If you have cut your hours, left a job or moved home to look after Mom or Dad, you have probably asked whether you can get paid to take care of an elderly parent. The answer is often yes, but rarely automatically. Payment almost always comes through a program your parent qualifies for, not through you directly, and each program has its own rules about which relatives can be hired.
Federal guidance on long-term care notes that most care at home is given by unpaid family and friends1. If your parent will pay you directly, read our guide to a caregiver agreement for a family member. This guide walks through the ways family caregivers do get paid: Medicaid self-directed care, VA programs, long-term care insurance, and a private caregiver agreement paid from your parent's own money. It also covers taxes and the paperwork that keeps everyone safe.
Ways to get paid to take care of an elderly parent
There are five main routes. Most families end up using one, sometimes two. (If you need unpaid, job-protected time off rather than pay, see FMLA to care for a parent.)
| Route | Who it is for | Who decides |
|---|---|---|
| Medicaid self-directed home care | Parents who qualify for Medicaid long-term care and want to stay home | Your state Medicaid agency |
| VA family caregiver programs | Veterans with qualifying needs and their caregivers | The VA Caregiver Support Program |
| VA pension with Aid and Attendance | Wartime veterans and survivors with limited income who need daily help | VA pension office |
| Long-term care insurance | Parents with a policy that allows informal or family caregivers | The insurer, under the policy terms |
| Private caregiver agreement | Parents with savings or income to pay you | Your parent (or their agent under a power of attorney) |
Programs change by state and year. Always confirm the current rules with the agency or insurer.
Medicare is missing from that list on purpose. Medicare covers part-time skilled nursing and therapy at home from a certified agency for people who are homebound, but it does not pay family members for personal care such as bathing, dressing or meals2. For the full difference, see home care vs. home health.
Medicaid self-directed care: the most common way family gets paid
Every state's Medicaid program covers some home and community-based services for older adults who need a nursing-home level of care, usually through waivers or state plan options3. Many of these programs offer a self-directed (also called consumer-directed or participant-directed) option. Instead of an agency sending an aide, your parent, or someone acting for them, hires and manages their own caregiver4. See home care agency vs. private caregiver for the trade-offs of hiring directly.
Self-direction is where family caregivers come in. In most states that offer it, your parent can choose an adult child, grandchild or other relative as the paid caregiver. The program pays an hourly wage for approved hours, usually through a financial management service that handles payroll and taxes4.
Which relatives can be hired
Federal rules leave a lot to the states. Under the self-directed personal assistance option, states may choose to let participants hire legally liable relatives such as a spouse, as long as the state sets out the rules in its plan5. Under the Community First Choice option, states can also cover attendant care that the person directs6. In practice:
- Adult children: Allowed in most self-directed programs, sometimes with a rule that they not live in the same home or that a second person reviews the timesheets.
- Spouses: Allowed only in some states and programs, often under extra conditions.
- Guardians and agents: Many programs bar the person who directs the care, such as a guardian or the agent under a power of attorney, from also being the paid caregiver, to avoid supervising yourself.
How to apply
- Check Medicaid eligibility. Your parent must meet the state's income and asset rules for long-term care Medicaid and a functional assessment showing they need help with daily activities.
- Ask about self-direction by name. Contact the state Medicaid agency or your local Area Agency on Aging through the Eldercare Locator and ask which home care programs offer a self-directed option7.
- Expect a waiting list. Many waiver programs cap enrollment, so apply early even if you are not ready to start. See Medicaid waivers for home care for how to apply.
- Complete caregiver onboarding. Expect a background check, tax forms, sometimes training, and timesheets for every shift.
Rules about how many hours are paid, the hourly rate and who can be hired are set in each state's program. Our guide to Medicaid waivers explains how waivers work and how waiting lists are managed.
VA programs that can pay family caregivers
If your parent is a veteran, or the surviving spouse of one, the VA offers three separate paths. They have very different rules.
Program of Comprehensive Assistance for Family Caregivers
This program pays a monthly stipend to a Primary Family Caregiver. The veteran must have a VA disability rating of 70 percent or higher, have been discharged, need at least six months of continuous in-person personal care, and be enrolled in VA health care. A son, daughter, spouse or other family member can apply jointly with the veteran using VA Form 10-10CG. Caregivers also get training, mental health counseling, at least 30 days of respite a year and, if they lack other coverage, health benefits through CHAMPVA8.
Many older veterans do not have a 70 percent rating. They may still get training and support through the VA's general caregiver support services9.
Veteran-Directed Care
Veteran-Directed Care gives veterans who need help with daily activities a flexible budget for services and lets them hire their own workers, including family members or neighbors. It is offered through local VA medical centers working with aging and disability agencies, so availability depends on where your parent lives10.
Aid and Attendance
The VA pension's Aid and Attendance benefit adds a monthly amount for wartime veterans and survivors who need help with daily activities and meet income and net worth limits11. The money goes to the veteran, who can use it to pay a family caregiver under a written agreement. Read more in our VA Aid and Attendance guide.
Long-term care insurance and other options
Some long-term care insurance policies pay for care from informal caregivers, which can include relatives, while others only reimburse licensed agencies. Read the benefit triggers and the definition of an eligible provider, then ask the insurer in writing whether a family member qualifies13. Our long-term care insurance guide explains elimination periods and how claims start.
Other programs do not pay wages but can ease the cost of caregiving:
- National Family Caregiver Support Program. Funded under the Older Americans Act, it gives caregivers counseling, training, respite and sometimes supplemental services through local aging agencies14.
- Adult day programs. A few days a week of adult day care can let you keep working.
- Employer benefits. Family leave laws and some employers offer job-protected or paid leave for caregiving. Ask your HR department.
Read moreLong-Term Care Insurance: What It Covers and How It Works
When your parent pays you: the caregiver agreement
If your parent has savings or income, they can pay you directly. Families often call this a personal care agreement or caregiver contract. Done well, it treats you like any other caregiver: a defined job, a fair hourly rate for your area, and records of the hours you work.
A written agreement matters for three reasons:
- Medicaid. If your parent later applies for Medicaid long-term care, informal payments to family can look like gifts and may delay eligibility. A signed agreement, set before care begins, with market-rate pay and logs, is much easier to defend. See how the Medicaid look-back period works.
- Taxes. Money you are paid for caregiving is generally income to you. If your parent controls how and when you work, they may be a household employer with payroll tax duties15.
- Family harmony. Siblings are less likely to feel blindsided when the arrangement is clear and shared.
- Names of the parties and the start date
- The specific tasks, such as bathing, meals, medications, transport and bill paying
- Hourly rate and schedule, compared with local agency rates
- How hours are logged and how often you are paid
- What happens if needs change, your parent moves, or you stop
- Signatures, and a lawyer's review if Medicaid may be needed later
Taxes on caregiver pay
How you are taxed depends on who pays you. If you also help support your parent, see claiming an elderly parent as a dependent.
- Medicaid waiver pay. If you live in the same home as your parent and are paid through a Medicaid waiver program for their care, those payments may be excludable from your income under IRS guidance on difficulty-of-care payments16.
- Private pay. If your parent pays you directly, the IRS household employer guide explains when they must withhold and pay Social Security and Medicare taxes and file Schedule H15.
- Your parent's side. Some care costs can count as medical expenses on your parent's return, and in some cases you may claim your parent as a dependent17.
A tax preparer can tell you which rules apply in your situation.
Is being the paid caregiver right for you?
Getting paid can make family caregiving sustainable, but the pay is usually modest compared with what you may give up. If your parent would also live with you, our guide to having an elderly parent move in covers the household side. Before you commit, weigh:
- Your income and retirement. Leaving work can reduce your own Social Security record and retirement savings.
- Hours that grow. Needs often increase. Programs approve a set number of hours, and the rest may still fall on you.
- Burnout. Plan regular breaks now, through family, respite or adult day care.
- The next step. If care at home stops being safe, compare assisted living vs. home care early so you are not choosing in a crisis.
If you want to compare local options while you sort out payment, you can take the care quiz or search WeFoundCare's directory of licensed providers.
