Yes, a family member can get paid as a caregiver in Pennsylvania. Four programs make it possible: Community HealthChoices, the OBRA Waiver, the Act 150 Program, and Veteran-Directed Care. Each lets the person receiving care choose their own worker and hire a relative, with one big catch across most of them: spouses are not allowed to be paid, and neither are legal guardians or anyone holding power of attorney. Adult children, siblings, grandchildren, nieces, nephews, and other relatives generally can be.
Which Program Fits Your Situation
The right program depends on who needs the care and how their finances look.
Community HealthChoices (CHC) is Pennsylvania’s mandatory Medicaid managed care program for adults 21 and older who are dually eligible for Medicare and Medicaid, older adults, and people with physical disabilities. Participants can self-direct their care, which is what opens the door to hiring a family member. Enrollment runs through one of three managed care organizations covering the state.1Commonwealth of Pennsylvania. Community HealthChoices2Pennsylvania Department of Human Services. Eligibility for Community HealthChoices
The OBRA Waiver is a Medicaid home and community-based waiver for people ages 18 to 59 with a severe developmental physical disability that appeared before age 22 and is expected to continue indefinitely. Qualifying conditions include cerebral palsy, spina bifida, epilepsy, and autism, among other severe physical or neurological disabilities. Like CHC, it allows participant-directed services and paid family caregivers.3Commonwealth of Pennsylvania. OBRA Waiver Appendix B – Participant Access and Eligibility4Department of Human Services. OBRA Waiver
The Act 150 Program is the option when the person needing care makes too much to qualify for Medicaid. It is state-funded and covers adults ages 18 to 59 with a physical disability who have been turned down for Medicaid on financial grounds. Participants pay a co-payment based on income and can hire family members for attendant care, though spouses, legal guardians, and anyone holding power of attorney are excluded. The participant also has to be able to hire, supervise, and if necessary fire their own caregiver, and manage their own financial and legal affairs.5Commonwealth of Pennsylvania. Apply for In-Home Care for People With Physical Disabilities (Act 150)6Commonwealth of Pennsylvania. Act 150 Program Guidelines
Veteran-Directed Care (VDC) is a federal VA program for enrolled veterans of any age who need help with daily activities. It provides a flexible budget and gives veterans more freedom in who they hire, including family. There is no income or asset test, but the veteran must be enrolled in VA health care and receive clinical approval.7U.S. Department of Veterans Affairs. Veteran-Directed Care
Who Can and Cannot Be the Paid Caregiver
Spouses are the sticking point. Under Act 150 and CHC, a husband or wife cannot be paid to care for their spouse, and neither can a legal guardian or an agent under power of attorney.6Commonwealth of Pennsylvania. Act 150 Program Guidelines Adult children caring for a parent, siblings, grandchildren, aunts, uncles, nieces, nephews, and even close friends or neighbors are all eligible if they meet the same qualification standards that apply to agency workers. Veteran-Directed Care is more flexible, and veterans may hire nearly any caregiver they choose.7U.S. Department of Veterans Affairs. Veteran-Directed Care
Every paid direct care worker in Pennsylvania has to clear a criminal background check. A State Police record is enough for anyone who has lived in the state at least two years. Otherwise, an FBI check is also required, along with a determination letter from the Department of Aging.8Pennsylvania Code. 28 Pennsylvania Code 611.52 – Criminal Background Checks The caregiver also needs the legal right to work in the U.S. and standard identification such as a Social Security card and photo ID.
How Much You Get Paid
Pay is hourly, and rates for participant-directed attendant care sit near $15 per hour. A 2025 state rate study found existing fee schedule rates close to that mark, with a lower-bound benchmark wage of $14.58.9Commonwealth of Pennsylvania. CY 2025 HCBS Rate and Wage Study The exact rate depends on the program, the managed care organization, and sometimes the county.
Paychecks don’t come directly from the state. A financial management services (FMS) organization handles payroll, tax withholding, and timesheets. Depending on the model used, the FMS is either the employer of record or an administrative agent while the participant is technically the employer.10Allegheny County Department of Human Services. Participant Directed Services and Financial Management Services Fact Sheet Either way, the caregiver gets regular paychecks with taxes withheld, most often by direct deposit.11Pennsylvania Health Law Project. Tempus Unlimited Now Performing Financial Management Services in CHC
One rule that families miss early: the number of paid hours is set by the care plan, not by the caregiver. Someone authorized for 20 hours a week cannot log 40. Exceeding authorized hours creates trouble with the MCO fast.
The Tax Break for Live-In Family Caregivers
If the caregiver and the person receiving care live in the same home, and the payments come from a Medicaid waiver program (CHC or OBRA), the wages can be completely excluded from the caregiver’s federal gross income. IRS Notice 2014-7 treats these payments as “difficulty of care” payments under Internal Revenue Code Section 131, so they are not subject to federal income tax.12Internal Revenue Service. IRS Notice 2014-7
Shared home is the linchpin. An adult child who lives with a parent and provides Medicaid-funded care can have those earnings entirely federally tax-free. A caregiver who visits daily but keeps a separate address does not qualify. The exclusion also does not cover Act 150 pay, because Act 150 is state-funded and not a Medicaid waiver.12Internal Revenue Service. IRS Notice 2014-7
Caregivers who qualify can ask their FMS organization to stop withholding federal income tax. Those who paid tax on this income in earlier years may be able to file amended returns for a refund; a tax professional familiar with Medicaid waiver income is worth consulting before doing so.
Where to Start
For CHC, OBRA, and Act 150, the entry point is the local Area Agency on Aging. Pennsylvania has 52 AAAs, each covering a specific county or group of counties, and they are the front door for aging and disability services in the community.13Commonwealth of Pennsylvania Department of Aging. Area Agencies on Aging AAA staff run a needs assessment and help sort out which program fits. If CHC is the answer, the participant then enrolls with one of three managed care organizations, which builds a service plan setting the authorized hours and confirming the chosen caregiver.1Commonwealth of Pennsylvania. Community HealthChoices Veterans go a different route and contact their local VA medical center directly.
Plan on several weeks at a minimum. Medicaid applications need income and asset documentation, medical evaluations take time to schedule, and the caregiver’s background check adds another step. Families who pull paperwork together before the first AAA meeting tend to move through the process faster.