Medicaid waiver programs: how to get paid as a family caregiver

For many families, the question is not whether they will provide care for an aging or disabled family member. It is whether they can afford to do so. Medicaid waiver programs are the single most widely available mechanism in the United States for compensating family members who take on that caregiving role.

This article explains exactly how these programs work, who qualifies, and what steps to take to get approved as a paid family caregiver.

Quick answer: what is a Medicaid waiver for family caregivers?

A Medicaid waiver is a program that allows states to use Medicaid funding for home and community-based services instead of institutional care. Many of these waivers include consumer-directed care models that allow Medicaid-eligible individuals to choose and hire their own caregivers, including family members, who are then paid from Medicaid funds. The care recipient must be Medicaid-eligible, and the family caregiver must meet any state-specific training or background check requirements.

How Medicaid waivers work

The standard Medicaid program does not typically allow Medicaid funds to pay family members for caregiving. Medicaid Home and Community-Based Services (HCBS) waivers are exceptions that states apply for from the federal government, giving them flexibility to design programs that fit their populations.

Under most consumer-directed waiver models, the care recipient (or their representative) becomes the employer of record. They select their own caregiver, which can be a family member (with some exceptions), and the caregiver is paid through a fiscal intermediary using Medicaid funds.

Who qualifies for Medicaid waiver family caregiving?

The care recipient must:

• Be enrolled in Medicaid or meet Medicaid income and asset eligibility
• Have an assessed need for personal care or home health assistance (determined by a care coordinator or nurse assessor)
• Require a level of care that would otherwise qualify for nursing facility placement
• Choose to participate in a consumer-directed or self-directed care program

The family caregiver typically must:

• Be 18 years or older
• Pass a criminal background check
• Complete any required training as specified by the state program
• Not be the legal spouse of the care recipient in most states
• Be willing to track and report care hours accurately

Consumer-directed care programs by state: examples

State	Program name	Family caregiver allowed?	Approx. hourly pay
New York	CDPAP (Consumer Directed Personal Assistance Program)	Yes (non-spouse)	$15-$21/hour
California	IHSS (In-Home Supportive Services)	Yes (non-spouse)	$16-$18/hour
Texas	CFC/STAR+PLUS waiver	Yes with restrictions	$12-$15/hour
Florida	iBudget / Medicaid waiver	Yes in some programs	$11-$14/hour
Pennsylvania	ODP waiver / Participant-Directed	Yes (non-spouse)	$13-$16/hour
Ohio	PASSPORT waiver / SELF waiver	Yes (non-spouse)	$12-$15/hour
Illinois	DHS Medicaid waiver programs	Yes with restrictions	$13-$15/hour
Michigan	MI Choice waiver / MI LTSS	Yes (non-spouse)	$12-$14/hour

Pay rates reflect approximate Medicaid reimbursement rates as of recent data. Rates change; always verify with your state’s program.

Step-by-step: how to apply for a Medicaid waiver as a family caregiver

1. Verify the care recipient’s Medicaid eligibility through your state Medicaid office
2. Request a needs assessment for the care recipient (arranged through Medicaid or the local Area Agency on Aging)
3. Ask specifically about consumer-directed or self-directed care options in your state
4. Complete any required caregiver training through an approved provider
5. Pass a background check
6. Enroll through your state’s designated fiscal intermediary or program enrollment office
7. Begin tracking and documenting care hours for payment

What is CDPAP and how does it work?

The Consumer Directed Personal Assistance Program (CDPAP) in New York is one of the most comprehensive consumer-directed programs in the country. Under CDPAP, a Medicaid-eligible individual selects their own personal assistant, including family members (except legally responsible relatives in some cases), who are then compensated from Medicaid funds.

CDPAP has relatively lower formal training barriers than many other programs and has been used by tens of thousands of New York families to compensate relatives for providing care. Other states have similar programs under different names.

FAQ: Medicaid waivers for family caregivers

Can a child be paid to care for a parent through Medicaid?

Yes. Adult children are among the most common participants in Medicaid consumer-directed programs. The parent must be Medicaid-eligible and enrolled in a qualifying program, and the adult child must meet any training and background check requirements.

Can a spouse be paid through Medicaid waivers?

Most states exclude spouses from being paid as Medicaid-funded caregivers. However, in-laws, adult children, siblings, and other non-spousal family members are commonly eligible. Rules vary by state.

Is there a waiting list for Medicaid waiver programs?

Many waiver programs do have waiting lists, particularly in high-demand states. Applying early and ensuring all documentation is complete can improve your position. Contact your state Medicaid office for current wait time estimates.

Do I pay taxes on Medicaid caregiver income?

Generally, yes. Income earned as a paid caregiver through Medicaid waiver programs is typically considered taxable wages. Consult a tax professional for guidance on your specific situation.

Get trained and get started with NCOOA

Many Medicaid waiver programs require or recommend formal caregiver training before enrollment. NCOOA’s online programs meet common training requirements and help you become a more capable caregiver for your family member.