How to Get Paid as a Family Caregiver — What States Allow It & Why Agencies Matter

Many families don’t realize this — but in most U.S. states, Medicaid offers programs that allow a loved one to receive payment for providing care at home. If you or a client run a home care agency, this is powerful: it opens the door to helping families get reimbursed, stay compliant, and even turn caregiving into stable work.

In this guide, you’ll learn:

• What “self-directed/consumer-directed” Medicaid care means

• How a family member can be paid (directly or via agency)

• Which states allow paid family caregivers — including a few you might not expect

• Why using an agency can often be smarter than “DIY”

• What to check before you or your clients get started

What Is Self-Directed Medicaid Care?

Medicaid Home and Community-Based Services (HCBS) waivers — or state plan options — allow people who qualify (due to age, disability, physical or intellectual/developmental need) to receive care at home instead of in a facility. Under many of these programs, recipients can choose a self-directed or consumer-directed model. Medicaid Planning Assistance+2NASHP+2

Self-direction gives the care recipient (or their authorized representative) employer-of-record authority — meaning they decide who will provide care. That “who” can be a family member or friend (rather than a traditional agency caregiver). Medicaid Planning Assistance+2KFF+2

Depending on the state, payment for that caregiver can flow in one of two ways:

1. Direct pay (self-directed care): The family member is paid directly via Medicaid funds, often through a fiscal intermediary or “financial employer agent” who handles payroll, taxes, etc. NASHP+2Medicaid Long Term Care+2

2. Agency-directed model: A licensed home care agency is the employer, bills Medicaid, and pays the family member as an employee. This adds structure and oversight while still allowing family caregivers to be compensated. NASHP+2longtermcarelink.net+2

Why Many Families & Agencies Prefer Using an Agency

While direct pay may seem simpler, there are strong reasons many families — and home care entrepreneurs — opt for the agency route:

• Payroll, taxes, paperwork — handled professionally. No worries about hourly tracking, withholdings, compliance.

• Built-in training and oversight. Agencies often provide training, supervise care delivery, ensure safety and compliance.

• Flexibility & support. Agencies can supplement care (respite, weekend help, backup) which can be lifesaving for family caregivers.

• Stability & legitimacy. For families seeking consistent, quality care — or caregivers seeking stable income — agency-employment adds professionalism and peace of mind.

• Compliance with Medicaid requirements. Many state waivers or plans require that caregiver be an approved provider — which agencies are set up to handle.

For home care business owners (or those thinking about launching one), this offers a real opportunity: you can position your agency as the facilitator that helps families get paid, stay compliant, and receive support without the chaos.

States That Allow Paid Family Caregivers — And Some Under the Radar

According to several recent sources, all 50 states + DC have at least one Medicaid-funded program (state plan or waiver) that supports self-direction and allows family members (and in many cases friends) to be hired as paid caregivers. Medicaid Planning Assistance+2KFF+2

Here are some of the more well-known — plus a few you might not have immediately thought of:

• California — In-Home Supportive Services (IHSS) Paid.Care+1

• Florida — Consumer-Directed Care Plus (CDC+) & other waiver programs LegalClarity+1

• Arizona — ALTCS (Self-Directed Attendant Care) LegalClarity+1

• Kentucky — HCBS/consumer-directed waiver options Medicaid Planning Assistance+1

• Ohio — PASSPORT & other waiver/self-direction options LegalClarity+1

• Vermont — Medicaid HCBS & self-direction programs KFF+1

• Maine, Oregon, Kansas, Alabama, North Carolina — all have Medicaid/self-directed waiver or state-plan options that allow payment to family caregivers under certain programs. Medicaid Planning Assistance+2Medicaid Long Term Care+2

Less obvious (but important) states:

• Indiana — via its Waiver/CDAC program. CaringPays+1

• Colorado — through its consumer-directed attendant support services (CDASS). LegalClarity+1

• Michigan, Minnesota, Missouri, New Jersey, Pennsylvania, Wisconsin — all appear on recent national lists of states that allow family- caregiver pay in some form. LegalClarity+2CaringPays+2

⚠️ Important: Even when a state allows family pay — eligibility and which family members are allowed (adult child, sibling, spouse, etc.) depend on the specific waiver or plan, and sometimes the particular population (aging, physically disabled, I/DD, etc.).

What You Should Check (or Make Clients Check) Before Going For It

1. Confirm the correct Medicaid pathway — state plan vs waiver; HCBS vs personal care services. Not all pathways pay family. National Health Law Program+2Medicaid Long Term Care+2

2. Check caregiver eligibility: some waivers exclude legally responsible relatives (like parents of minors or certain guardians). National Health Law Program+1

3. Use a fiscal intermediary or agency — especially in states that require provider-status for paid caregivers under Medicaid.

4. Get full documentation & compliance — background checks, training, timesheets, employer-of-record paperwork to satisfy Medicaid, audits, and eligibility reviews.

5. Plan for flexibility: Sometimes families later need respite or additional support — an agency can supply that seamlessly.

Why This Is an Opportunity for Home Care Agencies & Entrepreneurs

If you run — or plan to run — a home care or home health agency, offering services under these Medicaid waivers/self-directed programs is a major growth area.

You can:

• Provide structure and support to families who want to pay a loved one but don’t want the hassle of managing payroll or compliance.

• Offer training and supplemental staffing (respite, backup care) to keep the caregiving sustainable.

• Help families navigate Medicaid waivers/self-direction, giving them knowledge and ensuring eligibility (especially in states with restrictive rules).

• Stand out as a resource, not just for care—but for guidance and peace-of-mind.

Mentor Tip

Yes — in 2025 and beyond, you can absolutely get paid to care for a loved one under Medicaid in many states. And it’s not just a benefit to families — it’s a real opportunity for home care agencies and entrepreneurs to grow, serve, and make a positive impact.

If you're curious about how to set up your agency to work with these Medicaid waiver programs (licensing, compliance, billing, caregiver training, etc.), I’m here for you.

💻 Book a 10-minute call: https://SavvyBusinessChick.as.me/10MINSwithME
🧰 Explore our DIY Licensing Kits and Home Care CEO Mentorship program — and let’s turn this opportunity into income + impact.