I'll tell you the moment I learned to spot, back when I was buying houses from families in transition. It wasn't the diagnosis or the fall. It was when the person doing all the caregiving had quietly cut their hours at work, and the family's plan for replacing that money was "we'll figure it out."
A lot of the houses I bought came out of that sentence.
So I want to talk about the question you've probably typed into your phone at 11 at night and then felt a little guilty about: can I get paid to take care of my mom? It's not a selfish question. You're giving up income, maybe retirement savings, maybe a career you spent twenty years building. Asking whether any of that can be replaced is just math.
Here's the honest answer. Sometimes, yes. There are real programs that pay family members, and there's a private way to do it too. But none of them are automatic, most of them have a front door your parent has to walk through first, and one of them, done casually, can come back years later and cost your parent Medicaid coverage right when a nursing home bill lands.
You don't need to become an expert in any of this. You need to know which doors exist, which one fits your parent, and what to put in writing before a single dollar changes hands. That's what this post is for.
The Numbers Behind the Guilt
You're not the only one doing this, and you're not the only one feeling it in your bank account.
In Caregiving in the US 2025, published July 24, 2025, AARP and the National Alliance for Caregiving counted 63 million Americans providing care to a family member or friend. Seven in ten of those caregivers are employed. Half report a negative financial impact from caregiving, and a quarter say they're taking on debt because of it.
That same report included, for the first time, 11 million caregivers who receive some compensation through Medicaid, the VA, or other state programs. Read that one twice. Millions of families have already found a way to get some of this work paid. It isn't a loophole. It's how several of these programs were built.
Now the part that trips people up. Most families assume Medicare is the place to start, because Mom has Medicare. It isn't. According to Medicare.gov, Medicare doesn't pay for 24-hour-a-day care at home, and it doesn't pay for custodial or personal care, like help with bathing, dressing, or using the bathroom, when that's the only care you need. The day-to-day help you're probably giving is exactly the kind Medicare leaves out.
So the paid doors run through two other places: Medicaid and the VA. And there's a third, private door: your parent paying you directly out of their own money. That one needs the most care, and I'll show you why.
Door One: Medicaid Programs That Let Your Parent Choose the Caregiver
Medicaid.gov describes something called self-directed services. Under what it calls employer authority, the person receiving care has the authority to recruit, hire, train, and supervise the people who provide their services. That's the federal framework that lets many states put a family member on the payroll.
In North Carolina, the program most families will run into is CAP/DA, the Community Alternatives Program for Disabled Adults. Per NC Medicaid, it serves adults 18 and older who are on Medicaid and who've been found to need an institutional level of care, meaning the kind of care that would otherwise put them in a nursing facility. In plain English, CAP/DA pays for help at home so your parent doesn't have to move.
CAP/DA has a consumer-directed option. NC Medicaid says it lets your parent, or a designated representative, act as the employer of record and freely choose who provides their personal care, set that worker's pay rate, and assign the tasks. NC Medicaid's consumer-direction overview says a financial manager processes payroll for the personal assistant and handles the federal and state tax requirements, so you're not left figuring out withholding at the kitchen table.
Two cautions before you get your hopes up. First, your parent has to qualify for Medicaid and for CAP/DA before any of this matters, and that's its own process. Second, the rules on exactly which relatives can be the paid worker are specific, especially for a spouse, so ask the case manager directly: can the person we have in mind be the paid personal assistant? Get the answer before you plan around it.
To start, NC Medicaid says to contact the CAP/DA case management entity in the county where your parent lives and ask for a referral.
Door Two: The VA, If Your Parent Served
If Mom or Dad is a veteran, there are two VA programs worth knowing by name.
The Program of Comprehensive Assistance for Family Caregivers
This is the one with a stipend. Per the VA Caregiver Support Program, the veteran must have a single or combined service-connected disability rating of 70% or more, and must need in-person personal care services for at least six continuous months. The VA lists three ways to meet that need: being unable to perform an activity of daily living, needing supervision or protection because of a neurological or other impairment, or needing regular instruction or supervision to function day to day.
The veteran can name one Primary Family Caregiver and up to two Secondary Family Caregivers. If you're the primary, the VA says you may receive a monthly stipend paid directly to you, health insurance through CHAMPVA if you don't already have coverage, mental health counseling, certain travel benefits, and at least 30 days of respite care per year for the veteran. That last one matters more than it sounds. Thirty days of someone else covering is how caregivers keep going.
You apply with VA Form 10-10CG, online, by mail, or in person with your local Caregiver Support Program team.
Veteran Directed Care
The 70% rating shuts a lot of families out of the stipend program. This one is broader. According to the Administration for Community Living, which runs it with the VA, all veterans enrolled in VA health care who meet the clinical need for the service are eligible, regardless of age. The veteran gets a flexible budget and can hire family, friends, or neighbors to provide care.
The catch is availability. ACL says the program is offered nationally, but not every VA medical center has it. Your first call is to your parent's VA medical center to ask whether they offer Veteran Directed Care.
Door Three: Your Parent Pays You Directly
This is the door most families walk through without thinking, and it's where I want you to slow down.
It usually looks innocent. You've been driving Dad to appointments and managing his pills for two years. He insists on paying you back. He writes you a check for $20,000 and says it's for everything you've done. Everyone feels good about it.
Then, a couple of years later, Dad needs a nursing home and applies for Medicaid.
North Carolina's Medicaid manual, section MA-2240 on transfer of assets, revised December 8, 2025, sets a lookback period of 60 months. Anything your parent gave away for less than market value in those five years gets reviewed, and a transfer can trigger a sanction, a penalty period when Medicaid won't pay for certain long-term care services.
Here's the sentence that matters for you. NC Medicaid says to evaluate it as a transfer when a parent gives cash to a family member, relative, or friend for care or services that were provided for free in the past. And unless there was a written agreement for compensation at the time the care was received, the transfer is uncompensated.
Read that again with the $20,000 check in mind. No written agreement at the time means the payment for past care can be treated as a gift. Your thank-you money can turn into months when Medicaid won't pay.
A written agreement, sometimes called a personal services contract, is the fix, but the manual holds it to a standard too:
- The pay has to match market value. If your parent pays more than the services are worth, the extra is treated as a transfer. The manual says the county establishes that value with a written statement from a local business that provides those services.
- You have to actually deliver and document the care. The manual calls for a detailed statement of the amount and type of services received. If the contract ends or the care isn't provided at the frequency and value the contract spells out, the overpaid amount counts as an uncompensated transfer.
- A nursing facility admission changes things. Per the manual, once a parent with a personal services contract is admitted to a nursing facility, any contract or the remainder of an existing contract is considered a transfer for less than market value from that date forward.
None of this means you can't be paid by your parent. It means you do it on paper, at a fair rate, going forward, with a log. That's the version that holds up.
What About Taxes?
According to the IRS, pay you receive for caregiving is taxable income and has to be reported. Whether you also owe self-employment tax depends on whether you're in the trade or business of caregiving. The IRS gives examples of family members caring for a relative who don't owe self-employment tax because they aren't running a caregiving business.
There's one exception worth knowing if you live with your parent. Under IRS Notice 2014-7, certain payments from a state Medicaid home and community-based services waiver program can be treated as difficulty of care payments and excluded from your gross income, as long as your parent lives in your home. The IRS says your relationship to the person doesn't disqualify you. NC Medicaid describes CAP as a 1915(c) home and community-based services waiver, so if you're a live-in paid caregiver through it, ask your tax preparer about this one specifically.
What to Do, in This Order
Step 1: Stop assuming Medicare will cover it
It won't cover personal care alone. Crossing that off saves you weeks of calls and points you at the doors that can actually pay.
Step 2: Check the VA first if your parent served
Find the discharge papers and the VA disability rating letter. At 70% or higher, look at the stipend program. Below that, or with no rating, call the VA medical center and ask about Veteran Directed Care. The Caregiver Support Line is 1-855-260-3274, Monday through Friday, 8 AM to 8 PM Eastern.
Step 3: Find out whether your parent could qualify for Medicaid at home
If your parent's income and savings are limited and their care needs are high, call the CAP/DA case management entity in their county. Ask two questions: does my parent look like a fit, and can a family member be the paid worker under consumer direction?
Step 4: If your parent pays you, write it down before the next dollar moves
Don't accept a lump sum for care you've already given. Put a written agreement in place first, at a rate a local home care business would charge, and keep a simple log of dates, hours, and tasks. Have an elder law attorney draft or review the agreement, because they'll know how your county reads it.
Step 5: Get a tax answer before the first payment
Ask a tax preparer how the income will be reported, and whether the Medicaid waiver exclusion applies if you live together.
Step 6: Put the house on the list now
If your parent owns a home and long-term care is coming, the house decision and the Medicaid decision are tangled together. Talking about it early, before a crisis sets the timeline, keeps you choosing instead of reacting.
Frequently Asked Questions
Does Medicare pay family members to take care of a parent?
No. According to Medicare.gov, Medicare doesn't pay for 24-hour care at home or for custodial or personal care, like help with bathing, dressing, or using the bathroom, when that's the only care a person needs. Paid family caregiving usually runs through Medicaid self-directed programs or the VA instead.
Can a family member get paid through NC Medicaid CAP/DA?
CAP/DA has a consumer-directed option that lets the Medicaid beneficiary, or a representative, act as the employer of record and freely choose who provides personal care and set the pay rate. Your parent must first qualify for Medicaid and CAP/DA, and specific rules apply to certain relatives, so ask the county CAP/DA case management entity whether your family member can be the paid worker.
How does the VA pay family caregivers?
Through the Program of Comprehensive Assistance for Family Caregivers, a Primary Family Caregiver may receive a monthly stipend if the veteran has a 70% or higher service-connected disability rating and needs at least six continuous months of personal care. Veteran Directed Care is broader and lets eligible veterans hire family, but not every VA medical center offers it.
Will Medicaid count payments from my parent to me as a gift?
In North Carolina it can. The NC Medicaid transfer of assets manual says payment to a relative for care that was provided for free in the past is uncompensated unless there was a written agreement for compensation at the time the care was received. Payments above market value can also count as a transfer during the 60-month lookback period.
Is money I earn caring for my parent taxable?
Generally yes. The IRS says caregiving pay is taxable income, though you may not owe self-employment tax if you aren't in a caregiving business. Under IRS Notice 2014-7, certain Medicaid waiver payments can be excluded from income when the care recipient lives in your home.
About Ryan Riggins
Ryan Riggins is a senior transition advisor and former house flipper. After 8+ years buying homes from families in transition, he walked away from the cash-buyer side to help families avoid the $50K mistakes he used to profit from. Based in Greensboro, NC. NC Real Estate License #361546, eXp Realty. Founder of Riggins Strategic Solutions and the Hammock365 app.
Feeling it already? The free Caregiver Burnout Triage takes two minutes and tells you honestly where you are: rigginsstrategicsolutions.com/tools/caregiver-burnout-triage
Want a step-by-step guide? The Senior Transition Blueprint is free, all 20 modules and 69 tools: rigginsstrategicsolutions.com/the-blueprint
Not sure where your family stands? The free Family Readiness Score takes five minutes and shows the gaps across the home, the money, the legal documents, care, and family alignment: rigginsstrategicsolutions.com/tools/family-readiness-score
Need a personalized plan? The Senior Transition Roadmap is free, by application. It adds calls with Ryan and 90 days of email support: rigginsstrategicsolutions.com/the-roadmap
Selling a parent's home? Ryan finds and vets the right local agent for your situation and stays in your corner on the whole sale, at no added cost to your family: rigginsstrategicsolutions.com/in-your-corner
Coordinate the family in one place. Hammock365 keeps daily check-ins, medications, and documents where the whole family can see them: hammock365.com
Sources
Checked September 16, 2026.
- AARP and the National Alliance for Caregiving, Caregiving in the US 2025, published July 24, 2025. The 63 million caregivers, seven in ten employed, half with a negative financial impact, a quarter taking on debt, and 11 million receiving some compensation. https://www.aarp.org/pri/topics/ltss/family-caregiving/caregiving-in-the-us-2025/
- Medicare.gov, Home health services coverage. What Medicare doesn't pay for, including 24-hour care at home and custodial or personal care when it's the only care needed. https://www.medicare.gov/coverage/home-health-services
- Medicaid.gov, Self-Directed Services. Employer authority to recruit, hire, train, and supervise. https://www.medicaid.gov/medicaid/long-term-services-supports/self-directed-services
- NC Medicaid, Community Alternatives Program for Disabled Adults (CAP/DA). Eligibility, consumer-directed services, and how to request a referral. https://medicaid.ncdhhs.gov/providers/programs-and-services/long-term-care/community-alternatives-program-disabled-adults-capda
- NC Medicaid, NC Community Alternatives Program Consumer-Direction Overview. The 1915(c) waiver and the financial manager's payroll and tax role.
- NC Medicaid, Aged, Blind and Disabled Medicaid Manual, MA-2240 Transfer of Assets, revised 12/8/2025. The 60-month lookback, personal services contracts, and transfers for love and consideration. https://policies.ncdhhs.gov/wp-content/uploads/MA-2240-Transfer-of-Assets-1.pdf
- VA Caregiver Support Program, Program of Comprehensive Assistance for Family Caregivers (page updated September 14, 2026). Eligibility, primary caregiver benefits, VA Form 10-10CG, and the Caregiver Support Line. https://www.caregiver.va.gov/support/support_benefits.asp
- Administration for Community Living, Veteran Directed Care. Eligibility, hiring family, friends, or neighbors, and availability by VA medical center. https://acl.gov/nwd/veteran-directed-care
- IRS, Family caregivers and self-employment tax (reviewed June 30, 2026). https://www.irs.gov/businesses/small-businesses-self-employed/family-caregivers-and-self-employment-tax
- IRS, Certain Medicaid waiver payments may be excludable from income (reviewed April 29, 2026), and Notice 2014-7. https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-from-income
