Examples of custodial care include helping someone bathe, dress, use the toilet, eat, move from a bed to a chair, prepare meals, do laundry, remember medications, and stay safe at home when memory loss makes wandering or leaving a stove on a real risk. It is non-medical help with everyday living, provided by someone who does not need a medical license to do the work. That last point is what makes custodial care matter financially: because the tasks don’t require a licensed professional, Medicare and most health insurance treat them as personal rather than medical, and the bill falls to you.
Personal Care: The Six Activities of Daily Living
The clearest examples of custodial care are the six Activities of Daily Living, or ADLs. Insurers, government programs, and clinicians use this same list to measure how much help a person needs each day.1Administration for Community Living. Receiving Long-Term Care Insurance Benefits
- Bathing — helping someone step safely into a tub or shower, washing their body, or giving a sponge bath when mobility is limited.
- Dressing — choosing appropriate clothing and handling buttons, zippers, socks, and other fastenings that need fine motor control.
- Toileting — helping a person get to and from the bathroom, use the toilet, and clean up afterward.
- Continence — managing bladder or bowel control, including changing protective garments and cleaning after accidents.
- Transferring — helping a person move between positions, such as from a bed to a wheelchair or from a chair to standing, to prevent falls and skin breakdown.
- Eating — assisting with the physical act of bringing food to the mouth, cutting food, or using adapted utensils. Feeding tubes are not included; those fall under skilled nursing care.
The IRS uses the same six tasks when deciding whether someone qualifies as chronically ill for tax purposes.2Internal Revenue Service. Publication 502, Medical and Dental Expenses Needing substantial help with at least two of them is the standard trigger for benefits under most long-term care insurance policies and several government programs.1Administration for Community Living. Receiving Long-Term Care Insurance Benefits
Household and Independence Tasks
Custodial care also covers the broader household tasks known as Instrumental Activities of Daily Living (IADLs). Losing these skills is often the first sign that someone needs help, and support with them is often what keeps a person out of a facility.
- Meal preparation — planning menus, shopping, cooking, and cleaning up, with any dietary restrictions in mind.
- Housekeeping and laundry — light cleaning, vacuuming, changing bedding, and washing clothes to keep the home sanitary and free of trip hazards.
- Transportation — driving to medical appointments, religious services, or social outings, or running errands like prescription pickups.
- Medication reminders — verbal or visual cues to take prescribed pills on schedule. A custodial caregiver can remind, but generally cannot give injections or manage complex drug regimens; those tasks require a licensed professional.
- Financial management — help with bill-paying, budgeting, and paperwork. If the person receives Social Security and can no longer manage it, a family member must apply to become a representative payee through Social Security. Power of attorney alone does not authorize someone to manage those federal payments.3Social Security Administration. Frequently Asked Questions for Representative Payees
Supervision for Cognitive Impairment
A third category of custodial care is protective oversight for people with Alzheimer’s disease, dementia, or other cognitive impairments. The focus is less on completing tasks and more on keeping the person safe. A caregiver’s presence prevents a disoriented person from wandering out of the home, redirects unsafe behavior, and removes hazards like an unattended stove burner or unlocked doors.
This kind of supervision counts even when the person can still handle physical ADLs on their own. Under IRS rules, someone who needs substantial supervision because of severe cognitive impairment meets the federal definition of chronically ill.2Internal Revenue Service. Publication 502, Medical and Dental Expenses That matters for both tax deductions and long-term care insurance claims.
What Separates Custodial Care From Skilled Care
The line between custodial and skilled care comes down to who can safely do the task. Under federal regulations, a service counts as skilled only if it is complex enough that it must be performed by, or under the direct supervision of, a licensed professional such as a registered nurse, physical therapist, or speech pathologist.4eCFR. 42 CFR Part 409 Subpart D – Requirements for Coverage of Posthospital SNF Care Wound care, IV medications, and physical rehabilitation exercises are skilled. Bathing, dressing, feeding, and the other examples above are not, and an unlicensed aide or family member can handle them after basic instruction.5Centers for Medicare & Medicaid Services. Custodial Care vs. Skilled Care
That classification drives everything about how custodial care is paid for.
Who Pays for Custodial Care
Medicare Does Not
Medicare’s own guidance says plainly that Medicare and most health insurance, including Medigap, do not cover long-term care services in a nursing home or in the community.6Medicare.gov. Long-Term Care Coverage Medicare will pay for short-term skilled nursing after a qualifying hospital stay, but once a person’s needs become purely custodial, coverage ends and the individual pays 100% of the cost.7Centers for Medicare & Medicaid Services. Items and Services Not Covered Under Medicare
The national median cost for nonmedical in-home care is roughly $33 per hour, with rates ranging from the mid-$20s in lower-cost areas to the upper $30s or more in major metros. Full-time help can run $5,000 or more a month. The median annual wage for home health and personal care aides was $34,900 as of May 2024, but families typically pay more because agency fees and overhead sit on top of the aide’s wage.8Bureau of Labor Statistics. Home Health and Personal Care Aides
Medicaid Home and Community-Based Services
Medicaid is the primary government payer for long-term custodial care, but eligibility depends on income and assets, and the rules vary by state. Home and Community-Based Services (HCBS) waivers let states provide personal care, homemaker services, adult day programs, and respite care to people who would otherwise need a nursing facility.9Medicaid.gov. Home and Community-Based Services 1915(c)
Waiting lists are long. As of 2021, nearly 700,000 people across 38 states were on HCBS waiting lists, with an average wait of 36 months. People whose income or assets exceed state Medicaid limits may need to “spend down” by using excess resources on qualifying medical expenses before they become eligible. States call this process by different names, including “excess income program” and “medically needy program,” and spend-down periods range from one to six months.
VA Aid and Attendance
Veterans who already receive a VA pension and need daily help with custodial tasks may qualify for the Aid and Attendance benefit. A veteran must meet at least one clinical condition: needing another person’s help with tasks like bathing, dressing, and eating; being confined to bed for a large portion of the day because of illness; residing in a nursing home due to lost physical or mental abilities; or having severely limited eyesight.10Veterans Affairs. VA Aid and Attendance Benefits and Housebound Allowance
For 2026, the maximum annual pension rate for a single veteran with no dependents who qualifies for Aid and Attendance is $29,093, or roughly $2,424 per month.11Veterans Affairs. Current Pension Rates for Veterans Surviving spouses of veterans may qualify for a lower monthly amount.
Long-Term Care Insurance
Private long-term care insurance is designed specifically for the services Medicare excludes. Most policies begin paying benefits once a company-sponsored assessment confirms that you need help with at least two of the six ADLs or have a cognitive impairment requiring substantial supervision.1Administration for Community Living. Receiving Long-Term Care Insurance Benefits Policies typically pay a fixed daily or monthly amount. For 2026, the federal per diem exclusion, which is the most you can receive tax-free per day, is $430.
Premiums climb sharply with age, so buying in your 50s or early 60s is generally more affordable than waiting. Some employers offer group coverage at lower rates. Policies may impose waiting periods before benefits begin, cap the total benefit period (commonly three to five years), and require premium payments that can rise over time.
The PACE Program
The Program of All-Inclusive Care for the Elderly (PACE) bundles medical care, custodial support, transportation, and social activities under one provider team. It is available to people 55 or older who meet their state’s nursing-facility level of care but can still live safely in the community.12Centers for Medicare & Medicaid Services. Programs of All-Inclusive Care for the Elderly (PACE) Manual People who qualify for both Medicare and Medicaid generally pay nothing out of pocket. PACE isn’t available everywhere, so check whether a PACE organization operates in your area.
Tax Rules Worth Knowing
Deducting Custodial Care as a Medical Expense
If you pay for custodial care out of pocket, some or all of those costs may count as deductible medical expenses on your federal return. Two conditions have to be met: a licensed health care practitioner must certify that the person is chronically ill, and the care must follow a written plan of care that the practitioner prescribed.2Internal Revenue Service. Publication 502, Medical and Dental Expenses
A person counts as chronically ill if, within the past 12 months, a practitioner has certified either that they cannot perform at least two ADLs without substantial help for at least 90 days, or that they need substantial supervision because of severe cognitive impairment.2Internal Revenue Service. Publication 502, Medical and Dental Expenses When a caregiver splits time between medical tasks (bathing, grooming) and household chores (cooking, laundry), only the portion of wages tied to medical services is deductible. You can deduct qualifying medical expenses only to the extent they exceed 7.5% of your adjusted gross income.
If You Hire the Caregiver Directly
Hire a caregiver on your own instead of through an agency and the IRS generally treats that person as your household employee rather than an independent contractor. The deciding factor is whether you control what gets done and how; because families typically set the schedule, tasks, and methods, most private caregivers meet the employee definition.13Internal Revenue Service. Independent Contractor (Self-Employed) or Employee
For 2026, you must withhold and pay Social Security and Medicare taxes if you pay a household employee $3,000 or more in cash wages during the calendar year.14Internal Revenue Service. Publication 926, Household Employer’s Tax Guide You may also owe federal unemployment tax. Paying a caregiver in cash without reporting it is a common mistake, and the back taxes, penalties, and interest add up quickly.