Yes, Medicaid can pay a family member to work as the caregiver — but only through programs that allow it, and the rules differ by program.
Self-directed Medicaid options let the person receiving care recruit, hire and supervise their own workers.
Federal state plan personal care, by contrast, generally requires a provider who is not a legally responsible relative.
Here is how the programs work and what they ask of the caregiver.
Does Medicaid pay family members?
Yes.
The Department of Labor's Wage and Hour Division confirms that family or household members can be paid employees under Medicaid-funded home care programs, with the paid hours and services set in a program-approved plan of care.
The scale is large.
PHI estimates there are at least 1.5 million Medicaid-funded independent providers — direct care workers employed directly by consumers through publicly funded consumer-direction programs.
Being paid does not turn every hour of family help into employment.
For a paid family caregiver, the DOL generally limits the employment relationship under the FLSA to the paid hours in a reasonable plan of care, and help outside those hours stems from the family relationship.
That limit only holds when the plan is fair.
A plan of care is not reasonable if a program cuts paid hours because the participant picked a family member — the DOL's example is a plan cut from 30 hours to 15 once a daughter was chosen as the provider.
The limited interpretation has boundaries, too.
It does not apply to a worker with no preexisting family tie who becomes "like family" or moves in as a live-in — all of that worker's hours follow normal FLSA rules.
Medicaid programs can pay family caregivers; Medicare does not pay for ongoing non-medical caregiving on its own — it covers part-time or intermittent home health aide care only if the person is also getting skilled nursing or therapy at the same time.
For the routes beyond Medicaid, including the VA programs, the paid family caregiver guide covers them side by side.
Which Medicaid programs allow it?
Medicaid is not one program.
CMS lists self-direction under several authorities: state plan personal care, 1915(c) waivers, 1115 demonstrations, and the 1915(i), 1915(j) and 1915(k) options.
Which authority a state uses shapes who can be hired.
- State plan personal care. The federal rule requires services from a qualified individual who is not a member of the recipient's family, defined as a legally responsible relative, unless a waiver defines family differently.
- 1915(c) HCBS waivers. These waivers can cover case management, homemaker, home health aide, personal care, adult day health, habilitation and respite care services, among others.
- 1915(j) self-directed personal assistance. "Legally liable relatives" here can include a parent of a minor child, legally assigned caretaker relatives, and a spouse. States using this option can let participants hire any capable individual, including those relatives, as paid providers — it is a state option, not a guarantee.
Named programs show how far the exclusions diverge.
New York's CDPAP lets members hire a friend or family member as their personal assistant, except the member's spouse, designated representative, or the parent of a consumer under age 21.
Massachusetts' MassHealth PCA program bars the consumer-employer's spouse, a parent or foster parent of a minor consumer, and a surrogate — a legally responsible decision maker.
The same relative can qualify under one program and be barred by the next, so check the specific program's rule.
Tax treatment follows the program as well.
Under IRS Notice 2014-7, qualified payments under a state Medicaid HCBS 1915(c) waiver — for care of an eligible individual living in the provider's home — are difficulty-of-care payments excludable from gross income.
Payments under a Medicaid program other than an HCBS waiver are decided case by case, on the nature of the payments and the design of the program.
Confirm your own situation with the IRS guidance or a CPA.
Self-directed vs. agency route
Who counts as the employer is the dividing line between the two routes.
In a self-directed program, the participant holds what CMS calls "employer authority" — the decision-making authority to recruit, hire, train and supervise the individuals who furnish their services — plus "budget authority" over how the funds are spent.
The participant need not run payroll alone.
Under the 1915(j) rule, a financial management entity collects and processes workers' timesheets, processes payroll, withholding and payment of employment taxes and insurance, and tracks and reports the participant's budget.
CMS requires Financial Management Services to be available to people with budget authority, typically covering payroll, tax withholding and filing, workers' compensation, timesheets and benefits.
California's IHSS shows the employer side of that model in practice: the approved recipient hires an individual provider and is considered the provider's employer, responsible for hiring, training, supervising and firing.
The relative rule does not split along those lines.
The federal state plan personal care rule is not an agency-only rule: CMS lists state plan personal care among the self-direction authorities, and under that benefit a legally responsible relative is generally not the paid provider.
Whether a state lets a home care agency hire a client's relative as its own employee is a separate question our research did not confirm state by state.
Ask the state Medicaid agency or the program's fiscal intermediary how your state handles it.
One federal rule treats the routes differently, too.
The 2024 Medicaid Access Rule requires states to ensure providers spend 80% of 1915(c) payments for homemaker, home health aide and personal care services on direct care worker compensation, starting July 9, 2030.
Self-directed models where the beneficiary sets the wage are excluded from that calculation.
What the work pays beyond any one program is a separate question — for the occupation's federal wage tables, see caregiver pay.
Caregiver requirements: checks, training and EVV
Each program sets its own requirements for the caregiver.
Personal care aides have no federal training or competency requirement — PHI notes PCA rules are set, or not set, by each state — and the federal 75-hour training floors apply to home health aides and nursing assistants instead.
Enrollment is where a program vets its caregivers.
Becoming a California IHSS provider means attending a county provider orientation, completing the Provider Enrollment Form (SOC 426), signing the Provider Enrollment Agreement (SOC 846), and completing California DOJ fingerprinting and a criminal background check.
California also bars anyone convicted of, or incarcerated after a conviction for, specified crimes in the last 10 years from working as an IHSS provider, including fraud against a government health or supportive services program.
Training requirements are program-specific as well.
MassHealth requires PCAs hired after January 2014 to complete a one-time, mandatory four-hour New Hire Orientation within nine months of hire.
Clock-in rules reach these programs too.
Section 12006(a) of the 21st Century Cures Act requires states to use electronic visit verification for Medicaid-funded personal care services and home health services that require an in-home visit.
The deadlines are January 1, 2020 for personal care services and January 1, 2023 for home health services; states that do not comply face reduced federal funding.
CMS confirms the EVV mandate covers personal care services under state plan, 1915(c), 1915(i), 1915(j), 1915(k) and Section 1115 authorities — so self-directed and consumer-directed Medicaid caregivers are subject to it as well.
One exception matters for family caregivers: CMS says EVV requirements do not apply when the caregiver and the person receiving care live together, though states may still choose to require EVV.
By statute, an EVV system verifies six things: the type of service, the individual receiving it, the date, the location of service delivery, the individual providing it, and the time it begins and ends.
Confirm with the agency that runs the program
How to apply to a Medicaid family caregiver program
Applications run through the body that operates the program, and the paperwork and the order of steps differ by program.
Use the points below as a checklist to confirm with that program.
Identify your state's program
Ask the state Medicaid agency which self-directed or waiver programs operate in your state and which of them hire family caregivers. Program names and rules are state-specific.Confirm the person receiving care qualifies
The program decides whether the person receiving care is eligible for its services. Eligibility criteria are the program's own, so ask the program what it requires.A plan of care sets the paid hours
In the Medicaid-funded programs that pay family caregivers, the paid hours and services are set in a program-approved plan of care — the document the paid schedule comes from.Enroll as the paid caregiver
Complete the program's provider enrollment: background checks and fingerprinting where required, plus any orientation or training the program sets.Find out who issues the paycheck
In self-direction, CMS requires Financial Management Services to be available to people with budget authority, typically handling payroll and tax withholding. Programs differ: in California's IHSS, the State issues all provider paychecks.
When you contact the agency, three questions sort the details fast: which relatives the program can pay, what caregiver enrollment requires, and how the plan of care sets paid hours.
Ask for the program's own provider enrollment materials rather than relying on summaries.
Where to find your state's program
Start with your state Medicaid agency, which can point you to the waivers and self-direction options operating in your state.
These programs are state-run, and the program pages name who each one can pay and how to enroll.
Names differ by state.
New York's program is CDPAP and California's is IHSS, and other states run self-directed options under their own names — so search the agency's site for "self-directed" or "consumer-directed" services and for home and community-based services waivers.
Rules are not portable from one state to the next.
A relative who qualifies under one state's program may not qualify under another's, and a program can change its rules between the time you read about it and the time you apply.
Career information, not legal, benefits or tax advice. Program rules are set by the state agencies that run them and change over time — confirm current requirements with the agency that runs your state's program, and with the IRS or a CPA on tax questions.