a traditional home care agency manage all services, the senior (or their representative) can choose their own workers, set wages, and manage the budget.
- How it Works: The family member is hired directly by the care recipient. A Financial Management Service (FMS) provider, like Partners in Community Supports (PICS), handles the payroll and tax administration.
- Flexibility: CDCS funds can also be used for other approved services, adaptive equipment, or home modifications, offering greater flexibility than traditional PCA services.
The Personal Care Assistance (PCA) Program
Minnesota’s Personal Care Assistance (PCA) program helps seniors and people with disabilities with daily tasks so they can remain in their homes. There are two main options: Traditional PCA and PCA Choice.
PCA Choice Option
The PCA Choice model offers more control to the care recipient. The senior still works with a PCA agency but has greater authority in hiring, training, and supervising their personal care assistants.
- Family Member as PCA: An elderly parent can hire an adult child or other qualified relative to be their PCA, provided the family member meets all state requirements.
- Requirements: To become a paid PCA in Minnesota, you must be at least 18 (with limited exceptions), pass a background check, complete training, and be enrolled with the Minnesota Department of Human Services.
- Restrictions: Spouses and parents of minor children generally cannot be paid under the traditional PCA program, though this restriction was temporarily suspended during the COVID-19 pandemic and may have since been adjusted under newer program rules like Community First Services and Supports (CFSS).
Veterans Affairs (VA) Benefits
For family members caring for a veteran, specific VA programs can provide financial and support services.
Program of Comprehensive Assistance for Family Caregivers (PCAFC)
This program offers a monthly stipend, health insurance, and other support services to eligible caregivers of veterans who sustained a serious injury in the line of duty on or before May 7, 1975, or on or after September 11, 2001.
- Eligibility: The veteran must have a VA disability rating of 70% or higher and require personal care for at least six months.
- Benefits: The monthly stipend amount varies based on the veteran's location and care needs.
Veteran-Directed Home and Community-Based Care (VD-HCBC)
This program provides eligible veterans with a flexible budget to purchase services and supports to live independently at home, including hiring family caregivers.
Comparison of Minnesota Caregiver Payment Programs
| Program | Who Can Be Paid? | Primary Funding Source | Key Feature for Caregivers |
|---|---|---|---|
| Elderly Waiver (EW) | Adult children and some other relatives (via CDCS option). | Medicaid. | Allows payment to certain family members and is self-directed through CDCS. |
| Consumer Directed Community Supports (CDCS) | Adults can hire and pay relatives (non-spouses, non-minor parents). | Medicaid/State Funding. | Gives a budget to the recipient to direct and manage their own care, including hiring family. |
| Personal Care Assistance (PCA) Choice | Qualified adult relatives (non-spouses, non-minor parents). | Medicaid. | Care recipient chooses and directs their own PCA, who is paid through an agency. |
| VA Programs (e.g., PCAFC) | Family caregivers of eligible veterans. | U.S. Dept. of Veterans Affairs. | Offers a monthly stipend, health insurance, and support for caregivers of qualified veterans. |
The Legal and Tax Implications of Getting Paid
Receiving compensation for caregiving has significant legal and tax considerations. It's important to understand how being paid might affect your financial and tax situation.
Tax Considerations
- Is it Taxable? In most cases, income received for providing care, even as a family member, is considered taxable income. The caregiver may receive a W-2 from a home care agency or be an independent contractor receiving a 1099-NEC.
- Medicaid Waiver Exception: In some instances, payments received through a Medicaid waiver program may be non-taxable under specific IRS guidance, particularly if the caregiver lives with the care recipient.
- Tax Benefits: Caregivers can also explore potential tax benefits like the Credit for Other Dependents or deductions for unreimbursed medical expenses.
Legal Considerations
- Formal Agreement: Having a formal, written caregiver agreement is crucial. This can protect the interests of both the caregiver and the parent, clarifying the services provided, hours worked, and rate of pay. This documentation is also vital for state program approvals.
- Effects on Medicaid Eligibility: Be aware that the money paid to a caregiver from a parent's assets can be scrutinized during the Medicaid look-back period. A formal, documented caregiver agreement can help prevent payments from being viewed as improper asset transfers.
Steps to Begin the Process in Minnesota
- Start with an Assessment: The elderly parent should have a MnCHOICES assessment completed. This determines their eligibility for state-funded programs and establishes the level of care needed.
- Contact a Local Agency: Reach out to your county or tribal Human Services agency, or the Senior LinkAge Line, to navigate the process and understand all available options.
- Choose a Program: Decide which program (e.g., EW/CDCS, PCA) best fits your family's needs and the eligibility of the parent.
- Become a Certified Provider: Follow the specific program's requirements for becoming a paid caregiver, which will likely involve training, a background check, and enrolling with the Minnesota Department of Human Services.
- Engage a Financial Management Service (FMS): If pursuing the CDCS or PCA Choice option, select a FMS provider to assist with payroll and other financial aspects.
For more information on the various programs and assistance, a valuable resource is the official website of the Minnesota Department of Human Services.
