Every U.S. state has at least one program that can pay family members for caregiving, but the type of program, pay rate, and eligibility rules vary widely. The most common path is through Medicaid, which offers self-directed care options in all 50 states and Washington, D.C. Veterans’ benefits, state paid family leave programs, and a handful of state-funded grants round out the options.
There is no single national list because each state designs its own programs with different rules about who qualifies, how much caregivers earn, and whether spouses or parents of minor children can be paid. Here’s how the major programs work and what you need to know to find the right one.
Medicaid Self-Directed Care: Available Nationwide
Medicaid’s self-directed services programs are the most widely available way for family caregivers to get paid. Under these programs, the person receiving care (or their representative) gets decision-making authority over their services. They can recruit, hire, train, and supervise whoever provides their care, including a family member. The federal government calls this “employer authority,” and it effectively turns your loved one into your employer.
States can offer self-direction through four different program structures: Home and Community-Based Services waivers, a state plan option for home and community-based services, the Community First Choice program, and a dedicated self-directed personal assistance option. Most states use more than one of these, and each program within a state can have its own rules about which family members are eligible to be paid providers.
Almost two-thirds of states allow legally responsible relatives (spouses and parents of minor children) to be paid caregivers through at least one of their programs. However, policies often differ within a single state depending on which waiver program you’re looking at and which specific service is being provided. A state might allow a spouse to be paid under one waiver but not another, or permit a parent to provide respite care but not daily personal assistance. Your state Medicaid office or local Area Agency on Aging can clarify which programs apply to your situation.
Who Qualifies for Medicaid-Funded Caregiver Pay
The person receiving care must qualify for Medicaid, and most caregiver payment programs fall under long-term care eligibility rules. In 2025, the income limit for long-term care Medicaid is typically $2,901 per month for an individual, which is 300% of the federal Supplemental Security Income level. Most states also cap countable assets at $2,000 per person, though home equity up to $730,000 (and in some states up to $1,097,000) is usually excluded.
For people receiving SSI, the income threshold is lower at $967 per month with a $2,000 asset limit. States with Medicaid buy-in programs for working people with disabilities tend to be more generous, with a median income limit around $3,261 per month and median asset limits near $10,000. Children with disabilities may qualify under the Family Opportunity Act, where the median state income limit is roughly $3,452 per month.
Once the care recipient qualifies and enrolls in a self-directed program, a payroll processing agency (called a Financial Management Service) handles the paperwork. This agency manages tax withholdings, workers’ compensation, and payment distribution so the family caregiver is treated as a legitimate employee. Pay rates vary by state and program but are generally tied to what the state pays home care aides.
The VA’s Program for Family Caregivers of Veterans
If your loved one is a veteran, the Program of Comprehensive Assistance for Family Caregivers (PCAFC) offers a monthly stipend that is separate from Medicaid entirely. To qualify, the veteran must have a VA disability rating of 70% or higher, be enrolled in VA health care, and need at least six continuous months of in-person personal care services. Those services include help with everyday needs like feeding, bathing, and dressing, as well as broader support for health, safety, and daily living.
The stipend amount is calculated based on the level of care needed, with higher payments for veterans who require more intensive assistance. The program also provides health insurance for the caregiver (through CHAMPVA if they don’t have other coverage), mental health counseling, and respite care so caregivers can take breaks. You apply jointly with the veteran through VA.gov or your local VA medical center.
Paid Family Leave: 13 States Plus D.C.
Paid family and medical leave programs work differently from Medicaid. Instead of paying you as a care worker, they replace a portion of your wages when you take time off from your job to care for a seriously ill family member. Thirteen states and Washington, D.C., have enacted these programs: California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Washington.
Most of these programs are funded through payroll taxes paid by employees, and some include employer contributions as well. New York takes a different approach by requiring employers to purchase paid leave coverage through private insurers. The wage replacement rate, maximum benefit amount, and duration of leave differ by state, but most programs cover several weeks of partial pay. These programs don’t require the person you’re caring for to be on Medicaid or meet any income threshold, making them accessible to a broader range of families.
The key limitation is that paid family leave is temporary. It’s designed for acute situations like a parent recovering from surgery or a spouse going through cancer treatment, not for years of ongoing caregiving. Once your leave period ends, the payments stop.
State-Funded Programs Outside Medicaid
A smaller number of states offer caregiver support through general funds that don’t require Medicaid enrollment. Colorado’s Family Support Services Program, for example, provides financial support to families with children who have developmental disabilities or delays. It covers costs beyond what families typically face, including respite care and sitter services, special equipment, medical and dental expenses, and additional insurance costs. The child must be living at home or the family must be working to bring them home from an out-of-home placement.
Programs like these are less common and more narrowly targeted than Medicaid options, but they can fill gaps for families who earn too much to qualify for Medicaid yet still face significant caregiving expenses. Contact your state’s department of health or aging services to ask about non-Medicaid caregiver assistance programs specific to your area.
Tax Rules That Can Increase Your Take-Home Pay
If you receive Medicaid waiver payments for caregiving, a significant portion (or all) of that income may be tax-free. Under IRS Notice 2014-7, Medicaid waiver payments for home and community-based services are treated as “difficulty of care” payments, which can be excluded from your gross income on your federal tax return.
The critical requirement is that you must live in the same home as the person you’re caring for. The IRS defines “the provider’s home” as the place where you reside and regularly carry out your private life, like sharing meals and holidays with family. If you live separately from the care recipient and travel to their home to provide care, the exclusion does not apply. Multiple caregivers living in the same home as the care recipient can each exclude their payments.
You can exclude the full amount you receive under the waiver program, even if the care recipient is required to pay the program administrator a share of the cost. This exclusion applies only to payments for the care of the individual, not to any other income you might earn. Because this can reduce your taxable income to zero in some cases, it’s worth understanding before you file.
How to Find Your State’s Specific Programs
Start with your state’s Medicaid office or its equivalent (sometimes called the Department of Health Care Policy and Financing, the Department of Social Services, or the Department of Human Services). Ask specifically about self-directed home and community-based services waivers and whether family members, including spouses and parents, can be paid providers. Many states maintain waitlists for waiver programs, so applying early matters.
Your local Area Agency on Aging is another practical resource, especially for navigating which of multiple programs fits your situation best. For veterans, the VA’s Caregiver Support Line (1-855-260-3274) can walk you through eligibility and the application process. If you live in one of the 13 paid family leave states, your state’s labor or employment department handles those claims separately from any Medicaid program.