Caregiver Compensation Programs

ADLs (Activities of Daily Living)

Basic self-care tasks: bathing, dressing, eating, toileting, transferring, and continence. Most programs require difficulty with 2+ ADLs to trigger eligibility or LTC insurance benefits.

Adult Foster Care

Massachusetts term for Structured Family Caregiving — a Medicaid daily stipend for live-in family caregivers. Other states use different names for the same model.

Caretaker Child Exemption

A Medicaid rule allowing an adult child who lived with and cared for a parent for 2+ years (delaying nursing home placement) to receive the home as compensation — exempt from Medicaid estate recovery.

Cash & Counseling

Early name for consumer-directed Medicaid care. Care recipient receives a budget ('cash') and guidance ('counseling') to hire their own caregiver, including family members.

CDPAP

Consumer Directed Personal Assistance Program — New York's self-directed Medicaid program. Pay ~$18–22/hr. Consolidated to single fiscal intermediary (PPL) in 2025–2026. Over 100,000 family caregivers paid.

Community First Choice (1915k)

A Medicaid state plan option providing personal attendant services with self-direction for people needing institutional-level care. Available in ~9 states with enhanced federal matching funds.

Consumer-directed care

Umbrella term for Medicaid programs giving care recipients control over hiring and managing their own caregiver — including family. Also: self-directed, participant-directed, or cash & counseling.

DCFSA (Dependent Care Flexible Spending Account)

Pre-tax benefit account for qualifying dependent care expenses. 2026 limit raised to $7,500 (from $5,000 in place since 1986) by OBBBA. Employer must adopt the new limit. Reduces both income and payroll taxes.

Difficulty of care income

IRS term (Notice 2014-7) for payments made for care of a disabled individual in the caregiver's home. SFC stipends typically qualify as federally tax-free when caregiver and recipient live together.

Fiscal Intermediary (FI)

An organization managing employer-of-record duties in consumer-directed Medicaid programs — payroll, taxes, background checks, compliance. Examples: FreedomCare, Public Partnerships LLC (PPL), Careforth.

HCBS (Home and Community-Based Services)

Medicaid-funded care provided at home or in the community. The largest source of paid family caregiving in the U.S. Delivered through 1915(c) waivers, state plans, and other authorities.

IHSS (In-Home Supportive Services)

California's large Medicaid HCBS program. Family members including spouses can be paid $17–$25/hr depending on county. ~600,000 participants. Apply through county social services.

IRS Notice 2014-7

IRS guidance classifying certain Medicaid HCBS and SFC payments as tax-free 'difficulty of care' income when the caregiver and care recipient share a home. Primary tax advantage of SFC over hourly HCBS programs.

MAPR (Maximum Annual Pension Rate)

The maximum VA pension benefit per tier. Actual monthly payment = (MAPR − countable annual income) ÷ 12. Large care costs reduce countable income and increase the actual benefit.

NFCSP (National Family Caregiver Support Program)

Federal grant program under the Older Americans Act funding respite care, training, counseling, and supplemental grants for caregivers of adults 60+. Administered locally by Area Agencies on Aging.

OBBBA (One Big Beautiful Bill Act)

Signed July 4, 2025. Raised DCFSA limit to $7,500 (2026) and enhanced CDCC to 50% for lower incomes. Also cut federal Medicaid spending by ~$911 billion over 10 years — putting HCBS programs at risk.

PASSPORT Waiver

Ohio's Medicaid HCBS waiver for adults needing nursing-home level of care. Includes consumer-directed option for family caregiver pay. Apply through your Ohio Area Agency on Aging.

PCAFC

Program of Comprehensive Assistance for Family Caregivers. VA program providing monthly stipend + health insurance + mental health counseling + respite care to caregivers of veterans with 70%+ SC disability. Legacy cohort protected through Sept 2028.

Personal Care Agreement (PCA)

A legally binding contract between care recipient and family caregiver defining services, hours, and pay. Critical for Medicaid planning — payments without a PCA can be classified as gifts and trigger the 5-year lookback penalty. Must be executed before services begin.

Structured Family Caregiving (SFC)

Medicaid program in 11 confirmed states (2026) paying a tax-free daily stipend ($40–$70/day) to a live-in family caregiver. Named differently by state: Adult Foster Care (MA), Adult Family Living (CT), RIte@Home (RI), Coordinated Caregiving (NC), Monitored In-Home Caregiving (LA).

VDC (Veterans Directed Care)

VA program giving eligible veterans a monthly flexible care budget to hire their own caregiver, including family members. Available at VA medical centers with VDC programs.

WA Cares Fund

Washington State's public long-term care insurance program. Funded by 0.58% employee payroll deduction. Benefits begin July 1, 2026. Up to $36,500 lifetime benefit (inflation-adjusted) for qualifying LTC needs including family caregiver payment.

1915(c) HCBS Waiver

Federal Medicaid authority allowing states to waive certain rules to provide home and community-based services — including self-directed consumer care — to people who would otherwise require nursing home placement. The most common authority for paid family caregiver programs.