What Programs Pay You to Take Care of a Family Member?

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 might see your support as an act of love. However, this doesn’t diminish its immense value. Beyond the obvious benefits for your loved one, your care significantly alleviates pressure on healthcare systems and insurance providers, saving billions annually by reducing hospital and emergency room visits for older adults. You contribute to the pharmaceutical industry by ensuring medication adherence and free up crucial hospital resources for others in need.

Studies by organizations like AARP have quantified this value, estimating that family caregivers collectively provide over $600 billion worth of unpaid care each year, based on the average hourly rate for professional home care.² Despite this enormous contribution, few family caregivers receive financial compensation for their dedication.

In fact, approximately 40% of family caregivers have had to reduce their working hours or leave their jobs entirely to manage their caregiving responsibilities.³ This results not only in lost income but also in reduced retirement savings through 401(k) and Social Security contributions. The financial strain is compounded by out-of-pocket caregiving expenses, averaging around $7,200 per year for the typical family caregiver.⁴

This situation is financially unsustainable for caregivers and poses challenges for our public health infrastructure. Fortunately, various initiatives are emerging to address this issue, and some compensation opportunities are already available for family caregivers.

How to Get Paid by Medicaid for Family Caregiving

Understanding Medicaid

Medicaid is a government program designed to assist eligible U.S. citizens with healthcare costs. Each state administers its own Medicaid program, resulting in variations in eligibility criteria, regulations, and benefits. However, all state programs must adhere to federal Medicaid guidelines. Crucially, some state Medicaid programs offer payment to family members who provide care for eligible individuals.

Medicaid Eligibility for Care Recipients

Medicaid eligibility, particularly for long-term care services, is typically based on age, disability, and income. Individuals over 65 and those with disabilities may qualify if they meet specific income limitations. In 2024, state income limits for Medicaid Home and Community Based Services or Medicaid Waivers can range from approximately $914 to $2,742 per month. Furthermore, Medicaid often requires individuals to spend down their assets on healthcare expenses to qualify 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, eating, and toileting. PCS requires a physician’s order, a documented care plan, and nursing supervision. Many state Medicaid programs allow payment to family members who provide PCS to their loved ones.
Medicaid Home and Community-Based Services (HCBS) 1915(c) Waivers: These waivers enable states to fund long-term care services in home and community settings as an alternative to nursing homes. HCBS waivers can cover services like personal care, adult day health services, and respite care for individuals who require nursing home level care but can remain at home with support. Many states with HCBS waivers permit payment to family caregivers for personal care services. You can check the State Waivers List on Medicaid.gov to see if your state participates.

How Medicaid Caregiver Payment Works

Many states offer “consumer-directed” or “self-directed” care options within their Medicaid programs. These options empower Medicaid recipients to hire family members as paid caregivers for Personal Care Services. These programs are known by various names, including Consumer-Directed Personal Assistance Services, Cash & Counseling, and Self-Directed Services.

Family caregivers typically need to fulfill state-specific training or certification requirements, which may include background checks. Pay rates for family caregivers under these programs are generally aligned with the prevailing rates for home care aides in the state, potentially ranging from $13 to $18 or more per hour.⁵

Steps to Become a Paid Family Caregiver Through Medicaid

The process to become a paid family caregiver through Medicaid varies by state. Generally, the steps involve:

Confirming Medicaid Eligibility and Family Caregiver Payment: First, verify if your family member is eligible for Medicaid and whether the state Medicaid program allows payment to family caregivers. Contact your state’s Medicaid program for this information. (https://www.medicaid.gov/about-us/where-can-people-get-help-medicaid-chip/index.html)
Medicaid Enrollment: If both conditions are met, work with the state Medicaid office to enroll your family member in the program. This process can take several weeks to months.
Self-Directed Care Application: Collaborate with the state Medicaid office to complete the necessary application paperwork for the self-directed care benefit. This may include obtaining a physician’s order for Personal Care Services for your family member.
Training and Certification: Complete any required training and certification processes as mandated by the state.

How to Get Paid by 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. The VA offers a wide array of support, including educational programs, rehabilitation, disability compensation, home loans, pensions, burial services, and comprehensive healthcare through VA medical facilities.

The VA currently has four programs that can provide compensation to 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 Options 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 (bathing, dressing, meal preparation, medication management) or have Alzheimer’s disease.
How it Works: A&A provides a monthly cash allowance to the eligible veteran or surviving spouse, which they can use at their discretion, potentially including payment for in-home care from certain family members (spouses are typically excluded from being paid under this program).

Housebound Pension Benefit

Eligibility: Veterans or surviving spouses who qualify for a basic VA pension or survivor pension may be eligible for the Housebound Pension Benefit if they are permanently disabled and unable to leave their homes.
How it Works: The Housebound Pension Benefit offers a cash benefit that can be used to hire a friend or relative (excluding spouses) to provide in-home care.

Program of Comprehensive Assistance for Family Caregivers (PCAFC)

Eligibility: Veterans who sustained critical injuries or illnesses in the line of duty, are enrolled in VA healthcare, have a VA disability rating of at least 70% (individual or combined), and require personal care for at least six months due to ADL limitations or needing supervision may qualify for PCAFC.
How it Works: PCAFC offers monthly cash stipends to family caregivers, along with access to education, training, counseling, and up to 30 days of respite care annually.

Veteran Directed Care (VDC)

Eligibility: Veterans enrolled in the VA’s medical benefits package who require skilled services and ADL assistance may be eligible for VDC.
How it Works: VDC provides a monthly budget (not direct cash payment) to veterans to manage their care needs, including hiring a caregiver (adult child, grandchild, spouse, or other relative) or purchasing medical equipment. A designated service manages the budget and payments. This pilot program is available in 43 states, Washington DC, and Puerto Rico, with expansion underway in Delaware, Georgia, Kansas, Minnesota, Nebraska, North Dakota, and Rhode Island. Contact your local Area Agency on Aging for program availability in your area.

Steps to Become a Paid Family Caregiver Through the VA

Navigating VA programs can be complex and time-consuming. Organizations like the Elizabeth Dole Foundation and the American Legion (202-263-5759) provide assistance to military caregivers seeking VA benefits.

How to Get Compensated by Paid Family Leave

Understanding Paid Family Leave

Paid family leave laws build upon the federal Family Medical and Leave Act (FMLA), which offers unpaid, job-protected leave and continuation of health insurance benefits. State-level paid family leave programs provide partial or full wage replacement for workers who need to take time off work 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, DC, have active paid family leave laws, with Delaware, Maine, Maryland, and Minnesota set to implement programs in 2025 and 2026.

Some employers also offer their own paid family leave policies. Check with your HR department to determine if paid family leave is available as an employee benefit, regardless of your state’s laws.

Paid Family Leave Eligibility

Each state with paid family leave legislation has its own eligibility criteria, wage replacement levels, leave durations, and definitions of “family member.” Resources are available online to explore the specifics of your state’s family leave laws. (https://www.rubywell.com/paid-family-leave?utm_source=ncoa&utm_medium=referral&utm_campaign=get-paid)

How Paid Family Leave Works

Paid family leave operates differently across states.

In some states, eligibility is automatic for employees of participating employers. Participating employers often include those meeting 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 12 months prior to leave.

Other states offer voluntary state-run 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

To access paid family leave benefits, you’ll need to follow the application process specific to your state and/or employer. This typically involves:

Informing Your Employer: Notify your employer of your need for family leave.
Medical Certification: Obtain written certification from your loved one’s healthcare provider confirming their health condition and care requirements.
Employer Forms: Your employer will provide necessary forms for you to complete and return.
State Application (if applicable): Your state may have an online portal for paid family leave applications.
Advance Notice: If possible, provide at least 30 days’ notice to your employer before your leave begins. If not feasible, notify them as soon as possible.

How to Get Paid by a Long-Term Care Insurance Policy (LTCI)

Understanding Long-Term Care Insurance

Long-term care insurance (LTCI) is private insurance designed to cover long-term care costs, including nursing homes, assisted living, home health care, and various supportive services for individuals needing ADL assistance. LTCI offers greater flexibility compared to government programs like Medicaid, which have strict financial limitations.

LTCI Eligibility for Family Caregiver Payment

Unfortunately, LTCI coverage is not widespread; approximately only 3% of adults over 50 have policies.⁶ This is partly due to lack of awareness and the cost of premiums, which can range from a few thousand to $10,000 annually depending on age, health, and coverage levels.

Some LTCI policies may only cover care within facilities, not in-home care, and among those that cover in-home care, only some will pay family members (“informal caregivers”).

If your loved one has an LTCI policy that covers informal caregivers, you might be eligible for payment. The policy will likely have criteria, such as needing assistance with a specific number of ADLs or having cognitive impairment.

How LTCI Payment Works

LTCI payments can be structured in two ways:

Cash Payment: If the policy allows direct cash payments for informal care, the insurance company will send the monthly benefit amount directly to the policyholder, who can then use these funds to pay you.
Reimbursement: For reimbursement-based policies, you will need to submit invoices or documentation of the care provided. The insurance company will then reimburse the policyholder for approved costs.

Steps to Become a Paid Family Caregiver Through LTCI

Policy Verification: Confirm that your family member’s LTCI policy covers “informal caregivers” and that they are eligible for benefits based on their care needs. Initiate a claim with the insurance company.
Assessment/Care Plan: The insurance company may require a care assessment or plan detailing the required level of care.
Elimination Period: Be aware of the policy’s “elimination period,” similar to a deductible, during which you will not be paid.
Payment Claiming: Once the elimination period is met, you can start submitting claims for payment from the LTCI provider.

For more information, resources are available to help understand how to get paid as a family caregiver through long-term care insurance. (https://www.rubywell.com/blog/does-long-term-care-insurance-pay-family-caregivers?utm_source=ncoa&utm_medium=referral&utm_campaign=get-paid)

How to Get Paid by a Personal Care Agreement

Understanding Personal Care Agreements

A personal care agreement is a legal contract created within a family that designates a family member as a paid caregiver and specifies the compensation for their services. This document is particularly useful if the care recipient may eventually need Medicaid, as it serves as proof of asset spend-down on healthcare. Without proper documentation, payments made to family caregivers might be considered assets by Medicaid, potentially affecting eligibility.

Eligibility for Payment via Personal Care Agreements

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

How Personal Care Agreements Work

A personal care agreement outlines the caregiver’s duties, responsibilities, and compensation, based on local rates for professional care. Once in place, the care recipient can pay the caregiver according to the agreed-upon schedule.

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

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

Compensation Limitations and Future Outlook

As outlined above, current payment options for family caregivers primarily serve specific groups:

Those caring for low-income individuals eligible for government assistance.
Families with resources for LTCI or out-of-pocket caregiver payments.
Caregivers for certain veterans.
Caregivers in states with paid family leave, who can balance employment and caregiving (with limited leave durations).

Many family caregivers do not fit into these categories. However, there is growing momentum for change. Innovative companies like RubyWell are working to develop solutions and advocate for policy changes to broaden access to caregiver compensation. Collaboration with government bodies is essential to create accessible and comprehensive solutions for all family caregivers.

FAQ

How Much Do Family Members Get Paid for Caregiving?

Pay rates for family caregivers vary based on the payer, program, and state. Compensation should align with local professional caregiver rates.

To determine local rates:

Contact home care agencies in your area and inquire about their hourly rates for in-home caregivers.
Refer to resources like this article for average hourly and monthly caregiver salaries by state: (https://www.care.com/c/average-in-home-caregiver-salary-by-state/)

Are There Tax Benefits for Paid Family Caregivers?

Yes, several tax benefits are available:

Credit for Other Dependents: Potentially reduces taxes by up to $500.
Medical Expense Deduction: Allows deduction of unreimbursed medical expenses exceeding 7.5% of adjusted gross income, including home healthcare, adult day care, and home modifications.
Head of Household Filing Status: May be possible if you meet specific criteria, such as paying over half of household expenses.
Child and Dependent Care Credit: Reimburses up to $3,000 for care expenses while you work, even if the care recipient is not your dependent but lives with you and is unable to self-care.

For detailed information, consult resources on tax savings for family caregivers, such as: Money Saving Tips for Family Caregivers.

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 do not require specific training. However, government-funded programs and LTCI policies often mandate state-recognized training, registration, or certification for compensation eligibility.

Regardless of formal requirements, training can enhance caregiver confidence and skills. Inquire with your loved one’s healthcare provider about caregiver training opportunities. A recent Medicare rule now enables eligible providers to offer training to family caregivers. (https://www.actonraise.org/2024-pfs-caregiver-brief/)

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/