If you're a family member providing care for an aging parent, spouse, or relative who is on Medicaid, you may be able to get paid for that care — legally, through a state Medicaid program. These programs exist specifically to allow people who receive long-term care services to hire and direct their own caregivers, including family members.
This guide explains how these programs work, which states offer them, what family members typically get paid, and how to apply.
How Family Caregiver Payment Programs Work
Traditional Medicaid long-term care services are delivered by agencies — home health aides come to your home through a third-party vendor. Self-directed Medicaid programs take a different approach: the Medicaid beneficiary (the person receiving care) is given a budget and the ability to hire their own caregivers, including trusted family members.
The family member caregiver is treated as an independent worker. They receive a paycheck — typically funded through a Fiscal/Employer Agent (F/EA) that handles payroll and taxes on behalf of the Medicaid program. The person receiving care directs the work: setting schedules, tasks, and expectations.
State Programs That Pay Family Caregivers
Most states have at least one Medicaid program that allows a family member to be compensated as a caregiver. These programs go by many names:
| State | Program Name | Notes |
|---|---|---|
| New York | CDPAP (Consumer Directed Personal Assistance Program) | One of the most comprehensive; allows almost any relative except spouse in most cases |
| California | IHSS (In-Home Supportive Services) | Spouses generally not eligible; adult children commonly paid |
| Texas | CDS Option (Consumer Directed Services) | Available through several Medicaid waiver programs |
| Florida | iBudget Florida Waiver | For individuals with developmental disabilities |
| Pennsylvania | Participant-Directed Service option | Available under Community HealthChoices |
| Ohio | MyCare Ohio / PASSPORT Waiver | Allows family members with exceptions |
| Massachusetts | PCA Program (Personal Care Attendant) | Adult children allowed; spouses sometimes permitted |
How Much Do Family Caregivers Earn?
Compensation is set by each state and typically reflects the state's personal care aide wage rate. In 2025–2026, rates generally range from $12 to $22 per hour, depending on the state and program. Some programs also allow:
- Overtime pay for hours worked beyond 40/week
- Paid sick leave and vacation time
- Workers' compensation coverage
- Mileage reimbursement for transportation services
Who Qualifies?
For the Medicaid beneficiary (the person receiving care) to use a self-directed program, they generally must:
- Be enrolled in Medicaid (meet income and asset limits)
- Qualify for a home- and community-based services (HCBS) waiver
- Have a documented functional need for assistance with activities of daily living (bathing, dressing, meal prep, mobility, etc.)
- Be able to direct their own care (or have a representative who can)
For the family caregiver, requirements typically include:
- Being at least 18 years old
- Passing a background check
- Completing required caregiver training (often provided by the program)
- Not being a legally responsible relative in states that restrict it
How to Apply
The process varies by state, but generally works like this:
- Apply for Medicaid — if the care recipient isn't already enrolled, they must qualify first
- Request HCBS waiver services — ask the state Medicaid agency about home- and community-based services waivers
- Request a functional assessment — a care manager will evaluate the level of care needed
- Ask for the self-directed option — specifically request the consumer-directed or self-directed care option
- Choose a Fiscal/Employer Agent — the F/EA handles payroll, taxes, and paperwork
- Hire your family caregiver — once approved, the caregiver completes paperwork and begins receiving payment
If your loved one has both Medicare and Medicaid, a D-SNP plan may provide additional coordinated benefits and support. Talk to a licensed advisor today — free, no obligation.
Call 1-866-340-3441Frequently Asked Questions
Can I quit my job to become a paid caregiver through Medicaid?
Some family members do leave employment to provide full-time care through these programs. The decision depends on the pay rate in your state, the hours of care authorized, and your financial situation. A financial counselor can help you evaluate the trade-offs.
Are payments to family caregivers taxable?
Yes — payments made through Medicaid self-directed programs are generally treated as earned income and are subject to federal income tax, Social Security, and Medicare taxes. The Fiscal/Employer Agent handles withholding.
What if there's a waiting list?
Many HCBS waiver programs have waiting lists. While waiting, look into other options: the Veterans Administration (VA) has caregiver support programs for eligible veterans, and some states have emergency pathways for those with urgent needs.