Memory Digest

Getting Paid as a Family Caregiver

In the U.S., some family caregivers can be paid through Medicaid self-directed programs, veterans' benefits, long-term care insurance or a family care agreement; here is how each option works and how to find out what you qualify for.

Last reviewed: October 2026

Caring for a parent or spouse with dementia can become a full-time job, and many caregivers cut back their hours or leave work to do it. In some situations, family caregivers can be paid. The options depend heavily on the person's income and assets, veteran status, insurance and state. This is general information, not financial or legal advice.

1. Medicaid self-directed care

This is the most common way family caregivers get paid. Every state's Medicaid program offers some home and community-based services, and most states let people who qualify direct their own care, which means they can hire the helper they choose, often including a family member. Programs go by many names, such as "consumer-directed," "self-directed" or "participant-directed" services, or Cash and Counseling.

Key points:

• The person receiving care must qualify for Medicaid, which has income and asset limits, and must need help with daily activities, typically at a nursing-home level of care.
• Rules about who can be paid vary by state. Many states allow adult children and other relatives; fewer allow spouses. Legal guardians may be excluded in some programs.
• Pay is usually an hourly rate, set by the state, for an approved number of hours.
• Waiting lists are common for some waiver programs, so apply early.

To learn your state's rules, contact your state Medicaid office or your local Area Agency on Aging through the Eldercare Locator (1-800-677-1116). See also Medicare, Medicaid and Dementia Care. Medicare generally does not pay family caregivers.

2. Veterans' programs

If the person with dementia is a veteran, several VA programs may help (see Resources for Veterans):

• Veteran-Directed Care: for veterans who need help with daily activities, this program gives a flexible budget to hire their own caregivers, which can include family members and friends. It's available through many VA medical centers working with local aging agencies.
• Program of Comprehensive Assistance for Family Caregivers (PCAFC): provides a monthly stipend, training, health insurance in some cases and respite to a primary family caregiver of an eligible veteran with a serious service-connected disability. Eligibility rules are specific, so ask the VA Caregiver Support team at your local VA.
• Aid and Attendance or Housebound benefits: an extra monthly amount added to a VA pension for veterans or surviving spouses who need help with daily activities. The money can be used to pay for care, including from family.

The VA Caregiver Support Line is 1-855-260-3274.

3. Long-term care insurance

Some long-term care insurance policies pay for home care, and a few allow payments to family members or pay a set cash benefit the policyholder can use as they wish. Read the policy carefully or call the insurer and ask directly: "Does this policy pay a family member or friend to provide care?"

4. A personal care agreement with the family

The person receiving care (or their agent under a power of attorney) can pay a family caregiver from their own money. To protect everyone:

• Put it in writing in a personal care agreement (also called a caregiver agreement) that lists the duties, hours, pay rate and how it will be recorded.
• Pay a fair market rate for your area, not a lump sum for future care.
• Keep time logs.
• Get advice from an elder law attorney. A properly written agreement can matter a lot if the person later applies for Medicaid, because Medicaid looks back at gifts and transfers of money over the previous five years in most states. Informal payments can be treated as gifts and delay eligibility.
• Taxes: payments are generally taxable income for the caregiver, and the person paying may have household employer responsibilities. A tax professional can help.

Other family members can also contribute to a caregiver's pay, which is worth discussing openly to prevent resentment later.

5. Other help that eases the cost

Even if you can't be paid directly, these can reduce the financial strain:

• The National Family Caregiver Support Program, run through local Area Agencies on Aging, offers counseling, training, respite care and sometimes supplemental services (see Respite Care).
• State caregiver programs and tax credits: some states offer stipends, respite grants or caregiver tax credits.
• Paid family leave: some states offer partial wage replacement while you care for a family member, and the federal Family and Medical Leave Act may protect your job, unpaid.
• Federal tax breaks: if you support a parent financially, you may be able to claim them as a dependent or deduct medical costs you pay.

Questions to ask

1. Does my loved one qualify for Medicaid now, or could they after planning?
2. Does my state's self-directed program allow paying a relative, and does it allow spouses?
3. Is there a waiting list?
4. Is the person a veteran or the surviving spouse of one?
5. Is there a long-term care insurance policy?

The bottom line

You may be able to get paid for the care you're already giving. Start with your local Area Agency on Aging and, for veterans, the VA Caregiver Support Line. For private arrangements, a written care agreement and advice from an elder law attorney protect both you and your loved one. See Financial Planning and Paying for Care for the bigger picture on paying for care.

Sources

1. AARP: How to Get Paid for Taking Care of a Family Member
2. U.S. Department of Veterans Affairs: Veteran-Directed Care
3. VA Caregiver Support Program: Program of Comprehensive Assistance for Family Caregivers
4. Administration for Community Living: National Family Caregiver Support Program

Not medical advice. This article is general information, not a diagnosis or treatment plan for any individual. Talk with a doctor about your situation.

Related articles

• Financial Planning and Paying for Care
• Medicare, Medicaid and Dementia Care
• Resources for Veterans
• Respite Care
• Caregiver Stress and Burnout