How Do You Become a Paid Caregiver for a Family Member?

To become a paid caregiver for a family member, you generally need to enroll your relative in a program that pays family members to provide care at home, sign a written care agreement, and complete an application that includes medical documentation, a background check, and an in-home assessment. Three programs do most of this work in the United States: a Medicaid Home and Community-Based Services (HCBS) waiver, the VA’s Program of Comprehensive Assistance for Family Caregivers, and state-funded caregiver programs for families who don’t qualify for Medicaid.

Does Your Family Member Qualify for Care

The first gate is clinical. A physician, nurse practitioner, or licensed social worker has to certify that your relative needs a nursing-home level of care, meaning regular hands-on help with bathing, dressing, toileting, eating, or moving around safely. Without that certification, none of the paid caregiver programs will approve you.

The second gate, for Medicaid-based programs, is financial. Most states set the income ceiling for aged, blind, or disabled applicants at 300 percent of the Supplemental Security Income Federal Benefit Rate. In 2026, the SSI Federal Benefit Rate is $994 per month, putting the income limit at $2,982 per month in most states.¹ The asset limit is $2,000 for a single person and $3,000 for a couple, though a primary home and one vehicle are typically excluded.² This population is evaluated under SSI-based rules, not the MAGI methodology that governs most other Medicaid groups.³

If your relative is a veteran, the financial rules don’t apply. What matters instead is the disability rating. The VA caregiver program requires a combined VA disability rating of 70 percent or higher.⁴

Do You Qualify as the Caregiver

You generally must be at least 18 and have a legal or biological relationship with the person you’re caring for. Most programs expect you to live in the same home or close enough to provide consistent daily support. A criminal background check, usually including fingerprinting, is standard, and some programs require a short training course covering safety basics, first aid, and medication management before your first paycheck.

One catch worth checking early: certain programs exclude spouses and legal guardians from being paid, on the theory that those relationships already carry a legal duty of support. The rules vary by state and by program, so confirm this before you build a plan around a paycheck that might not be available to you.

The Three Programs That Pay Family Caregivers

Medicaid HCBS Waivers

The Medicaid Home and Community-Based Services waiver, authorized under Section 1915(c) of the Social Security Act, is the largest source of funding for paid family caregiving in the country. It lets states deliver care in a person’s home instead of a nursing facility and to waive the standard Medicaid income and resource rules for people who would otherwise only qualify for institutional care.⁵

Many states run these waivers on a self-directed model. Your relative controls a budget and picks who provides the care, and federal law specifically allows states to let participants hire “legally liable relatives” as paid providers.⁶ Hourly rates typically fall between about $10 and $27, set at the state level.

VA Program of Comprehensive Assistance for Family Caregivers

PCAFC pays a monthly stipend tied to the federal General Schedule pay rate for a GS-4, Step 1 position in the veteran’s geographic area, divided by 12. A Level One caregiver receives 62.5 percent of that monthly rate. A Level Two caregiver, caring for a veteran who cannot live independently, receives 100 percent.⁷ Because GS locality pay varies across the country, the dollar figure depends on where the veteran lives. Primary family caregivers may also receive VA health insurance, mental health counseling, and respite care benefits.

State-Funded Caregiver Programs

If your relative earns too much for Medicaid but still needs help, state general revenues and federal block grants fund a second tier of programs in many states. Payments are usually smaller — an hourly rate or a monthly grant — and are designed to keep families from spending down their savings just to reach Medicaid eligibility. Availability differs widely, so contact your local Area Agency on Aging to find out what your state offers.

Sign a Personal Care Agreement Before Any Money Changes Hands

A personal care agreement is a written contract between you and the family member receiving care. It spells out the services, the hours per week, and the hourly rate. Sign it before you start providing paid care.

The reason is Medicaid’s look-back period, typically 60 months, during which the agency reviews financial transactions for signs that the applicant gave assets away to qualify. Without a formal contract, payments to a family caregiver can be treated as gifts rather than compensation, triggering a penalty period that delays Medicaid eligibility. A contract signed before payments begin, at a rate that reflects what professional caregivers charge in your area, establishes that the money was exchanged for legitimate services. An elder law attorney can help draft it.

Applying: Documents, Assessment, and Timeline

Gather the paperwork before you start. Most programs ask for the same core items:

Medical records documenting the diagnoses and the physical or cognitive limitations that require daily assistance, plus a physician’s certification of nursing-home level of care.
Financial records for Medicaid-based programs: bank statements, income records, and proof of assets showing your relative falls below the limits.
Identity documents for both of you, including Social Security cards and photo IDs, and often a birth certificate or other proof of your relationship.
The program’s own forms. VA applicants use Form 10-10CG, which you can submit online, by mail to the VA Evidence Intake Center, or in person at a VA medical center. Medicaid waiver applicants use state-specific forms from the local department of health and human services.⁹

Describe your relative’s daily challenges in detail. The forms ask about specific tasks the person cannot perform on their own, how often they need help, and how many hours of care they require. Vague answers can produce a lower authorized care level than the person actually needs.

You’ll submit through a state portal, by mail, or in person at your local Department of Social Services. VA applicants can submit at va.gov, by mail, or through the caregiver support team at a VA medical center.8Department of Veterans Affairs. VA Form 10-10CG – Application for the Program of Comprehensive Assistance for Family Caregivers Then a nurse or social worker visits the home to observe the environment and verify your relative’s needs. You’ll also complete a criminal background check with fingerprinting, and often a training course covering fall prevention, infection control, first aid, and medication management. Background check and fingerprinting fees generally run $40 to $100 depending on the state. From submission to authorization, expect 30 to 90 days.

What You’ll Owe in Taxes

Two federal rules can reduce or eliminate the tax on your caregiver income. Under IRS Notice 2014-7, qualified Medicaid waiver payments are treated as difficulty-of-care payments you can exclude from gross income, provided you care for the recipient under a Medicaid waiver program and the person lives in your home.¹⁰ The IRS treats the care recipient as a qualified foster individual placed in your home, which triggers the exclusion under Section 131 of the Internal Revenue Code.¹¹ Whether you’re related to the person doesn’t matter for this exclusion, but sharing a home does. Care provided outside your home doesn’t qualify.

Social Security and Medicare taxes are a separate question. When a family member hires you as a household employee and pays $3,000 or more in cash wages in 2026, FICA generally applies. But the IRS exempts wages paid by certain relatives entirely. You owe no FICA on caregiving wages paid by your spouse, by your parent (unless specific exceptions apply), or by your child if you’re under 21.¹² Those exemptions apply regardless of how much you earn. If no exempt relationship applies and you earn $3,000 or more in 2026, the household employer or the Medicaid fiscal intermediary handles withholding.¹³ Combining the Notice 2014-7 exclusion with the FICA exemptions can eliminate most of the tax on your caregiver pay, so it’s worth running the numbers with a tax professional.

After You’re Approved

Medicaid programs require Electronic Visit Verification (EVV) under the 21st Century Cures Act, meaning you clock in and out through a phone app, a landline system, or another electronic method that records the date, time, location, and service.¹⁴ Keep your own daily care log alongside EVV: date, start and end times, tasks performed, how your relative responded, and any changes in condition. Those notes protect you in an audit and help the care team adjust the plan when needs change.

Submitting false hours or misrepresenting medical needs carries real consequences. Under the federal False Claims Act, a knowingly fraudulent Medicaid claim can trigger fines of up to three times the program’s loss plus over $11,000 per false claim, and the Office of Inspector General can impose civil monetary penalties of $10,000 to $50,000 per violation, on top of possible criminal charges.¹⁵

Two Related Benefits Worth Knowing About

If you’re working a regular job on top of caregiving, the Family and Medical Leave Act can protect it. Eligible employees may take up to 12 weeks of unpaid, job-protected leave in a 12-month period to care for a spouse, child, or parent with a serious health condition, and up to 26 weeks for a covered servicemember.¹⁶¹⁷ Federal FMLA leave is unpaid, though some states run paid family leave programs, and state programs often cover a wider set of relatives than the federal law’s spouse-child-parent limit. FMLA doesn’t cover care for siblings, grandparents, aunts, uncles, or in-laws unless your state extends it.

Once you’re enrolled as a paid caregiver, respite care lets a substitute step in so you can take a break. Many Medicaid HCBS waivers include respite, with caps that vary from around 30 days per year in some states to several hundred hours or a dollar limit in others. PCAFC also provides respite for enrolled primary caregivers. Your program coordinator can tell you what’s available under the specific waiver or program you enrolled in.

1
Social Security Administration. SSI Federal Payment Amounts for 2026
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Social Security Administration. 2026 Cost-of-Living Adjustment Fact Sheet
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Medicaid.gov. Eligibility Policy
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Veterans Affairs. Program of Comprehensive Assistance for Family Caregivers
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Medicaid.gov. Home and Community-Based Services 1915(c)
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Office of the Law Revision Counsel. 42 USC 1396n – Compliance With State Plan and Payment Provisions
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Department of Veterans Affairs. Monthly Caregiver Stipend Factsheet
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Veterans Affairs. Apply for the Program of Comprehensive Assistance for Family Caregivers