Live-In and 24-Hour Care Deposits: Collecting Upfront Safely

On this page 8 sections

1. Why Live-In and 24/7 Cases Need a Home Care Deposit
2. How Much to Collect: Sizing a Live-In Care Retainer
3. Card, ACH, or Wire for 24-Hour Home Care Prepayment
4. Applying the Deposit to Invoices vs. Holding It in Reserve
5. Refundable Home Care Deposit Terms When Care Ends Suddenly
6. State Rules on Prepayment for Home Care Services
7. Building Your Home Care Advance Payment Policy
8. Next Steps

Key takeaways

• Size the deposit to cover the payroll you owe before the first invoice is paid, using an option such as a two-week or monthly retainer.
• ACH is cheaper than card for large prepayments, wires are hard to reverse, and cards bring the most dispute risk.
• Decide in writing whether the deposit covers upcoming invoices or is held until care ends, then track it as client money.
• Refund terms should say what happens after hospitalization, a move to a facility or death. Confirm them with a qualified professional.

A live-in or round-the-clock case is often the largest private-pay account a home care agency carries. It is also the account where one missed payment hurts most. A home care deposit keeps your agency from carrying weeks of caregiver payroll before the family pays. This guide covers how to size a retainer for live-in and 24/7 cases and which payment method to use for large upfront amounts. It also explains how to apply or hold the money and how to write refund terms that still work if the client is hospitalized, moves to a facility or dies.

Why Live-In and 24/7 Cases Need a Home Care Deposit

Hourly cases of a few visits a week rarely create much exposure. Continuous care works differently:

• Payroll runs ahead of collections. You pay caregivers on your payroll cycle whether or not the family's payment has cleared. A 24/7 case staffed in shifts can put several caregivers on payroll for one client.
• Invoices are large. A month of live-in or 24-hour care can be one of the biggest bills a family pays all year. A declined card or a bounced debit leaves a large gap.
• Care often starts fast. Many of these cases begin on short notice, such as after a hospital discharge or when a family caregiver can't continue. That leaves little time to vet the payer.
• Reimbursement lags. Families relying on long-term care insurance may pay first and claim reimbursement later, and policies can include a waiting period before benefits start. The family's cash may be tight early on, which is exactly when you are most exposed.

A deposit doesn't replace good billing. It gives you a cushion while your normal weekly or biweekly invoicing catches up.

How Much to Collect: Sizing a Live-In Care Retainer

Base a live-in care retainer on your billing cycle plus the time it takes payments to clear. Say you bill weekly and the family pays by ACH. You may not see funds until well into the second week of care. The deposit should cover at least that window.

Two-Week vs. Monthly Retainers

Illustrative example: if a 24/7 case bills about $5,000 a week, a two-week retainer would be about $10,000. A monthly retainer would be roughly $21,000 to $22,000. These figures are examples, not market rates. Run your own numbers from your rate sheet and payroll costs.

Practical sizing rules:

• Match the deposit to actual exposure, not the most the family might pay. Oversized deposits make refunds harder and draw more attention when something goes wrong.
• Consider a smaller deposit for ACH autopay clients and a larger one for clients paying by mailed check.
• Re-size the deposit when the care plan changes, for example when coverage moves from 12 hours to 24 hours. Get a signed addendum when you do.

Card, ACH, or Wire for 24-Hour Home Care Prepayment

Each method has a different mix of cost, speed and reversal risk for a large 24-hour home care prepayment.

Cards: Convenient but Costly on Large Tickets

Families often want to put the deposit on a card, especially a rewards card. On large tickets, percentage-based fees add up quickly. Our breakdown of credit card fees on large monthly home care invoices walks through the math. If you're thinking about passing costs on to families, read up on whether home care agencies can add a credit card surcharge before you change your pricing.

For phone payments, use a virtual terminal for keyed card payments so no one writes down or stores card data in your office. Collect a signed authorization that names the cardholder, the amount and the purpose, for example "deposit for live-in care services beginning on [date]."

If a payer's card can't handle the full deposit, offer ACH or a wire. Don't break one deposit into several charges on the same card to get around a decline or a limit. Card network rules generally prohibit that, and it can put your merchant account at risk.

Tell Your Processor About Your Deposit Model

Prepaid future services increase your processor's risk. If the agency fails to deliver care, cardholders can dispute the charges. A sudden jump in ticket size can also trigger a review or a hold. Disclose deposits during underwriting and before you start taking larger payments. Our article on why processors hesitate with home care agencies explains what underwriters look for.

MannyPay supports payment processing for home care and medical staffing businesses. That includes card, online and gateway options such as Authorize.net and NMI, plus QuickBooks integration for reconciliation. Approval and terms depend on underwriting.

Wires: Verify Before Anyone Sends Money

Wires are hard to recall. That protects you, but it also makes families a target for payment-instruction fraud. Give wire instructions only through a channel you've verified, and tell families you will never change bank details by email alone.

Applying the Deposit to Invoices vs. Holding It in Reserve

Choose one model and state it plainly in the service agreement. Disputes often arise when an agency mixes the two.

Model 1: Prepaid billing (applied to invoices). The deposit pays the first one or two billing periods. After that, the family pays each invoice in advance or on receipt, which keeps the cushion in place as you go.

• Pros: simple for families to understand, with little money left to refund at the end.
• Cons: the cushion disappears if the family stops paying and you don't catch it quickly.

Model 2: Held retainer (reserve). The deposit stays untouched while the family pays each invoice normally. You apply it to the final invoice or to unpaid balances and refund anything left over.

• Pros: protection lasts for the whole case.
• Cons: larger refunds at the end and more record-keeping.

Whichever you pick, treat the money as client funds until earned:

• Track deposits separately in your books, often as a liability until you deliver the services. Confirm the right treatment with your CPA.
• Show the deposit balance on every statement.
• Some states may have rules on how agencies hold or disclose advance client funds. Check before you commingle deposits with operating cash.

Refundable Home Care Deposit Terms When Care Ends Suddenly

Continuous-care cases often end without warning. Your refund terms should cover each scenario in plain language so families aren't negotiating refunds during a crisis.

Hospitalization

Decide in advance whether care is paused or held:

• Paused: billing stops at the end of the last shift worked. The deposit stays on account, or you refund it if the client doesn't return within a stated period.
• Held: the family pays to keep the same caregiver available. Disclose any hold rate and get the family's written agreement before care starts. Don't spring it on a family mid-crisis.

Move to a Facility

If the client moves to assisted living, memory care or a nursing facility, spell out:

• How much notice the family must give, and whether you waive notice for medically driven moves
• That billing ends after the final shift worked, plus any disclosed notice charges
• How quickly you will reconcile and refund the remaining balance

The Client's Death

Vague contracts cause the most harm here. Your agreement should state:

• That charges end after the last shift worked, or after any short, clearly disclosed period
• Who receives the refund: the original payer, or the client's estate if the client paid from their own funds
• A firm timeline for the final statement and refund

Refund to the original payment method whenever possible, since card networks generally expect card refunds to go back to the card that was charged. If the client's own account is frozen after death, you may need direction from the executor. Our guides to collecting the final invoice after a client dies and who can authorize billing under a power of attorney cover the authority questions. A power of attorney generally ends at death, so confirm with an attorney who can act for the estate.

Refunding quickly and clearly also helps prevent chargebacks. Families left waiting a long time for a deposit back may file a dispute instead. See how agencies handle disputes over caregiver hours for the documentation that helps you respond.

State Rules on Prepayment for Home Care Services

States regulate home care in different ways. Depending on where you operate, rules may cover:

• Licensing of non-medical home care and home health agencies
• Required disclosures in client service agreements, including charges and refund policies
• Notice of rate changes
• How much notice agencies may require before termination, and what happens to unused prepayments
• Consumer protection laws on deposits for future services

Public payers add another layer. If Medicaid, a waiver program or the VA pays for some or all of a client's care, program rules may limit what you can collect directly from the client for covered services. Long-term care insurance policies also have their own claim and documentation requirements.

These rules vary and change. Check with your state licensing agency and consumer protection office, and have an attorney familiar with home care review your agreement. This article is general information, not legal or tax advice.

Building Your Home Care Advance Payment Policy

Use this checklist when you draft or update your home care advance payment policy:

1. State the deposit amount and how you calculated it, for example two weeks of scheduled care.
2. Name the payer and the authorized decision-maker. If adult children are paying, see our guide to setting up family members as payers.
3. Choose prepaid billing or a held retainer, and say which one you use.
4. List accepted payment methods and any cost differences between them, following card network and state rules.
5. Spell out what happens after hospitalization, a facility move or death, including any hold rates.
6. Commit to a refund timeline and refund to the original payment method.
7. Disclose any non-refundable charges, such as an assessment fee, separately from the deposit.
8. Keep shift records, visit verification logs and signed timesheets to support every invoice.
9. Have the family sign the agreement and a separate payment authorization.

Next Steps

Three things protect both your payroll and the family's trust: a deposit sized to your real exposure, a clear apply-or-hold model, and refund terms written for the hard moments. Start by reviewing your current service agreement against the checklist above. Then talk with your processor about the payment methods and ticket sizes you plan to support.

If you'd like help setting up card and online payments for continuous-care clients, request a free processing quote from MannyPay. A MannyPay specialist will respond within one business day.

ME

About the author

MannyPay Editorial Team

Beyond the Swipe's editorial desk researches the publication's guides and news and cites its sources in every article. Articles reviewed by a named MannyPay editor carry that editor's byline.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.