Financial Planning

How to Pay for Home Care in New Jersey

12 min read

March 2026

By Legacy Life Home Care Services

"Cost is the number one reason families delay getting home care — and often the number one regret when they look back. In most cases, there are more funding options available than families realize."

Home care in New Jersey is a significant investment — and for most families, the question of how to pay for it is as important as the question of what care is needed. The good news is that there are more funding options available than most families realize, and many seniors qualify for benefits they have never claimed.

This guide covers the six most common funding sources for home care in New Jersey — what they cover, who qualifies, and what you need to know to access them. We also include practical guidance on combining multiple sources to maximize coverage and minimize out-of-pocket costs.

Important note: This article provides general information only. Eligibility rules, benefit amounts, and program details change frequently. Always consult with a qualified elder law attorney, financial advisor, or benefits specialist before making funding decisions.

Quick Reference: NJ Home Care Funding Sources

Funding Source	Who Qualifies	Typical Benefit	Covers Non-Medical Care?
Long-Term Care Insurance	Policyholders who meet ADL criteria	Varies by policy ($100–$400/day)	Yes — most policies
VA Aid & Attendance	Wartime veterans & surviving spouses	Up to $2,727/month (veteran)	Yes
NJ Medicaid (MLTSS)	Low-income seniors meeting clinical criteria	Covers approved care hours	Yes — personal & companion care
NJ PAAD / Senior Gold	NJ residents 65+ with limited income	Prescription drug savings	No — prescriptions only
Life Insurance Conversion	Policyholders with qualifying policies	$50,000–$200,000+ lump sum	Yes — unrestricted funds
Private Pay	All families	Unlimited — out of pocket	Yes

Long-Term Care Insurance (LTCI)

Most Common for Private-Pay Families

Long-term care insurance is the most straightforward funding source for families who planned ahead. Policies typically cover in-home care once the insured person can no longer perform two or more Activities of Daily Living (ADLs) — such as bathing, dressing, or eating — or has a cognitive impairment like Alzheimer's disease. Most policies pay a daily or monthly benefit that can be applied directly to caregiver costs.

Key Details

Review the policy's elimination period (the waiting period before benefits begin — typically 30, 60, or 90 days).

Confirm whether the policy covers non-medical home care or only skilled nursing care.

File a claim as soon as eligibility criteria are met — do not wait for a crisis.

Keep copies of all care invoices and caregiver logs, as insurers require documentation.

If your loved one has a policy but you're unsure how to file a claim, our Care Concierge team can help you navigate the process.

Veterans' Benefits: Aid & Attendance

Often Overlooked — Up to $2,727/Month

The VA's Aid and Attendance benefit is one of the most underutilized funding sources for home care in New Jersey. It is available to wartime veterans — and their surviving spouses — who require assistance with daily activities. The benefit is not income-based in the traditional sense, but it does consider net worth. As of 2025, eligible veterans can receive up to $2,727/month, surviving spouses up to $1,478/month.

Key Details

Eligible veterans must have served at least 90 days of active duty, with at least one day during a wartime period.

The veteran or surviving spouse must require assistance with at least one ADL.

Net worth limits apply (approximately $155,356 in 2025, excluding the primary home and vehicle).

The application process can take 6–12 months; working with an accredited VA claims agent can accelerate it.

Many NJ families are surprised to learn that a parent or grandparent qualifies. If you're unsure, ask us — we can connect you with a VA-accredited claims agent at no cost.

New Jersey Medicaid: MLTSS Program

For Those Who Meet Financial Eligibility

New Jersey's Medicaid Long-Term Services and Supports (MLTSS) program covers in-home care for eligible seniors who meet both clinical and financial criteria. The program is administered through managed care organizations and can cover personal care, companion care, and other home-based services. Financial eligibility requires income below approximately $2,742/month (2025) and assets below $2,000 for a single individual.

Key Details

Medicaid eligibility is complex — asset transfers within the past 5 years may trigger a penalty period.

The MLTSS program requires a clinical assessment to determine the level of care needed.

Enrollment is through a Medicaid managed care organization (MCO) such as Aetna Better Health or Horizon NJ Health.

A Medicaid planning attorney can help families structure assets to qualify without violating lookback rules.

Medicaid planning is time-sensitive. If you think your loved one may eventually need Medicaid, begin the planning process now — not after a crisis.

NJ PAAD & Senior Gold Programs

Prescription & Supplemental Assistance

New Jersey's Pharmaceutical Assistance to the Aged and Disabled (PAAD) and Senior Gold programs help eligible seniors reduce prescription drug costs — freeing up more of their fixed income for home care expenses. While these programs do not directly pay for home care, they can meaningfully reduce the overall cost burden for seniors on limited incomes.

Key Details

PAAD is available to NJ residents 65+ with income below approximately $34,000/year (single) or $41,500/year (married).

Senior Gold covers those with slightly higher incomes who do not qualify for PAAD.

Applications are available through the NJ Division of Aging Services.

Benefits can be combined with other programs including Medicaid and LTCI.

Life Insurance Policy Conversion

Turn an Existing Asset Into Care Funding

Many families are unaware that a life insurance policy can be converted into a funding source for long-term care. Two primary options exist: a life settlement (selling the policy to a third party for a lump sum greater than the cash surrender value) or a long-term care conversion rider (if the policy includes one). Both options can generate significant funds — often $50,000 to $200,000 or more — that can be used directly for home care.

Key Details

Life settlements are available for policies with face values of $100,000 or more.

The payout is typically 20–40% of the face value, compared to the cash surrender value which may be much lower.

Tax implications vary — consult a financial advisor or elder law attorney before proceeding.

Some policies include an accelerated death benefit rider that can be accessed for terminal or chronic illness.

A licensed life settlement broker can evaluate your loved one's policy at no upfront cost. Ask us for a referral.

Private Pay: Structuring Costs Wisely

For Families Funding Care Out of Pocket

Many families fund home care privately — from savings, retirement accounts, or the proceeds of a home sale. This is entirely viable, and often the fastest path to getting care started. The key is structuring the care plan to maximize value: starting with the hours that provide the greatest safety and quality-of-life benefit, and scaling up as needed rather than beginning with more care than is necessary.

Key Details

A well-designed care plan can often address the most critical needs with 20–30 hours per week initially.

Home care costs may be partially tax-deductible as a medical expense if they exceed 7.5% of adjusted gross income.

Families can combine private pay with other funding sources (e.g., LTCI or VA benefits) to reduce out-of-pocket costs.

Ask about our flexible scheduling options — we work with families to build plans that fit their budget without compromising quality.

Combining Multiple Funding Sources

Most families use more than one funding source simultaneously. For example, a veteran with a long-term care insurance policy might use VA Aid & Attendance to cover the first $2,000/month of care costs, LTCI to cover the next $3,000/month, and private pay for any remaining balance. A Medicaid-eligible senior might use MLTSS for covered hours and private pay for additional hours not covered by the program.

Coordinating multiple funding sources requires careful planning — but it can dramatically reduce out-of-pocket costs. We recommend working with an elder law attorney or certified financial planner who specializes in long-term care to build a comprehensive funding strategy.

Ask us for referrals to NJ elder law attorneys who specialize in Medicaid planning.

Ask us for referrals to VA-accredited claims agents who can expedite Aid & Attendance applications.

Ask us for referrals to licensed life settlement brokers who can evaluate existing policies.

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Let Us Help You Navigate the Funding Options

Not Sure Which Funding Sources Apply to Your Family?

Our Care Concierge team can help you identify which benefits your loved one may qualify for, connect you with the right specialists, and build a care plan that works within your budget.

Book a Free Consultation Call (973) 775-9222