Programs to Get Paid for Family Caregiving: Your Comprehensive Guide

More than 53 million Americans are family caregivers, with over 34 million caring for adults aged 50 and above.¹ If you’re among them, you likely see your support as an act of love. However, the value of your care extends far beyond emotional support. Family caregivers collectively save healthcare systems billions annually by preventing hospitalizations and emergency room visits for aging adults. Your dedication ensures medication adherence, benefiting pharmaceutical companies, and frees up vital healthcare resources.

AARP estimates the collective contribution of family caregivers at over $600 billion per year, based on the average hourly pay for professional home care.² Despite this immense value, most family caregivers remain unpaid.

Alarmingly, around 40% of caregivers reduce their work hours or leave their jobs entirely to manage caregiving responsibilities.³ This leads to lost income, retirement savings, and Social Security contributions. Many caregivers deplete their savings and incur debt to cover approximately $7,200 annually in out-of-pocket caregiving expenses.⁴ This financial strain is unsustainable for families and the public health system. Fortunately, various programs offer financial relief for family caregivers. It’s crucial to explore existing compensation avenues to alleviate this burden.

How to Get Paid Through Medicaid Programs

Understanding Medicaid

Medicaid is a government program providing healthcare coverage to eligible U.S. citizens. Each state manages its own Medicaid program, with specific rules, eligibility criteria, and benefits, while adhering to federal guidelines. Some state Medicaid programs offer payment to family members who provide care to eligible individuals.

Medicaid Eligibility Criteria

Individuals over 65 and those with disabilities may qualify for Medicaid based on income restrictions. In 2024, state income limits for Medicaid Home and Community Based Services or Waivers range from approximately $914 to $2,742 per month. Furthermore, applicants may need to spend down their assets on healthcare expenses to meet Medicaid’s financial requirements for long-term care coverage.

Medicaid Payment Options for Family Caregivers

Medicaid Personal Care Services (PCS): This benefit covers assistance with Activities of Daily Living (ADLs) such as bathing, dressing, and meal preparation. PCS requires a physician’s order, a documented care plan, and nurse supervision. Many states allow family members to be paid caregivers under PCS.
Medicaid Home and Community-Based Services (HCBS) 1915(c) Waivers: HCBS Waivers enable states to fund long-term care in home and community settings as alternatives to nursing homes. These waivers can cover personal care, adult day health services, and respite care for individuals needing nursing home-level care but who can remain at home with support. Numerous states with HCBS Waivers compensate family members for personal care services. You can check your state’s participation in these waivers on the State Waivers List at Medicaid.gov.

How Medicaid Caregiver Payments Work

Many states offer “consumer-directed” or “self-directed” care options within their Medicaid programs. These options allow eligible individuals to hire family members as paid caregivers for Personal Care Services. Programs may be known as Consumer-Directed Personal Assistance Services, Cash & Counseling, or Self-Directed Services.

Family caregivers typically need to meet state-specific training or certification requirements, often including background checks. Pay rates are generally aligned with local home care aide wages, ranging from $13 to $18 per hour or higher.⁵

Steps to Become a Paid Family Caregiver Through Medicaid

The process varies by state, but generally involves these steps:

Determine Medicaid Eligibility and Family Caregiver Payment: Contact your state’s Medicaid program to verify your family member’s eligibility and whether the state pays family caregivers. You can find state contact information on the Medicaid website.
Medicaid Enrollment: If eligible and family caregiver payment is available, work with the state Medicaid office to enroll your family member. This process can take several weeks to months.
Self-Directed Care Application: Collaborate with the Medicaid office to complete the necessary paperwork for the self-directed care benefit, including obtaining a physician’s order for Personal Care Services for your family member.
Training and Certification: Fulfill any required training and certification processes mandated by your state.

How to Get Paid Through the U.S. Department of Veterans Affairs (VA)

Understanding the VA

The VA is a federal agency dedicated to providing benefits and services to veterans and their families. It offers a wide range of support, including healthcare, education, disability compensation, and more.

The VA offers four programs that compensate family members caring for older or disabled veterans, or their surviving spouses:

Aid and Attendance Pension Benefit (A&A)
Housebound Pension Benefit
Program of Comprehensive Assistance for Family Caregivers (PCAFC)
Veteran Directed Care (VDC)

VA Payment Programs for Family Caregivers

Aid and Attendance Pension Benefit (A&A)

Eligibility: Veterans or surviving spouses eligible for a basic VA pension or survivor pension may qualify for A&A if they need assistance with ADLs or have Alzheimer’s disease.
Program Details: A&A provides a monthly cash allowance to the veteran or surviving spouse, which they can use at their discretion, including paying certain family members for in-home care. Spouses cannot be paid under this program.

Housebound Pension Benefit

Eligibility: Veterans or surviving spouses eligible for a basic VA pension or survivor pension may qualify if they are permanently disabled and unable to leave home.
Program Details: This benefit provides a cash allowance to hire a non-spouse friend or relative for in-home care.

Program of Comprehensive Assistance for Family Caregivers (PCAFC)

Eligibility: Veterans with a VA disability rating of at least 70% due to a service-connected critical injury or illness, requiring at least six months of personal care for inability to perform one ADL or needing supervision, and enrolled in VA healthcare may be eligible.
Program Details: PCAFC offers monthly cash stipends to family caregivers, along with education, training, counseling, and up to 30 days of respite care annually.

Veteran Directed Care (VDC)

Eligibility: Veterans enrolled in VA medical benefits requiring skilled services and ADL assistance may qualify.
Program Details: VDC provides a monthly budget (not direct cash) to veterans for care needs, including caregiver payments (adult child, grandchild, spouse, or other relative) and medical equipment. A service organization manages the budget and payments. This program is available in 43 states, Washington D.C., and Puerto Rico, with expansion ongoing. Contact your local Area Agency on Aging (AAA) for local availability.

Steps to Become a Paid Family Caregiver Through the VA

Navigating VA programs can be complex. The Elizabeth Dole Foundation and the American Legion (202-263-5759) offer support to military caregivers accessing VA benefits.

How to Get Compensated Through Paid Family Leave

Understanding Paid Family Leave

Paid family leave builds upon the federal Family Medical and Leave Act (FMLA), which offers unpaid, job-protected leave. State paid family leave laws provide partial or full income replacement for workers who need to take time off to care for a family member with a serious health condition. Currently, 11 states (California, Colorado, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, and Washington) and Washington, D.C., have paid family leave programs. Delaware, Maine, Maryland, and Minnesota will join in 2025 and 2026.

Some employers also offer their own paid family leave policies. Check with your HR department about your employee benefits, regardless of your state’s paid leave status.

Paid Family Leave Eligibility

Each state with paid family leave sets its own eligibility requirements, wage replacement levels, leave duration, and family member definitions. Resources like RubyWell provide details on state-specific family leave laws.

How Paid Family Leave Works

Paid family leave operates differently across states.

Some states automatically provide income replacement for eligible employees working for participating employers. Participating employers often align with federal FMLA requirements: public employers and private employers with 50+ employees who have worked for at least a year and 1,250 hours in the prior 12 months.

Other states offer voluntary state paid leave insurance programs, allowing residents or workers, including those in smaller companies or self-employed individuals, to buy into coverage.

Steps to Become a Paid Family Caregiver Through Paid Family Leave

Once you’ve confirmed your paid family leave eligibility, follow your state or employer’s application process, which typically includes:

Notify Your Employer: Inform your employer of your need for family leave.
Healthcare Provider Certification: Obtain written certification from your loved one’s healthcare provider detailing their health condition and care needs.
Employer Forms: Your employer will provide forms to complete and return.
State Application: Your state may have an online portal for paid family leave applications.
Timely Notification: Provide at least 30 days’ notice to your employer if leave is planned, or as soon as possible if unexpected.

How to Get Paid Through Long-Term Care Insurance (LTCI)

Understanding Long-Term Care Insurance

Long-term care insurance (LTCI) is private insurance covering costs for various long-term care services like nursing homes, in-home care, and assisted living for individuals needing ADL assistance. LTCI provides more flexibility compared to government programs like Medicaid, which have strict financial limitations.

LTCI Eligibility for Family Caregiver Payment

Approximately 3% of adults over 50 have LTCI, due to limited awareness and cost.⁶ Policies can range from a few thousand to $10,000 annually, based on age, health, and coverage levels.

Some LTCI policies only cover facility-based care, not in-home care. Among those covering in-home care, only some pay family members (“informal caregivers”). If your loved one has an LTCI policy that covers informal caregivers, you may be eligible for payment. Policies often require meeting benefit eligibility criteria, such as needing assistance with a minimum number of ADLs or cognitive impairment.

How LTCI Payments Work

LTCI payments can be structured in two ways:

Cash Payments: Policies allowing cash payments for informal care send the monthly benefit directly to the policyholder, who can then pay the family caregiver.
Reimbursement: For reimbursement policies, submit invoices or care documentation. The insurance company reimburses the policyholder for covered costs.

Steps to Become a Paid Family Caregiver Through LTCI

Initiate a Claim: Once LTCI eligibility and informal caregiver coverage are confirmed, you or your family member should initiate a claim with the insurance company.
Assessment and Care Plan: The insurer may require an assessment or care plan detailing the required care level.
Elimination Period: Most policies have an “elimination period” (similar to a deductible) before benefits begin, during which you won’t be paid.
Claim Payments: After the elimination period, you can start claiming payments from the LTCI provider.

For more information, refer to this NCOA partner resource on LTCI and family caregiver payments.

How to Get Paid Through a Personal Care Agreement

Understanding Personal Care Agreements

A personal care agreement is a legally binding contract designating a family member as a paid caregiver. It specifies the caregiver’s responsibilities and compensation. This document is especially useful for Medicaid planning, providing proof of asset spend-down on healthcare. Without it, payments to family caregivers may be considered gifts and could negatively impact Medicaid eligibility.

Eligibility for Personal Care Agreements

Any family can establish a personal care agreement if they have the financial means and desire to compensate a family caregiver.

How Personal Care Agreements Work

The agreement outlines caregiver duties, responsibilities, and compensation based on local professional care rates. Once in place, the care recipient can pay the caregiver according to the agreed schedule.

Steps to Become a Paid Family Caregiver Through a Personal Care Agreement

Family Discussion: Discuss the personal care agreement option with your family.
Rate Research: Research local in-home caregiver rates to determine a fair hourly wage.
Legal Consultation: Consult with an elder law attorney to draft the agreement if the family agrees to this option.
Record Keeping: Maintain detailed records of care hours, expenses, and payments received.

Compensation: Limited Access, Growing Hope

Current paid caregiving options primarily serve specific groups:

Caregivers of low-income individuals eligible for government aid.
Caregivers of those who can afford LTCI or out-of-pocket payments.
Caregivers of certain veterans.
Caregivers in paid family leave states who can balance employment and caregiving (limited to 12 weeks of pay per year).

Many family caregivers don’t fit into these categories. However, organizations like RubyWell are innovating solutions to address this care crisis. Advocacy for supportive state and federal policies is crucial to expand access to these solutions for all family caregivers.

FAQ

How Much Do Family Caregivers Get Paid?

Pay rates vary based on the payer, program, and state. Compensation should reflect local professional caregiver rates.

To determine local rates:

Contact home care agencies in your area to inquire about hourly rates for in-home caregivers.
Refer to resources like this article which lists average hourly and monthly rates for in-home caregivers by state.

Are There Tax Benefits for Paid Family Caregivers?

Yes, several tax benefits exist for family caregivers:

Credit for Other Dependents: Potentially save up to $500.
Medical Expense Deduction: Deduct unreimbursed medical expenses exceeding 7.5% of adjusted gross income, including home healthcare and home modifications.
Head of Household Filing Status: Possible for caregivers meeting specific requirements, like paying over half of household expenses.
Child and Dependent Care Credit: Reimburses up to $3,000 for care expenses while working, even if the care recipient isn’t a dependent but resides with you and is unable to self-care.

See Money Saving Tips for Family Caregivers for detailed tax credit information.

Are There Training Requirements for Paid Family Caregivers?

Training requirements depend on the payer, program, and state. Personal care agreements and paid family leave typically don’t require training. However, government-funded programs and LTCI policies often mandate state-recognized training or certification for compensation eligibility.

Regardless of requirements, training enhances caregiver confidence and care quality. Healthcare providers may offer family caregiver training, and a new Medicare rule in 2024 reimburses providers for offering such training.

Sources

National Alliance for Caregiving and AARP. Caregiving in the U.S. Found on the internet at:https://www.caregiver.org/resource/caregiver-statistics-demographics/
AARP. Valuing the Invaluable 2023 Update: Strengthening Supports for Family Caregivers. Found on the internet at: https://www.aarp.org/pri/topics/ltss/family-caregiving/valuing-the-invaluable-2015-update/
Family Caregiver Alliance. Caregiver Statistics: Work and Caregiving. Found on the internet at https://www.caregiver.org/resource/caregiver-statistics-work-and-caregiving/
AARP. Family Caregivers Spend More Than $7,200 a Year on Out-of-Pocket Costs. Found on the internet at https://www.aarp.org/caregiving/financial-legal/info-2021/high-out-of-pocket-costs.html
Care.com. Here’s the average monthly in-home caregiver salary in every state. Found on the internet at: https://www.care.com/c/average-in-home-caregiver-salary-by-state/
JRC Insurance Group. Long-Term Care Statistics 2022. Found on the internet at: https://www.jrcinsurancegroup.com/long-term-care-statistics/