Kentucky residents can receive payment for caring for a family member through specific state programs. Navigating the system of financial support for family caregiving can be complex, but Kentucky has established mechanisms that make it possible to turn this unpaid labor into a compensated role. This guide details the structure of these programs and the steps required for a family member to become a paid caregiver.
Understanding Kentucky’s Participant-Directed Services Model
The framework enabling Kentucky residents to hire and pay a family member for caregiving services is called Participant-Directed Services (PDS). PDS is an option within the state’s long-term care programs, allowing the care recipient or their representative to act as the employer. This model shifts control from traditional home health agencies to the consumer, granting them the authority to select, train, and manage their own care providers.
The PDS model is central to paid family caregiving because it directly empowers the care recipient to hire an individual of their choosing, which can include qualified family members. The participant manages a budget allocated for their care services, ensuring the support is personalized and flexible. This model provides control over non-medical waiver services, such as personal care, homemaking, and respite.
Key Kentucky Medicaid Waivers That Allow Paid Family Caregiving
Financial support for paid family caregiving in Kentucky is provided through specific Medicaid Home and Community-Based Services (HCBS) waivers. These federally approved programs allow the state to offer services outside of an institutional setting, such as a nursing facility. The PDS option, which enables family payment, is attached to these waivers, requiring the care recipient to first be approved for one of the programs.
Home and Community Based Services Waiver (HCBS)
The Home and Community Based Services (HCBS) Waiver targets individuals who are elderly (age 65 and older) or disabled (age 64 and younger) and require a nursing facility level of care. This waiver provides supports such as personal care, homemaker services, and respite care. The PDS option is available under the HCBS Waiver, allowing the participant to direct the hiring of caregivers for non-medical tasks.
Supports for Community Living Waiver (SCL)
The Supports for Community Living (SCL) Waiver is designed for individuals with intellectual or developmental disabilities who meet the requirements for an Intermediate Care Facility for Individuals with an Intellectual Disability (ICF/IID) level of care. This waiver includes the PDS option, allowing participants to utilize a self-directed budget to hire their own providers. Because this waiver is non-entitlement, it may have a waiting list for services.
Acquired Brain Injury Waivers (ABI)
Kentucky offers two Acquired Brain Injury Waivers: the ABI Acute Waiver (ABI-A) and the Long-Term Care Brain Injury Waiver (ABI-LTC). Both are for adults aged 18 or older who meet a nursing facility level of care due to their injury. The PDS option is available within both ABI waivers, allowing participants to hire family members for services like community living supports and personal care.
Eligibility Requirements for the Care Recipient
A family member can only be paid if the care recipient meets two distinct sets of eligibility criteria for a Medicaid waiver program. The first requirement is functional or medical eligibility, meaning the applicant must be assessed as needing a “nursing facility level of care.” This determination is based on the individual’s need for assistance with activities of daily living, such as bathing, dressing, and mobility.
The second requirement is financial eligibility, which mandates that the care recipient must meet Kentucky Medicaid’s income and asset limits. For HCBS waivers, the individual’s monthly income must not exceed 300% of the Federal Benefit Rate, and countable assets must fall below the specified threshold. The applicant must successfully navigate an initial application through the state’s system to begin the process of qualifying for a waiver and the PDS option.
Navigating the Application and Assessment Process
Enrollment in a PDS program begins with submitting an initial application through the state’s centralized system, Kentucky Medicaid’s Benefind platform. After processing, the next step is contacting the local Single Entry Point (SEP) agency, such as an Area Agency on Aging and Independent Living. The SEP agency assists with the waiver application through the state’s Kynect website.
A functional needs assessment is mandatory to determine the exact level of care required and confirm the nursing facility level of care requirement. This assessment includes the Preadmission Screening and Resident Review (PASRR, a federal requirement to prevent inappropriate placement in a nursing facility). A PDS case manager, or support broker, then works with the participant to develop a person-centered service plan. This plan outlines the specific non-medical supports needed and establishes the budget for the family caregiver’s wages.
Requirements for the Designated Family Caregiver
The family member intending to be the paid care provider must meet specific employment and program requirements under the PDS model. As an employee of the care recipient, the caregiver must be at least 18 years old and is subject to a criminal background check. This check is a standard requirement for all paid providers in the program.
The paid family caregiver must also complete mandatory training, which includes instruction on person-centered planning, self-determination, and the prevention of abuse, neglect, and exploitation. A key detail in Kentucky’s PDS model is the exclusion of certain immediate family members from being paid employees under some waivers. While adult children are often eligible, spouses and legal guardians are frequently excluded from compensation for personal care services, though rules vary by waiver.
Managing Payment and Fiscal Administration
The family caregiver’s payment is managed by a third-party entity called a Fiscal Management Service (FMS), which acts as the Employer of Record. The FMS handles all administrative payroll tasks, including calculating wages, processing timesheets, and ensuring compliance with state and federal labor laws. The caregiver’s hourly wage is determined by the service plan and is subject to state and program caps on reimbursement rates.
The FMS also manages tax responsibilities, such as withholding federal and state income taxes, Social Security, and Medicare taxes. Caregivers should note the potential application of IRS Notice 2014-7, which allows certain Medicaid waiver payments to be excluded from federal gross income as “difficulty of care payments.” This exclusion applies specifically to payments for non-medical support services provided to an eligible individual living in the caregiver’s home, but caregivers should consult a tax professional for guidance on their specific situation.
Exploring Non-Medicaid Resources and Alternatives
For families who do not qualify for Kentucky’s Medicaid waivers, several alternative resources can provide financial or supportive assistance. Veterans and their surviving spouses may be eligible for benefits through the U.S. Department of Veterans Affairs (VA). These include the Aid and Attendance pension, which provides additional funds to cover the cost of in-home care, and the Veteran-Directed Care (VDC) program, which functions similarly to PDS by giving veterans a budget to hire their own caregivers.
Long-term care insurance policies purchased privately may include provisions for home care services that can be used to pay a family member, depending on the policy’s terms. State-funded programs, like the Hart-Supported Living Program, are non-Medicaid options that help individuals with disabilities live independently and can provide funding for caregiving services. Local Area Agencies on Aging and Independent Living also offer respite care programs, caregiver training, and information on community grants.