How to Get Paid by Medicaid for Caring for a Loved One

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Adult children, spouses, siblings and friends who help care for older loved ones may be eligible to receive payment through Medicaid. In many cases, Medicaid prefers to cover care from a relative or friend so the person can remain at home rather than move into a long-term care facility.

According to a CareScout cost-of-care survey, the national median cost of a private nursing home room in 2025 was about $10,798 per month. A semi-private room cost $9,581 per month.

To help people stay in their homes longer, even when they need assistance, nearly every state and the District of Columbia offers some Medicaid program that allows a participant to choose a family caregiver who can be paid with Medicaid funds. Many of these programs are participant-driven, meaning the individual can select the caregiver and Medicaid will cover part or all of the cost.

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“The vast majority of older adults want to stay in their homes as they age, and allowing them to pay a friend or family member to help with their daily needs can make that possible,” said Susan Reinhard, former senior vice president of AARP’s Public Policy Institute. “Paying family caregivers is a solution that saves states money and meets the growing need for long-term care.”

The strongest chance of being paid as a family caregiver usually comes when the person receiving care qualifies for Medicaid or is a U.S. military veteran, though other paths exist. Recent federal and state budget cuts may reduce how much Medicaid money caregivers can receive, but these options are still available for now. Those cuts are set to unfold over 10 years beginning in 2026. See the state-by-state breakdown for details.

In Need of Some Quick Money?

If you are worried about how to care for a loved one, the last thing you need is financial pressure. Being paid to care for a family member can help, and if you need additional income, there are also other ways to earn extra cash.

How to Become a Paid Caregiver for a Family Member

Rules differ by state and by program. In most cases, the person receiving care must meet a certain level of need, and the caregiver must be able to provide the required help. If medical services are needed that the loved one is not trained to perform, that person cannot be named the caregiver.

How much family caregivers are paid depends on the state Medicaid program, the level of care needed and the average wage for a home health aide in that state. The programs that allow family caregivers to be paid also use different names and come with different rules and benefits in each state:

• Home and Community Based Services Waivers are available in most states. However, many states limit how many waivers they issue, so waiting lists may exist. This waiver lets the Medicaid participant hire a friend or relative as a personal care assistant. It is also known as the 1915(c) waiver.
• The Self-Directed Personal Assistance Services State Plan Option lets a Medicaid participant hire, train and pay the personal care assistant of their choice. Based on the Medicaid budget provided, the participant decides what the assistant will be paid. One unusual aspect of this option is that the participant may have to handle employment taxes for the assistant, with help from an intermediary.
• Under the Caretaker Child Exemption, Medicaid does not pay an adult child a wage to care for a parent, but it may allow the parent’s home to be transferred to that adult child as payment. This can apply when an older Medicaid participant is entering a nursing home but would not otherwise qualify because they own their home. For the adult child to receive the house and for the parent to qualify for Medicaid, the child must have lived with the parent for at least two years immediately before the parent entered the nursing home. If the transfer is not handled properly, Medicaid’s “look back rule” could make the parent ineligible.

Learn More About Medicaid

Medicaid eligibility varies widely across the country, including for these programs and waivers. State limits differ, so it is important to check the rules where you live. If a senior is already enrolled in Medicaid, the next step is to contact the state Medicaid office.

The American Council on Aging strongly recommends working with a Medicaid planner to help with caregiver applications and other benefits.