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Caregiver agency or independent in-home care: Pros and cons of each

Liane Starr
Feb. 20, 2019

When it became clear that Greta's Alzheimer's disease had progressed to the point that she needed constant care, her adult daughter April knew she would need to seek help. The problem was figuring out what kind of help.  

Though Greta had always made it clear she wanted to age in place, April wasn't sure where to start. Should she pick an agency? Should she place an ad for a home aide? And, more importantly, what could she realistically afford using her mother’s limited savings? 

While using an agency simplifies the process, convenience usually comes at a price. "Opening your home and entrusting your loved one to a caregiver is big step, and one that must be undertaken with caution," explains Care.com's Mary Stehle, LICSW and Senior Care Advisor.

Here are the main pros and cons to consider when deciding between an agency and hiring independently.  

Using a caregiver agency


  • Good coverage: There are national, regional and local agencies.
  • Comprehensive: Most agencies screen applicants, offer training, and handle all the paperwork, such as payroll, taxes and legal matters.
  • Back-up care: Even if you use a preferred caregiver through the agency, they'll have qualified back-ups in case your regular provider can't make it to work.


  • Access to information: Some people may feel using an agency is a little impersonal. After all, you're not fully in control and don't necessarily have access to all the information about the caregivers, their salaries and other details.
  • Cost: "Agencies are a really good option for many people, but they do charge a premium for their services," explains Stehle. "You'll also still need to be really attentive to both the agency and the individual caregiver once they're hired." 
  • Time minimums: There may be a minimum hourly requirement per shift, typically four hours.

Hiring independently


  • Cost: You may be able to negotiate a better rate dealing directly with the worker.
  • More control: You can really get a feel for the candidates in the industry and make a more informed decision about who might be a good fit. "Many people feel more comfortable managing the hiring process themselves, because it is so very personal," acknowledges Stehle. "If you decide to find care for your loved one yourself, you need to carefully review potential caregivers."
  • Flexibility: An independent caregiver might be more flexible in negotiating their schedule directly with you. They also may be more willing to sign on for live-in, weekend or holiday care.


  • Finding candidates. You can find help through sites like Care.com, your network of friends, family and colleagues, social networks and religious groups. However, "you must do your due-diligence," says Stehle. "It's important to interview, call multiple references, run background checks, and trust your gut instinct."
  • Care coordination. If you're hiring directly, you'll be responsible for finding back-up care if your regular caregiver is unable to work. It's always a good idea to have some additional, screened resources on hand who you can call on an as needed basis.

Costs: Agencies vs. independent care 

Care can be much more expensive – sometimes prohibitively so – when hiring through an agency. Here’s how the national average costs break down for a year of care: 



(25 hours/ 



(40 hrs/wk) 


(120 hrs/wk) 


(168 hrs/wk) 






Independent care 





Costs are determined by national averages and research via Genworth and the US Census Bureau. Private employment figures include caregiver wages ($11.35/hr), payroll taxes, hiring a payroll & tax service, and workers’ compensation insurance. Agency costs include agency rate ($20/hr), overtime, insurances and business overhead. 

Other considerations

Handling taxes. For those employing a caregiver and paying him or her legally, tax breaks can largely offset employer payroll taxes — and those tax savings can make a big difference in employer costs.  

The tax breaks and benefits available to most families are:  

  • the Dependent Care Tax Credit 

  • the Medical Care Tax Deduction 

  • the Dependent Care Account (a flexible spending account for dependent care needs) 

  • the Medical Flexible Spending Account (only for medical care) 

If you hire through an agency, they will handle filling out forms for the IRS or Social Security. If you hire independently you can do it yourself or employ a separate service, such as HomePay, to handle payroll, prepare tax documents, and establish state and federal tax IDs. Also, many seniors qualify for assistance through Long Term Care Insurance plans or Veterans' Administration (VA) programs. The VA can provide pension benefits that allocate funds used for home care services for a veteran and/or their spouse.  

Theft insurance. Bonding is insurance offered by an agency so that if a caregiver is found stealing, the agency will compensate the client. Check with the agency to see if they provide bonding, as not all do. If you choose to work with an agency that does not provide bonding and an item is stolen and the caretaker is to blame, you have no recourse for compensation. A background check, an in-home monitoring system, and reference checks can minimize risk whether you hire through an agency or independently.  

Scheduling and back-up care. Some agencies require a minimum time requirement, usually four hours per shift, which may make hiring an agency an expensive choice for those who only need short stints of care. Also, hiring a caregiver through an agency to work over weekends or during holidays may be more expensive. Though an agency may be less flexible, finding and hiring an independent caregiver to cover a shift requires additional time and effort. Even with a contract, an independent caregiver may quit or leave the position without warning, or have to take sick leave suddenly, leaving you to find a replacement at the last minute.  

Agencies will always provide backup caregivers should a regular caregiver become ill or need to take leave suddenly. However, you won't have a say in who the replacement will be. Families who hire independently can make sure that the caregiver meets their needs and specifications.  

Quality of care. While an independent caregiver is a free agent, a caregiver hired by an agency is supervised — and, if you have problems with a caregiver, the agency can act on your behalf. However, as the employer of an independent caregiver, you're able to pick the caregiver and make sure they meet your specifications. 

An agency may send various caregivers, instead of assigning one to your family. If your loved one is very social, the possibility of a revolving door of caregivers may be a benefit. But it could be a drawback for a loved one who craves consistency.  

Hiring tips for either type of home care 

Whether you choose to hire an agency or an independent caregiver, keep these tips in mind to make sure the process of bringing a caregiver into your loved one's home goes smoothly. 

  • Determine what you need. Your loved one may only need a limited amount of help, such as errands and cleaning, or they may be at the other end of the spectrum and require nursing care. Since a more hands-on and qualified caregiver will likely be more expensive, find out what's truly needed and consider talking to your loved one's doctor for input. Be prepared to reassess your loved ones' needs regularly. Create a detailed description of job requirements, as well as any cognitive, mental, or emotional issues. 

  • Get some background. If you hire a caregiver independently, consider running a background check, requesting references, and asking for proof of training. CPR and First Aid may be caregiver skill sets you require. If you hire an agency, it's still important to do some sleuthing. Find out what skills the agency requires of their caregivers, and make sure they run background checks. Ask for references from agencies and independent caregivers. 

  • Create scenarios. When interviewing potential caregivers, ask them to role-play their responses to difficult scenarios, such as finding your loved one was being grumpy, refusing to eat, or feeling feverish. This can give insight into their skill level and assure you of whether or not they can handle a difficult situation.  

  • Check in. Whether you hire an agency or an independent caregiver, try to schedule a time during which you are present while the caregiver is assisting your loved one. If possible, try to be present for the first few days of care, and plan one day in which the caregiver can observe you and take notes. Then, schedule a second day in which to observe, answer questions, and make suggestions. 

Read next: How to write a caregiver job description

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