Can I Get Paid to Care for My Elderly Parent? Yes—Here's How

The Reality of Family Caregiving

If you're caring for an elderly parent, you're not alone. Over 53 million Americans provide unpaid care to family members, and many sacrifice their own income to do so. The average family caregiver spends 24 hours per week on caregiving tasks—that's a part-time job.

The financial impact is real: family caregivers lose an average of $522,000 in lifetime earnings due to reduced work hours, career interruptions, and missed promotions. But here's what many caregivers don't know—there are programs that can pay you for the care you're providing.

1. Medicaid Self-Directed Care Programs

This is the most common way family caregivers get paid. Most states have Medicaid programs that allow the care recipient to hire their own caregivers—including family members.

How It Works

1. Your parent must qualify for Medicaid (income and asset limits apply)
2. They must need a nursing-home level of care but want to stay at home
3. You apply for a self-directed or consumer-directed care program
4. Your parent becomes the "employer" and can hire you as their caregiver
5. Medicaid pays you for approved hours of care

Program Names by State

These programs go by different names:

• California: In-Home Supportive Services (IHSS)
• New York: Consumer Directed Personal Assistance Program (CDPAP)
• Texas: Community Attendant Services (CAS)
• Florida: Consumer-Directed Care Plus
• Washington: Individual ProviderOne
• Pennsylvania: Participant-Directed Services

Eligibility Requirements

• Your parent must be eligible for Medicaid
• They must need help with activities of daily living (bathing, dressing, eating, etc.)
• Some states exclude spouses from being paid caregivers
• Some states require the caregiver to pass a background check
• You may need to complete caregiver training

2. VA Benefits for Veteran Parents

If your parent is a veteran (or the surviving spouse of a veteran), several VA programs can provide money for family caregiving.

Program of Comprehensive Assistance for Family Caregivers (PCAFC)

This program provides a monthly stipend to family caregivers of eligible veterans. The veteran must have a serious injury incurred or aggravated in the line of duty.

• Stipend amount: $600-$2,500+ per month (based on care needs and location)
• Additional benefits: Health insurance through CHAMPVA, mental health counseling, respite care
• Eligibility: Veteran must need personal care services for at least 6 months

Aid & Attendance Benefit

This pension benefit provides extra monthly income to veterans (or surviving spouses) who need help with daily activities. While it doesn't directly pay the caregiver, it gives your parent money that can be used to pay you.

• Veteran benefit: Up to $2,229/month (2024)
• Surviving spouse: Up to $1,432/month (2024)
• Veteran with spouse: Up to $2,642/month (2024)

Veteran-Directed Care Program

Similar to Medicaid self-directed care, this program gives veterans a budget to hire their own caregivers, including family members.

3. Private Pay: Your Parent Hires You

If your parent doesn't qualify for Medicaid or VA benefits, they can still pay you directly from their own funds. This is called a "personal care agreement" or "caregiver contract."

Why a Written Agreement Matters

• Medicaid planning: Payments under a proper contract are not considered gifts, which matters if your parent later needs Medicaid
• Family conflict: A clear agreement prevents misunderstandings with siblings
• Tax documentation: Creates a paper trail for the IRS
• Legal protection: Protects both you and your parent

What to Include in a Caregiver Agreement

1. Specific services you'll provide
2. Hours per week of care
3. Hourly or monthly pay rate (use local home care agency rates as a guide)
4. Payment schedule
5. Start date and duration
6. Termination conditions
7. Signatures of both parties (and ideally a notary)

4. Long-Term Care Insurance

If your parent has a long-term care insurance policy, check whether it covers family caregivers. Many policies do, though some have restrictions.

What to Ask the Insurance Company

• Does the policy pay for family caregivers?
• Are there licensing or certification requirements?
• What's the daily or monthly benefit amount?
• Is there a waiting period before benefits start?
• What documentation is required?

Some policies require caregivers to be employed through a licensed home care agency. Others pay family members directly. Review the policy carefully or call the insurance company to confirm.

5. Tax Credits and Deductions

Even if you can't get direct payment, tax benefits can provide meaningful financial relief:

Dependent Care Tax Benefits

• Claim your parent as a dependent: If you provide more than half their support and they earn less than $4,700/year, you may be able to claim them
• Medical expense deduction: If you claim your parent as a dependent, you can deduct their medical expenses that exceed 7.5% of your income
• Child and Dependent Care Credit: If you pay for care so you can work, you may qualify for a tax credit up to $3,000

Difficulty of Care Payments

This is a valuable but little-known tax benefit. If you receive payments for caring for someone in your home through a state Medicaid waiver program, those payments may be tax-free.

Requirements: You must live in the same home as the person you're caring for, and the payments must come from a state program. The IRS allows these "difficulty of care" payments to be excluded from taxable income.

6. Other Ways to Get Financial Help

How to Get Started

Here's a step-by-step plan to explore your payment options:

1. 1

   Check your parent's Medicaid eligibility

   Contact your state Medicaid office or use the Medicaid eligibility tool on your state's website.

2. 2

   Ask about self-directed care programs

   If eligible for Medicaid, ask specifically about consumer-directed or self-directed programs that pay family caregivers.

3. 3

   Explore VA benefits if applicable

   If your parent is a veteran or veteran's spouse, contact the VA Caregiver Support Line at 1-855-260-3274.

4. 4

   Review any long-term care insurance

   Check if your parent has a policy and whether it covers family caregivers.

5. 5

   Consider a private caregiver agreement

   Consult an elder law attorney to set up a proper agreement if using your parent's personal funds.

6. 6

   Talk to a tax professional

   Learn about tax credits, deductions, and whether caregiver payments might be tax-free in your situation.

Frequently Asked Questions