More than 53 million Americans are providing care to a family member — and most don’t realize they may be eligible for compensation.
Family caregivers collectively deliver more than $600 billion worth of services each year, according to the National Council on Aging. Despite that contribution, approximately 40 percent of caregivers reduce their work hours or leave employment entirely, and the average caregiver spends $7,200 out of pocket annually on care-related costs. Only about 3 percent of adults over 50 carry long-term care insurance.
Five formal pathways now exist for family caregivers to receive payment — and a federal transparency rule that took effect this month is making it easier to access them.
Medicaid Reaches All 50 States
Medicaid is the broadest source of caregiver compensation in the United States. All 50 states and Washington, D.C. now offer at least one program that allows eligible family members to be paid for personal care services, according to Medicaid Planning Assistance, a nonprofit that helps families navigate long-term care options.
The primary pathway is through Home and Community-Based Services (HCBS) Waivers, which fund care provided in the home. Many states also operate consumer-directed or self-directed programs that let care recipients hire and supervise a family member as their paid caregiver.
Pay rates vary by state. Washington state reimburses up to $26.09 per hour; Alaska, $25.31; and California, $24.89. The national average is approximately $18 per hour. Lower-cost states may pay as little as $12 per hour.
To qualify, the care recipient must demonstrate a need for assistance with daily activities — such as bathing, dressing, meal preparation, or medication management — and meet Medicaid income limits set at the state level. Applications typically take two to four months to process, though HCBS waiver programs with waiting lists can take six to 12 months or more in some states.
Beginning in July 2026, all states are required to publicly report their Medicaid payment rates for home care services under a new federal transparency rule, making it easier for families to estimate potential earnings before applying.
VA Programs for Veteran Families
Families caring for veterans have access to a separate set of benefits through the Department of Veterans Affairs.
The Program of Comprehensive Assistance for Family Caregivers (PCAFC) provides a monthly stipend of $1,200 to $3,000 for the primary caregiver of a veteran with a service-connected disability rating of 70 percent or higher, along with respite care support. Two additional VA pension benefits — Aid and Attendance and Housebound — provide monthly cash allowances to eligible non-spouse family caregivers.
A fourth option, Veteran Directed Care, is available in 43 states and Washington, D.C. It provides veterans with a monthly budget they can use to hire and direct their own care team, which may include family members. VA applications typically process within two to three months.
State Paid Family Leave Programs Expanding
Fifteen states and Washington, D.C. now offer paid family leave programs that include caregiving, according to the National Council on Aging. Four more states — Delaware, Maine, Maryland, and Minnesota — are adding or expanding their programs in 2025 and 2026.
Duration and wage replacement rates vary. California’s program provides 60 to 70 percent of lost weekly wages for up to 18 weeks. Most state programs offer up to 12 weeks annually. Unlike Medicaid, paid family leave does not require the care recipient to have a low income, making it accessible to a broader range of families who might not otherwise qualify for government assistance.
Long-Term Care Insurance and Personal Care Agreements
Some long-term care insurance policies allow families to designate a family member as the paid caregiver. Policies vary widely; some restrict payments to licensed care agencies only. Families should review their policy documents carefully or consult with their insurer.
A fifth option — the personal care agreement — is a legally binding contract that establishes caregiver duties, hours, and compensation at rates comparable to local professional care. These agreements have no specific eligibility criteria, though elder law attorneys recommend formal documentation to ensure the arrangement is legally sound, particularly if the care recipient may later apply for Medicaid.
Tax Benefits
Caregivers may also qualify for federal tax relief. The Credit for Other Dependents provides up to $500 per qualifying individual. The Child and Dependent Care Credit may offer up to $3,000 in reimbursement. Medical expenses paid on behalf of a qualifying dependent may be deductible if they exceed 7.5 percent of the caregiver’s adjusted gross income.
Why This Matters for Home Care
For the estimated 53 million Americans managing daily caregiving responsibilities — including mobility assistance, repositioning, and hands-on personal care — these compensation programs can be the difference between sustainable care at home and caregiver burnout. Families combining financial support with the right home care setup, including medical-grade equipment, are better positioned to maintain that care safely over the long term. Learn more about adjustable home care beds designed for both caregiver and care recipient at sondercare.com/beds/.
Sources: National Council on Aging, Medicaid Planning Assistance, The Senior List, Suncrest Hospice
