Planning to keep a loved one at home while they receive care sounds straightforward—until you start navigating federal labor rules, funding streams, and worker protections. The landscape has shifted significantly, and the July 2025 updates to federal wage laws mean families need to understand their obligations before hiring help.
This guide breaks down what “assisted living at home” actually means, how recent legal changes affect your costs and care options, and what you can do now to build a sustainable plan. Whether you’re coordinating care for aging parents, exploring VA benefits as an eligible veteran, or weighing home care against an assisted living facility, you’ll find practical guidance here.
Key Takeaways
“Assisted living at home” refers to receiving help with daily tasks and medical needs in your own home rather than relocating to a community-based facility. This can include everything from bathing assistance to skilled nursing care, depending on what’s needed.
In 2025, federal rules under the Fair Labor Standards Act (FLSA) are being updated to clarify when home care workers must receive minimum wage and overtime. The July 2, 2025 rule published in the Federal Register directly impacts how families pay for and structure in home care.
Family caregivers, private agencies, Medicaid, VA benefits, and state programs can all play a role in funding and organizing care at home. Most families piece together multiple sources rather than relying on just one.
Planning ahead—reviewing contracts, understanding worker protections, and comparing home care versus facility care—helps families avoid surprises. Legal and financial decisions made early create more flexibility down the road.
This article covers legal protections for home care workers, practical care options, cost factors influenced by the new federal rule, and frequently asked questions about compliance.
What Is Assisted Living at Home?
Assisted living at home is ongoing support—both non-medical and sometimes medical—delivered in a private residence. The goal is helping adults manage activities of daily living such as bathing, dressing, meals, and medication reminders while remaining in familiar surroundings.
This differs significantly from traditional assisted living communities and nursing home care:
| Feature | Assisted Living at Home | Assisted Living Facility | Nursing Home |
|---|---|---|---|
| Location | Private residence | Licensed community | Licensed medical facility |
| Staffing | Hired individually or through agency | On-site 24/7 | On-site 24/7 with skilled nursing care |
| Regulatory oversight | Varies by state; employer responsibilities | State licensure requirements | Federal and state regulations |
| Social structure | Self-directed | Built-in activities and community | Structured schedules |
Typical services include personal care (help with grooming and hygiene), light housekeeping, transportation to appointments, companionship, and coordination with visiting nurses or therapists. Over 800,000 Americans currently reside in assisted living communities, but many more choose to receive similar support at home.
Care can be provided by a mix of family members, paid home care aides, and licensed home health agencies. Many older adults and people with disabilities prefer this arrangement to maintain independence, keep their routines, and stay connected to their community.
Types of Assisted Living at Home Services
There are several levels of in-home support that can be combined and adjusted as needs change over time. Understanding these categories helps you match services to your family member’s actual requirements.
Non-Medical Personal Care Services:
- Help with bathing, grooming, and dressing
- Toileting and incontinence care
- Assistance with eating and hydration
- Transfer support (getting in and out of bed, chairs)
- Walking safely and fall prevention
- Medication reminders (not administration)
Homemaker and Chore Services:
- Laundry and linen changes
- Meal preparation and nutrition planning
- Grocery shopping and errands
- Light cleaning and organizing
- Maintaining a safe living environment
Home Health Services (Physician-Ordered): Medical professionals deliver skilled interventions when ordered by a doctor:
- Skilled nursing visits
- Wound care and catheter management
- Injections and IV therapy
- Physical therapy and occupational therapy
- Speech-language pathology
- Vital signs monitoring
Live-In and 24-Hour Care: Some families arrange for one or more workers to stay overnight, providing continuous assistance and supervision. This is common for individuals with dementia, high fall risk, or complex medical needs.
Technology Supports: Remote monitoring devices, automatic medication dispensers, and telehealth visits can supplement in-person care. These tools help medical professionals track conditions between visits and alert family members to changes.
Home Care Workers and Your Rights: The Legal Landscape
Federal labor laws, especially the Fair Labor Standards Act (FLSA), set baseline rules for pay and protections for most home care workers in the United States. Understanding this framework is essential for anyone hiring help—whether through an agency or directly.
Historically, “companionship services” and “live-in domestic worker” exemptions allowed some in-home aides to be paid less than minimum wage and without overtime. These exemptions dated back decades and reflected a different era of domestic work.
A 2013 Department of Labor rule (effective January 1, 2015) extended FLSA minimum wage and overtime protections to most home care workers employed by agencies. This was a significant shift that increased wages for third-party home care aides by an estimated 40-50%.
Court challenges followed. A 2014 decision by the U.S. District Court and a 2015 ruling by the D.C. Circuit addressed various aspects of the rule, but protections for agency-employed workers ultimately took effect nationwide.
AARP and worker advocates have consistently pushed for stronger job protections, arguing that stable, fairly paid home care jobs are crucial to letting older adults live independently and safely. The health of the home care workforce directly affects the quality and availability of care.
Important Note: Families hiring directly (without an agency) may still qualify for certain FLSA exemptions, but they must review current federal and state law carefully or consult a knowledgeable advisor. Misclassifying workers can lead to legal and financial problems.
July 2, 2025: New Federal Rule on Domestic Service and Companionship
On July 2, 2025, the U.S. Department of Labor published a final rule in the Federal Register updating how the FLSA applies to domestic service employment, including companionship services and live-in home care.
The 2025 rule clarifies what counts as “companionship services” (such as fellowship and protection) versus general domestic work (like housecleaning) for FLSA exemption purposes. This distinction matters because it determines whether minimum wage and overtime requirements apply.
Key provisions of the rule:
- Non-exempt work limits: The rule tightens or clarifies how much general housekeeping someone classified under the companionship exemption can perform before losing that status
- Recordkeeping requirements: Updated guidance on documenting hours worked
- Sleep time provisions: Clarified treatment of sleep time for live-in domestic workers
- Overtime calculations: Guidance on when overtime must be paid to reduce disputes
Example: A caregiver in 2026 working more than 40 hours per week for an agency generally must receive overtime pay. However, a directly hired live-in caregiver’s treatment may depend on whether the family meets specific exemption criteria under the updated rule.
What This 2025 Rule Means If You Hire Through an Agency vs. Hire Directly
| Hiring Method | FLSA Status | What You Should Know |
|---|---|---|
| Through a licensed agency | Workers are agency employees | Agency handles payroll, overtime, and compliance. You pay their rates, which include these costs. |
| Direct hire as household employer | You are the employer | You may qualify for exemptions but must verify. Responsibility for taxes, recordkeeping, and FLSA compliance falls on you. |
| Direct hire as independent contractor | Complex and risky | Most home care aides don’t legally qualify as independent contractors. Misclassification can trigger penalties. |
How Federal Labor Rules Affect Assisted Living at Home Costs
Higher wage protections for home care workers directly influence the hourly rates agencies charge and how many hours of support families can afford. Understanding this connection helps with budgeting.
Agency-employed aides must generally be paid at least the federal minimum wage (or higher state and local minimums) plus overtime after 40 hours in a workweek. This requirement gets built into the rates you pay.
Many agencies limit individual workers to fewer than 40 hours per week, rotating staff to control overtime costs. This practice keeps rates manageable but can affect continuity of care—your loved one may see different faces throughout the week.
Directly hiring a worker as a household employer may offer more scheduling flexibility but transfers payroll, tax, and compliance responsibilities to the family. You’ll need to handle:
- Payroll withholding
- Social Security and Medicare taxes
- Workers’ compensation (required in most states)
- Compliance with FLSA recordkeeping
Some states and cities have additional protections. New York, California, and Seattle, for example, have higher minimum wages, paid sick leave mandates, and domestic worker bills of rights that further shape pricing.
Cost Snapshot (2025):
- National averages for non-medical home care: approximately $28–$35 per hour
- 24/7 care at home: can equal or exceed assisted living costs (often $4,000–$8,000+ monthly)
- Assisted living facility: median costs around $4,500–$5,000 monthly
- Nursing home care: often $8,000–$10,000+ monthly for semi-private rooms
These figures vary significantly by region, so local research is essential.
Funding Assisted Living at Home: Public and Private Options
Families usually piece together several funding sources to pay for assisted living at home. Understanding what each source covers—and its limitations—is critical for long term care planning.
Medicare: Medicare may cover short-term skilled home health services after a qualifying hospital or skilled nursing stay. However, it does not pay for long-term personal care, homemaker services, or housekeeping. Many families are surprised by this limitation.
Medicaid Home and Community-Based Services (HCBS): In many states, Medicaid waivers pay for in-home aides, adult day services, and home modifications for people who meet income and medical-need criteria. Waiting lists can be long, so apply early. These programs aim to help people live independently as an alternative to nursing home care.
Veterans Affairs (VA) Options: The VA provides several paths for eligible veterans and their families. Some assisted living communities accept VA benefits, which can help veterans access specialized housing options. While VA pay does not directly cover assisted living costs, VA benefits can provide financial assistance through various programs. The amount of VA benefits a veteran is eligible for, such as for a single veteran with no dependents, depends on their income and financial situation, and financial eligibility typically requires falling below a certain income bracket. Veterans can use VA pension funds to help pay for room and board in assisted living facilities. The VA system also allows veterans to access more than one service at a time, such as combining in-home care with other support services. For example, Veterans’ Homes in Illinois offer skilled and domiciliary care and are designed to enhance the lives of veterans.
| VA Program | What It Covers | Who Qualifies |
|---|---|---|
| Aid and Attendance | Additional funds added to VA pension for those needing help with everyday tasks | Veterans, surviving spouse, eligible spouses with qualifying service and disability compensation status |
| Homemaker/Home Health Aide Program | In-home personal care and health care services | Veterans enrolled in va health care |
| State Veterans Homes | May provide domiciliary care or assisted living | Veterans meeting state eligibility requirements |
| Respite Care | Short-term relief for family caregivers | Veterans receiving VA medical care |
Veterans with a service connected disability may qualify for additional benefits. The VA requires an application process—you can start exploring benefits online or contact va medical centers directly. Gold star parents and non veteran spouses may also access certain supports through veterans affairs programs.
Private Funding Sources:
- Long term care insurance policies (if purchased before care is needed)
- Life insurance conversions or accelerated benefits
- Reverse mortgages for homeowners
- Private insurance policies
- Family cost-sharing agreements
- Personal savings and countable income planning
The federal government and state programs provide a foundation, but most families find they need to combine multiple sources to cover assisted living expenses fully.
VA Benefits for Disabled Veterans
Disabled veterans have access to a range of VA benefits designed to help them live independently and safely in their own home. If you have a service connected disability, you may qualify for disability compensation, which provides monthly financial support based on the severity of your condition. This compensation can be used to help cover assisted living costs, pay for in home care, or offset other assisted living expenses.
One of the most valuable programs for eligible veterans is the Aid and Attendance benefit. This additional monthly payment is available to veterans who need help with everyday tasks such as bathing, dressing, or eating. Aid and Attendance can be added to your VA pension and is specifically intended to provide financial support for those requiring personal care or assistance with daily living.
The VA also offers the Homemaker/Home Health Aide program, which provides in-home personal care and health care services through VA medical centers. These services can include help with bathing, grooming, meal preparation, and even skilled nursing care when medically necessary. For veterans with complex medical needs, the VA may also provide wound care, physical therapy, and other long term care services.
If you are a disabled veteran, it’s important to explore all available VA benefits to maximize your support. Many programs can be combined with private insurance, Medicaid, or other funding sources to ensure comprehensive coverage for your medical needs and well being. Contact your local VA medical center or visit the veterans affairs website to learn more about eligibility requirements and how to apply.
Armed Forces Benefits
In addition to VA health care, members of the armed forces and certain retirees may be eligible for additional benefits that support assisted living at home. The Armed Forces Retirement Home is one such option, offering a community setting with access to medical care, skilled nursing care, and personal assistance for retired members of the armed forces who meet specific service and age requirements.
Federal government programs may also provide assistance for long term care, including domiciliary care, nursing home care, and hospice care. These benefits are designed to help veterans and their families manage the costs of senior care, whether in an assisted living facility, retirement home, or their own home.
Some armed forces benefits can be used in conjunction with VA benefits, private insurance, or state veterans home programs to cover assisted living expenses and provide additional funds for eligible veterans. It’s important to review all available options, as benefits and covered services may vary based on your service history, disability status, and other factors.
If you or your loved one served in the armed forces, reach out to your branch’s retirement services office or a veterans affairs representative to discuss your eligibility and the best way to access these valuable resources.
Veterans’ Spouses and Benefits
Spouses, surviving spouses, and gold star parents of veterans may also be eligible for a range of benefits that help cover assisted living costs and provide financial support for in home care. The VA recognizes the vital role that family members play in supporting veterans and offers several programs to assist eligible spouses and family members.
Surviving spouses may qualify for Aid and Attendance benefits if they meet certain criteria, such as needing help with daily living activities or having limited countable income. These additional funds can be used to pay for personal care, homemaker services, or even skilled nursing care at home.
Non veteran spouses may also access certain VA health care services, especially if the veteran has a service connected disability or meets other eligibility requirements. Gold star parents—those who have lost a child in service—may be eligible for specific support programs through veterans affairs.
It’s important for families to understand that eligibility for these benefits often depends on factors such as the veteran’s discharge status, length of service, and the spouse’s current needs. Consulting with a VA-accredited claims agent or visiting your local VA medical center can help clarify what benefits are available and how to apply.
Eligibility and Application
Determining eligibility for VA health care, armed forces benefits, and related programs is the first step toward securing financial support for assisted living at home. Eligibility requirements typically consider factors such as honorable discharge status, length of service, disability rating, income, and medical needs.
To begin the application process, gather essential documents such as your DD-214 (discharge papers), medical records, proof of income, and any documentation related to your disability or need for daily living assistance. For spouses and surviving spouses, marriage certificates and proof of relationship may also be required.
You can apply for VA benefits online through the official veterans affairs website, in person at a VA medical center, or with the help of a VA-accredited representative. Many state veterans offices and senior care organizations also offer assistance with the application process.
Be prepared to provide detailed information about your medical needs, daily tasks you require help with, and any other factors that may affect your eligibility. The VA may require medical evaluations or additional documentation to determine the level of care and support you qualify for.
If you are seeking benefits through the armed forces or a state veterans home, contact the appropriate office for guidance on their specific application procedures. Starting early and keeping thorough records will help ensure a smoother process and quicker access to the benefits you need to support your well being and independence at home.
Hiring and Managing Home Care Workers
There are two main routes to securing in home care: hiring through an agency or hiring workers directly as household employees.
Agency-Based Care Checklist:
- Verify state licensure and accreditation
- Confirm background check procedures
- Ask about training standards and ongoing supervision
- Understand their backup plan when a worker is sick
- Review insurance coverage (liability, bonding)
- Clarify what covered services include
Direct Hiring Steps:
- Write a detailed job description covering duties, schedule, and expectations
- Interview candidates and check references thoroughly
- Verify work authorization
- Set up payroll through a service or fiscal intermediary to handle taxes and FLSA obligations
- Register as a household employer with your state
Written Agreement Essentials: Every arrangement—agency or direct—should include written terms covering:
- Specific duties and daily tasks
- Work schedule and overtime policies
- Pay rate and payment schedule
- Mileage reimbursement and expense handling
- Time-off policies
- Confidentiality expectations
- Termination conditions
Ongoing Supervision:
- Hold regular family meetings to discuss care
- Update the care plan as medical needs change
- Maintain task logs and communication notes
- Address issues promptly and professionally
Respecting workers’ rights and boundaries reduces turnover and maintains high-quality, reliable care. A well-treated caregiver is more likely to stay, providing the continuity that benefits your loved one’s well being.
Balancing Assisted Living at Home with Caregiver Well-Being
Many families combine paid home care with unpaid family caregiving. This arrangement can be physically, emotionally, and financially demanding on the family member providing assistance.
Typical Family Caregiver Tasks:
- Medication organization and pharmacy pickups
- Transportation to medical appointments
- Coordinating between multiple medical professionals
- Advocating with doctors and insurers
- Hands-on personal care (bathing, dressing, transfers)
- Managing household finances and bills
- Providing emotional support and companionship
Organizations like AARP have documented high rates of caregiver stress, depression, and financial strain. Stronger job protections for paid workers and a more stable workforce can indirectly ease this burden by making reliable help easier to find.
Practical Supports for Family Caregivers:
- Adult day programs that provide financial support for daytime supervision
- Respite care funded through Medicaid, VA, or state programs
- Caregiver support groups (in-person and online)
- Counseling and mental health services
- Workplace flexibility policies (FMLA, state leave laws)
Resources to Explore:
- Local Area Agencies on Aging
- State Aging and Disability Resource Centers
- Veteran service organizations
- Hospice care programs (for end-of-life situations)
- Senior care navigation services
Taking care of yourself isn’t optional—it’s essential for sustaining your ability to provide assistance over time.
How Assisted Living at Home Compares to Facilities
Assisted living at home is one option in a continuum that includes assisted living communities, memory care units, retirement home options, state veterans home programs, and nursing homes. Each has trade-offs worth considering.
Advantages of Staying Home:
- Familiar surroundings and personal belongings
- Control over daily routines and schedules
- One-on-one, personalized support
- Ability to age in place with appropriate home modifications
- Maintaining community ties and relationships
Potential Drawbacks:
- Care can become fragmented without good coordination
- Housing maintenance responsibilities remain
- Need for reliable backup plans when workers are unavailable
- Possible higher total costs for 24/7 coverage
- Risk of social isolation without intentional effort
Facility Advantages:
- On-site staff 24/7 for emergencies
- Built-in social activities and community connection
- Bundled services (meals, housekeeping, transportation)
- Predictable monthly fees (though assisted living costs vary)
- Transitions to higher care levels without moving
Facility Drawbacks:
- Less privacy and personal control
- Adjustment challenges (new environment, routines)
- May feel institutional
- Rules about personal items and visitors
| Factor | Home | Assisted Living | Nursing Home |
|---|---|---|---|
| Privacy | High | Moderate | Limited |
| Social opportunities | Self-directed | Built-in | Built-in |
| Medical oversight | As arranged | Available on-site | Continuous |
| Monthly cost range | Varies widely | $4,000–$6,000+ | $8,000–$12,000+ |
| Best for | Those with support system | Those needing moderate help | Those needing skilled nursing care |
Rather than declaring a single “best” option, weigh these factors: health complexity, dementia risk, fall history, social needs, caregiver availability, and finances. What works for one family may not suit another.
Planning Ahead for Assisted Living at Home
Decisions become significantly easier when families plan before a crisis hits. Ideally, conversations should begin in one’s 60s or early 70s—or when a chronic condition is first diagnosed.
Key Planning Steps:
- Assess current and future care needs with a clinician who understands long term care services
- Inventory financial resources including savings, insurance, VA benefits eligibility, and potential Medicaid qualification
- Review legal documents ensuring powers of attorney and advance directives are current
- Explore local service options through Area Agencies on Aging and state resources
- Meet with an elder law attorney or benefits counselor to understand how the 2025 FLSA rule might affect arrangements
Home Safety and Accessibility: Schedule assessments through occupational therapists or local aging organizations. Plan for:
- Grab bars in bathrooms
- Ramps or stair modifications
- Bathroom accessibility changes
- Fall-prevention fixes
- Lighting improvements
- Emergency response systems
Create Contingency Plans: Document what happens if:
- The primary caregiver becomes ill
- Care needs exceed what can be managed safely at home
- Funding sources change or run out
- The current living situation becomes unsafe
Veterans should specifically explore whether an armed forces retirement home or state veterans programs might provide additional benefits or serve as backup options. Disabled veterans with total disability ratings may access enhanced services.
With the right mix of legal knowledge, financial planning, and community resources, many people successfully age in their own home. The key is starting early and remaining flexible as circumstances evolve.
Frequently Asked Questions (FAQ)
Do I have to pay overtime to a live-in caregiver?
It depends on how you hire them. If you use an agency, the agency handles FLSA compliance, and overtime is typically built into their rates. If you hire directly as a household employer, the July 2, 2025 rule clarifies that live-in domestic workers may be exempt from overtime requirements under certain conditions—but you must meet specific criteria. The exemption doesn’t apply automatically. Consult the Department of Labor’s guidance or an employment attorney before assuming you qualify.
Are home care workers considered employees or independent contractors?
Most home care aides working through agencies are employees of that agency. When you hire directly, the worker is almost always your employee, not an independent contractor. The IRS and Department of Labor look at factors like who controls the work schedule, who provides supplies, and whether the worker serves multiple clients. Misclassifying an employee as an independent contractor can result in back taxes, penalties, and legal liability. When in doubt, treat the worker as an employee. It is important to remember that ADA and Title VII protections might apply too.
Can I use VA benefits specifically to pay for assisted living at home?
The VA doesn’t have a formal “at-home assisted living” category, but several programs effectively fund in-home care. Aid and Attendance adds monthly funds to VA pensions for veterans and surviving spouses who need help with everyday tasks. The VA Homemaker/Home Health Aide program provides direct services through va medical centers. State veteran programs may offer additional funds. Check with veterans affairs or a VA-accredited claims agent to understand what you’re eligible for based on your honorable discharge status and other factors.
How do I find trustworthy information about changing federal rules for home care?
Start with official government resources: the U.S. Department of Labor website, Federal Register notices (like the July 2, 2025 document on domestic service), and your state labor department. For plain-language summaries, AARP’s advocacy pages on job protections for home care workers provide accessible overviews. Be cautious about outdated blog posts or social media claims—regulations change, and only official sources reflect current law.
What’s the difference between home health care and home care?
Home health care refers to skilled medical services ordered by a physician and delivered by licensed medical professionals—things like wound care, physical therapy, or IV medication. It may be covered by Medicare or private insurance for limited periods. Home care (sometimes called personal care or homemaker services) is non-medical assistance with daily tasks like bathing, cooking, and housekeeping. This is typically not covered by Medicare and must be funded through Medicaid waivers, VA programs, long term care insurance, or private pay.
