Getting paid for home health care is possible through several government programs, private insurance, and veteran benefits. The path depends on whether you’re a family member caring for a loved one or a professional caregiver, and whether the person receiving care qualifies for Medicare, Medicaid, veterans’ benefits, or has private long-term care insurance. Each program has different rules, different pay structures, and different paperwork.
Medicaid Programs That Pay Family Caregivers
Medicaid is the most common route for family members who want to be paid for caregiving. Most states run some version of a self-directed care program that lets the person receiving care hire their own caregiver, including relatives. These programs go by different names depending on the state. New York’s Consumer Directed Personal Assistance Program (CDPAP), for example, allows Medicaid members to choose and hire a friend or family member as their personal assistant. The caregiver handles everything from bathing and dressing to basic health monitoring, and gets paid through a fiscal intermediary that processes payroll.
There are some limits. In New York’s program, spouses cannot be hired as caregivers, and parents of recipients under 21 are excluded. Other states have similar restrictions, though the specifics vary. To find your state’s version of this program, search for your state’s Medicaid “self-directed services” or “consumer-directed” program, or contact your local Area Agency on Aging.
Beyond self-directed programs, federal law allows states to offer a wide range of home and community-based services through Medicaid waivers. These waiver programs can cover personal care, homemaker services, home health aides, adult day programs, and respite care. The menu of covered services is broad, and many states use these waivers to pay family caregivers directly. Eligibility typically requires that the person receiving care meets Medicaid’s income limits and has a documented need for assistance with daily activities.
How Medicare Covers Home Health
Medicare works differently from Medicaid when it comes to home health. It covers skilled nursing, physical therapy, occupational therapy, and speech therapy delivered at home, but it pays licensed agencies and professionals rather than family members. You cannot get paid as a family caregiver through Medicare.
That said, understanding Medicare’s home health benefit matters because it can offset the overall cost of care and reduce what families pay out of pocket. To qualify, the person receiving care must be considered “homebound,” meaning leaving home requires considerable effort due to illness or injury, like needing a wheelchair, walker, or another person’s help. A doctor must also certify that the patient needs part-time or intermittent skilled care and sign a detailed plan of care that includes diagnoses, medications, functional limitations, and specific treatment orders.
“Part-time or intermittent” generally means up to 8 hours of combined skilled nursing and aide services per day, with a maximum of 28 hours per week. In some cases, that can stretch to 35 hours per week for a short period if the doctor determines it’s necessary. Home health aide services, like help with bathing, grooming, and walking, are only covered when the patient is also receiving skilled nursing or therapy. Medicare does not cover 24-hour care, meals delivered to the home, or homemaker services like cleaning and laundry when those are the only services needed.
Veterans’ Aid and Attendance Benefits
Veterans and surviving spouses who already receive a VA pension may qualify for an additional monthly payment called Aid and Attendance. This benefit provides extra cash specifically for people who need help with daily activities like bathing, feeding, and dressing, or who are largely confined to bed due to illness. Veterans with severely limited eyesight (5/200 or less in both eyes) also qualify.
The Aid and Attendance payment goes directly to the veteran or surviving spouse, who can then use it to pay a family caregiver or professional aide. There’s no requirement that the money go to a licensed agency. A separate benefit, the Housebound allowance, is available for veterans who spend most of their time at home due to a permanent disability. You can receive one or the other, but not both simultaneously.
Long-Term Care Insurance Payouts
If the person you’re caring for has a private long-term care insurance policy, it may cover home care services and, depending on the policy, allow payments to family caregivers. Most policies begin paying benefits when the policyholder needs help with two or more of six basic activities of daily living: bathing, dressing, eating, toileting, transferring (moving from bed to chair), and continence. Policies also typically trigger benefits for cognitive impairment, even if the person can still physically manage daily tasks.
The details vary enormously between policies. Some pay only licensed home health agencies. Others reimburse for any caregiver, including family. Some pay a daily or monthly benefit amount regardless of actual costs, while others reimburse documented expenses up to a cap. Check the policy language carefully, or call the insurance company directly and ask whether family members qualify as covered providers. Many policies also have a waiting period (called an “elimination period”) of 30 to 90 days before benefits kick in.
PACE for Elderly Adults
The Program of All-Inclusive Care for the Elderly (PACE) is a specialized option for frail adults aged 55 and older who qualify for nursing home-level care but want to remain at home. PACE programs bundle medical care, social services, and home support into a single package. Most participants are dually eligible for both Medicare and Medicaid, which together cover the full cost.
PACE programs coordinate everything from doctor visits and prescription drugs to personal care at home and adult day services. While PACE typically employs its own care teams rather than paying family members directly, it can dramatically reduce the caregiving burden on families by covering services that would otherwise fall to relatives. PACE is not available everywhere, so check whether a program operates in your area through Medicare’s plan finder tool.
Tax Credits That Offset Caregiving Costs
Even when you can’t get paid directly, tax benefits can help recover some caregiving expenses. The Child and Dependent Care Credit applies to care provided for a dependent of any age who can’t care for themselves, not just children. If you’re paying someone to care for a qualifying dependent so that you (and your spouse, if married) can work, you can claim a credit on up to $3,000 in expenses for one dependent or $6,000 for two or more.
The credit ranges from 20% to 35% of those expenses depending on your income. Households earning $15,000 or less get the full 35%, while those earning above $43,000 get 20%. That translates to a maximum credit of $1,050 for one dependent or $2,100 for two at the 35% rate. If your employer offers a dependent care flexible spending account, you can exclude up to $5,000 in pretax dollars ($2,500 if married filing separately), though this reduces the amount you can claim for the credit.
Steps to Start Getting Paid
The first step is figuring out which programs the care recipient qualifies for. Start with Medicaid if income is limited, since self-directed care programs offer the most straightforward path to paying family caregivers. If the person is a veteran, contact the VA’s pension management center about Aid and Attendance. For Medicare, the person’s doctor needs to certify homebound status and order skilled services.
Expect paperwork. Medicaid programs require an assessment of the care recipient’s needs, usually conducted by a nurse or social worker, followed by a care plan that specifies how many hours of care are authorized per week. Medicare requires a physician-signed certification and plan of care that details diagnoses, treatments, and goals. These documents need to be renewed periodically, typically every 60 days for Medicare.
Pay rates for family caregivers through Medicaid programs vary by state but generally align with what home health and personal care aides earn in your area. Nationally, the median wage for these workers is about $16.80 per hour, based on a median annual salary of $34,900. Some states pay more, particularly in high-cost areas, while rural regions may pay less. Hours are typically capped based on the care recipient’s assessed needs, so full-time pay isn’t guaranteed.
If you’re caring for someone right now without pay and want to change that, contact your state Medicaid office or local Area Agency on Aging. These offices can walk you through eligibility screening and connect you with the specific programs available where you live. Many families don’t realize these programs exist until years into caregiving, so the sooner you inquire, the sooner payments can begin.