Can You Get Paid to Take Care of a Family Member?

If you’re caring for an aging loved one, you know it’s an expensive commitment. But there are ways to get paid to take care of a loved one with options like Medicaid, Veterans benefits, and tax benefit programs, all of which we’ll explain in more detail below.

It’s important to note that each program has its own eligibility requirements, so you likely won’t be eligible for all of the programs. We recommend reaching out to your local Area Agency on Aging to understand which programs you’re eligible for and what other location-specific benefits may be available.

If you’re caring for a loved one who’s enrolled in your state Medicaid program, they may be eligible to receive funding to pay you for your services. While each state has different eligibility requirements and waivers, most states provide programs for older adults that allow them to access self-directed care. In some cases, that means the participant can choose to employ a family member or another loved one to provide personal care services, and Medicaid will pay for the services they provide.

The Community First Choice (CFC) program is designed for those who would otherwise need to be placed in an institutional setting to obtain care. States that offer CFC programs receive federal funding to pay care providers for their services, and they are required to allow Medicaid members to direct care and choose their own care attendant.

Mandatory services provided through CFC can include:

• Instrumental activities of daily living (IADLs) like shopping, money management, cleaning, and cooking
• Activities of daily living (ADLs) like eating, washing, ambulating, and using the bathroom

Optional services the CFC may provide include:

• Paying for the cost of transitioning out of a facility
• Repayment for items that promote independent living

The Self-Directed Personal Assistance Services (PAS) Plan Option allows eligible Medicaid members to direct their PAS themselves using a State-approved services plan and budget. Beneficiaries are responsible for hiring, supervising, and training the people they employ as PAS providers. That means they also take responsibility for the firing of staff, documentation of services, and management of finances.

HCBS waiver programs allow states to identify specific groups of people with particular needs to receive personalized healthcare within their own homes or in the community instead of a skilled nursing facility. States are able to provide as many HCBS waivers as they like but must show that the waivers ensure a Medicaid member’s health and welfare are prioritized, that it doesn’t cost more than the same services they could receive in a facility, that an individualized plan of care is being used, and that the waiver adequately meets the member’s needs.

• Have income below a specified level, usually similar to Medicaid income limits
• Require a nursing facility level of care
• Have a specific diagnosis, such as HIV/AIDS, autism or epilepsy

It’s difficult to determine an average amount since compensation for family caregivers can significantly vary depending on location and the complexity and amount of care required. There isn’t a universally agreed-upon pay rate for family caregivers.

In several states, Medicaid offers a program called Medicaid Self-Directed Services or In-Home Supportive Services (IHSS) that can potentially compensate family caregivers. This falls under the Medicaid HCBS Waivers, but the specifics differ from state to state, and not all states have this program. For instance, under self-directed care services, family caregivers in the United States earn an average of $10.00 an hour.

But, California’s In-Home Supportive Services program pays caregivers an average of $17.60 per hour for providing care to low-income elderly or disabled individuals. Meanwhile, New York’s Consumer Directed Personal Assistance Program (CDPAP) allows family members to be hired and paid as caregivers with pay rates ranging between $17.55-$21.09 per hour or $26.32-$31.63 per overtime hour.

If you are a family caregiver, we recommend contacting your state’s Medicaid office, a local Area Agency on Aging, or an elder law attorney to understand better the options and limitations that apply to your specific circumstances.

Seniors and other adults who direct their own care as part of the Medicaid program described above must follow specific rules and regulations when selecting their caregivers and determining the services they’ll receive. The state determines these rules and differs with each program; however, most include provisions for person-centered planning, written service plans, budgeting, and case management. Some of the most commonly held guidelines are:

• Person-Centered Planning: These plans are created by the person receiving Medicaid services, allowing them to take control of their care. PCPs outline who provides care, where they receive that care, and what services they need. These plans must also account for what to do in the event of emergencies and who will care for them if their selected caregiver calls out sick or is no longer able to care for them.
• Assigned Budget: Each Medicaid participant who qualifies for services will be assigned an individual budget. The budget is developed in accordance with the Person-Centered Plan created by the individual, taking into account the needs and preferences specified in the plan.
• Support: States must provide information and/or support consultants as to how programs work, available resources, training, and individual rights and responsibilities. Support consultants act as a liaison between the Medicaid program and the individual, providing assistance wherever needed.
• Financial Management Services: Although some states and waivers allow participants to oversee their own budgets, financial management services are recommended to help with cost management and expenditure tracking. Additionally, financial managers can complete payroll for caregivers, ensuring taxes are withheld appropriately and pay is distributed in a timely manner.
• Quality Assurance: States are responsible for making sure they have an effective and reliable way of assuring the quality of their self-directed Medicaid services. Critical incidents or events that affect Medicaid members must be documented, remediated, and improved upon.

Seniors receiving Veterans Affairs (VA) benefits may be able to enroll in benefits to help them pay for a family caregiver. If you’re caring for someone who has served in any branch of the U.S. military, they should receive a monthly pension from the VA that can be partially used to pay for their care. Additionally, there are several other benefits that exist to help veterans pay for personal care services that a family caregiver provides.

Below, you can learn more about the VA programs that pay caregivers for taking care of a family member.

These two VA benefits programs provide monthly payments to veterans or qualifying dependents with a proven need for personal care. The payments must be used to pay for personal care services and may be used to provide a salary for a family caregiver. To qualify for Aid and Attendance benefits, one must be either a veteran or surviving spouse who requires help with daily tasks such as bathing, grooming or other activities of daily living. The Housebound Allowance is available to veterans required to remain at home due to a permanent disability.

Veterans who have long-term or permanent disabilities sustained while in the line of duty may be eligible for funding from the Program of Comprehensive Assistance for Family Caregivers. Funds are distributed to help caregivers cover travel costs, caregiver education and other expenses while providing assistance for a loved one.

The IRS provides several provisions for claiming your older loved ones as dependents on your annual income tax return. If you take advantage of any of these benefits, keep detailed records and copies of receipts for any related medical expenses.

If you’re caring for a loved one and paying their expenses out of your pocket, you may be eligible to claim the Credit for Other Dependents on your income taxes, a $500 non-refundable credit.

This provision allows you to claim your older loved one as a dependent provided you’re both U.S. citizens with valid identification numbers, and both of your incomes are less than that year’s tax cutoff amount.

Additionally, your loved one must be dependent on you, meaning that you pay a minimum of 50% of their living expenses, and they must have lived at the same address as you for the entire tax year. If you’re claiming a dependent under this provision, anyone else may not claim you as a dependent.

The IRS allows single taxpayers claiming dependent relatives to claim as the Head of Household, which raises the standard deduction amount. To claim as the Head of Household, a dependent relative needs to have lived in your residence for a minimum of half the tax year.

Suppose you’re paying for medical expenses for a dependent loved one, and with no reimbursement by insurance or other benefits. In that case, you can claim the amount on your tax return, provided the total expense is more than 7.5% of your adjusted gross income. A variety of healthcare expenses, including medications, copayments, and adult day care, are covered under this provision. This option is only available if you aren’t taking the standard deduction, and your parent’s income falls below the cap of $5,050 in 2024.

Click on your state on the map below to see which organizations and programs may be available to help you get paid for taking care of your loved one.

How can I get paid to take care of my parents?

Speak with your parents about benefits they may be eligible for, such as Medicaid waivers and Veterans Affairs programs that can help them pay for in-home care. Some of these programs allow elderly adults to direct their own care, which means they can hire family caregivers and use the benefits to pay for your services.

Are there tax benefits for caregivers?

If a loved one is dependent on you, you may be able to claim some expenses related to their care. That includes medical expenses that you’ve paid for on their behalf. Additionally, if your loved one is living in your home, you may be eligible to claim the Credit for Other Dependents, a $500 tax credit that’s available to those providing full-time care to a family member or friend.

Does Medicaid pay family caregivers?

While standard Medicaid doesn’t provide payments for family caregivers, waiver programs in most states allow beneficiaries to self-direct their care. Under these waivers, beneficiaries may be able to select a family caregiver, and Medicaid will provide funding to pay for their services.

Does Medicare pay for a family caregiver?

Medicare does not typically pay for long-term family caregivers; however, it may provide funding for caregiver training for family members, assistance with case management or funding for short-term care if a loved one is recovering from an illness or injury.