Should a Home Care Agency Collect a Deposit from Private-Pay Clients?
Yes, for most private-pay clients: one to two weeks of scheduled care, applied to the final invoice, or weekly billing in advance. How much, how to word it, and when a deposit is not allowed.
By Caregiver Scheduling Team ·
Yes, for most private-pay clients. Collect one to two weeks of scheduled care before the first visit, hold it during service, and apply it to the final invoice. Or skip the deposit and bill each week in advance. Either way you close the gap between paying caregivers on Friday and getting paid by the family weeks later. Never collect a deposit from a Medicaid client, and put every deposit term in the service agreement.
Why collect a deposit at all?
Because you are the family’s lender if you do not. You pay caregivers every week or two, while a family on net-15 terms pays three to five weeks after care starts.
The numbers are not small. The 2025 CareScout Cost of Care Survey puts the national median for non-medical in-home care at $35 an hour. Here is the exposure on a typical 20-hour-a-week client billed in arrears.
| Week | Care delivered | Caregiver pay out | Family payment in | Your cash position |
|---|---|---|---|---|
| 1 | 20 hours, $700 billed | $400 | $0 | minus $400 |
| 2 | 20 hours, $700 billed | $400 | $0 | minus $800 |
| 3 | Invoice for weeks 1 to 2 sent | $400 | $0 | minus $1,200 |
| 4 | Net-15 payment due | $400 | $1,400 | minus $200 |
A two-week deposit of $1,400 turns that minus $1,200 into a small positive balance for the whole period. For more on the gap, see home care late payment.
How much should the deposit be?
One to two weeks of the scheduled hours at the agreed rate, scaled to the risk.
| Client situation | Suggested deposit | Why |
|---|---|---|
| Hourly care, under 30 hours a week | 1 week of scheduled care | Low weekly exposure |
| Hourly care, 30 hours and up | 2 weeks | Larger weekly bill |
| 24-hour or live-in care | 2 weeks | Highest exposure, often $5,000 plus a week |
| Long-term care insurance client | 2 weeks | Insurer reimburses the family, often 30 to 60 days later |
| Short-term respite, under 2 weeks | Full prepayment | No ongoing relationship to collect against |
| Medicaid or waiver client | None | Not permitted, see below |
Quote the deposit as hours, not just dollars, so it adjusts if the schedule changes. For rate-setting, see how much to charge for home care or the hourly rates directory.
Deposit, prepayment or card on file: which is better?
A deposit suits families who want a monthly invoice. Weekly prepayment suits families who want predictable charges. Card on file is the least paperwork and the most risk if a card declines.
| Approach | How it works | Watch out for |
|---|---|---|
| Deposit | 1 to 2 weeks held, applied to the final invoice | Refund timing must be in writing |
| Prepay weekly | Invoice each Monday for the coming week, true up for changes | Credits for cancelled visits |
| Card or ACH on file | Charge after each billing period | ACH debits need a signed authorization |
For automatic bank debits, Regulation E requires that preauthorized transfers be authorized by a writing signed or similarly authenticated by the client, with a copy given to them (12 CFR 1005.10).
Can you charge a deposit to Medicaid or VA clients?
Not to Medicaid clients. Providers must accept the Medicaid payment, plus any cost sharing the state plan requires, as payment in full (42 CFR 447.15). A deposit or any other charge to the client on top of that violates your provider agreement. Check other payer contracts too. See private pay vs Medicaid.
What has to be in the service agreement?
The amount, when it is collected, what it can be applied to, and when and how it is refunded. Several states require written fee disclosure before care begins. Pennsylvania, for example, requires agencies to give consumers fees and total costs on an hourly or weekly basis before services start, and bars agencies from requiring a client to endorse checks over to the agency.
Cover these points in plain language:
- Amount in hours and the dollar figure at today’s rate.
- Timing: due before the first visit.
- Application: held, not applied to monthly invoices, and used against the final invoice.
- Refund: any balance refunded within 14 or 30 days of the final invoice, with a written statement.
- Deductions: only unpaid invoices and late cancellation fees under the cancellation policy.
- Death or hospitalization: refund in full after final charges, with no penalty.
- Rate changes: whether the deposit is topped up when rates rise.
Put the clause in the client service agreement and show the deposit on every invoice. Most refund disputes come from a family who forgot the deposit existed; a line on each invoice prevents that.
How Caregiver Scheduling handles this
Every visit is GPS-verified at check-in and check-out, so the hours on your final statement match the care that was actually delivered. Private-pay invoices built from those verified visits are coming soon. $199/month for up to 10 caregivers or $299/month for up to 50, free for 30 days.
FAQ
How much deposit should a home care agency ask for? One to two weeks of scheduled care at the agreed rate. Two weeks for 24-hour care, long-term care insurance clients, or any family paying after reimbursement.
Is a home care deposit refundable? It should be, less unpaid invoices and any fees named in the agreement. Say exactly when the refund arrives.
Can I charge a deposit to a Medicaid client? No. Medicaid providers must accept the state’s payment as payment in full.
This article is general information, not legal advice. Check your state’s home care licensing and consumer protection rules.