Most states offer programs that let you get paid to care for a family member at home, primarily through Medicaid. You don’t typically need a formal home health aide license to do it. The most common path is through a Medicaid self-directed care program, where your family member (the person receiving care) is given authority to hire, train, and manage their own caregivers, including relatives. The exact program name, pay rate, and requirements vary by state, but the basic structure is available nationwide.
Medicaid Self-Directed Care Programs
The federal government allows every state to offer self-directed services through Medicaid, meaning your family member can choose who provides their care and how it’s delivered. Under these programs, your loved one (or their representative) becomes the employer. They recruit, hire, and supervise their own aides, and that aide can be you.
States set up these programs through several federal options, including Home and Community-Based Services waivers, Community First Choice, and Self-Directed Personal Assistance Services. The names differ wildly from state to state. New York calls theirs the Consumer Directed Personal Assistance Program (CDPAP). Other states built on a model called “Cash and Counseling,” which originated as a demonstration project in the late 1990s and has since spread broadly. Your state Medicaid office or Area Agency on Aging can tell you the local program name and how to apply.
Who Qualifies for These Programs
Two people need to qualify: your family member (the care recipient) and, indirectly, you as the caregiver.
Your family member must be enrolled in Medicaid and need help with activities of daily living like bathing, dressing, eating, toileting, or moving around. Most states require a clinical assessment to confirm the person needs a certain level of hands-on assistance, often called a “nursing facility level of care,” meaning their needs are significant enough that they’d otherwise require a nursing home. People whose eligibility is based on age (65 and older), disability, or blindness generally go through income screening based on Supplemental Security Income standards rather than the broader tax-based rules used for other Medicaid groups.
If your family member’s income is slightly too high, some states have a “medically needy” option that allows people with significant health costs to qualify by “spending down” the difference between their income and the state’s threshold. One important rule: Medicaid looks back five years for assets that were transferred below fair market value, so gifting property or money before applying can cause problems.
As for you, most self-directed programs require caregivers to pass a background check and complete basic orientation or training provided by the program. A formal home health aide certification is generally not required. Colorado, for example, explicitly excludes consumer-directed attendant programs from the regulations that govern licensed home care agencies. The whole point of self-direction is that the care recipient controls hiring, so the barriers to entry are kept low.
Structured Family Caregiving Programs
A few states take a more structured approach. Georgia, South Dakota, and Missouri offer what’s called Structured Family Caregiving, where a home health agency pays you, trains you, and oversees your work as a caregiver for your family member. In this model, you’re employed by the agency rather than directly by your loved one. The agency checks that you’re qualified, makes sure care tasks are completed properly, and adjusts the plan as your family member’s needs change.
Missouri limits the program to Medicaid beneficiaries with Alzheimer’s or a related diagnosis, while Georgia and South Dakota open it to both older adults and people with disabilities. All three states run these services through Medicaid Home and Community-Based Services waivers. If your state offers this model, it can be a good fit for caregivers who want more professional support and structure rather than managing everything independently.
Options for Veterans
If your family member is a veteran enrolled in VA health care, the Veteran Directed Care program offers a similar self-directed model. Eligible veterans receive a flexible budget and help developing a spending plan, then hire their own workers, which can include family members or neighbors. All enrolled veterans who are eligible for community care and meet the clinical criteria can participate, though availability varies by location. To get started, your family member should speak with their VA social worker to find out if the program operates in their area.
Medicare Does Not Cover This
One common point of confusion: Medicare and Medicaid are different programs, and Medicare does not pay family members to provide care. Medicare’s home health benefit requires that a Medicare-certified home health agency deliver the services, ordered by a doctor. It also doesn’t cover custodial or personal care (help with bathing, dressing, toileting) when that’s the only type of care needed. If your family member is on Medicare but not Medicaid, paid family caregiving through a government program isn’t an option through that channel.
What the Pay Looks Like
Compensation varies significantly by state and region. New York’s CDPAP program, one of the largest in the country, publishes its 2025 reimbursement rates publicly. In New York City, the basic rate is $26.89 per hour. In the suburbs of Nassau, Suffolk, and Westchester counties, it drops to $25.72. The rest of the state pays $24.01 per hour at the basic level, with slightly higher rates for cases classified as “hard to serve.” Live-in caregivers in New York City receive a daily rate of $350.29.
These are among the highest rates in the country, driven by New York’s cost of living and minimum wage laws. In many other states, expect rates closer to $12 to $18 per hour, depending on local wage standards and how the state structures its Medicaid reimbursement. The number of hours you’re approved for depends on your family member’s assessed care needs, not on what you’d prefer to work.
Tax Rules for Paid Family Caregivers
The IRS considers caregivers to be employees in most cases, because they work in someone’s home and the care recipient has the right to direct what needs to be done. That means the income is reported on a W-2. However, there are important exemptions from employment taxes when the caregiver has a specific family relationship to the employer. If you’re caring for your spouse, your parent (with some exceptions), or you’re under 21 and caring for your own parent, employment taxes like Social Security and Medicare withholding may not apply, even though the income itself still gets reported.
If you receive a 1099-MISC from a state agency or insurance company and you’re not in the business of providing caregiving services as a profession, you generally don’t owe self-employment tax on that income. You do still report it as other income on your tax return. The distinction matters: someone who runs an adult day care as a business owes self-employment tax, but a family member who stepped into a caregiving role for one person typically does not. A tax professional familiar with caregiver income can help you file correctly.
Steps to Get Started
- Confirm your family member’s Medicaid enrollment. If they aren’t enrolled, they’ll need to apply through your state’s Medicaid office. Eligibility depends on income, assets, and medical need.
- Request a needs assessment. Your state will send a nurse or social worker to evaluate your family member’s ability to perform daily activities. This assessment determines both eligibility and the number of care hours approved.
- Ask about self-directed options by name. Contact your state Medicaid office or Area Agency on Aging and ask specifically about self-directed personal care, consumer-directed programs, or Home and Community-Based Services waivers. These programs sometimes aren’t offered proactively.
- Complete required training and background checks. Most programs require a basic orientation, CPR or first aid training, and a criminal background check. Some states handle this through a fiscal intermediary, which is an organization that manages payroll, taxes, and compliance on your behalf.
- Enroll with a fiscal intermediary. In self-directed programs, a fiscal intermediary processes your paychecks, handles tax withholding, and ensures the program’s paperwork stays current. Your state program will connect you with one.
The whole process, from Medicaid application to receiving your first paycheck, can take several weeks to a few months depending on your state’s processing times and whether your family member is already enrolled in Medicaid. States with established programs like New York’s CDPAP tend to move faster because the infrastructure is already in place. In states where self-directed care is newer or less commonly used, expect more back-and-forth with caseworkers to get everything set up.