How Much Does Medicaid Pay Family Caregivers in New York?

Medicaid pays family caregivers in New York through the Consumer Directed Personal Assistance Program (CDPAP), and the hourly rate depends on where the care recipient lives. In 2026, the wage floor is $17.00 per hour in New York City, Long Island, and Westchester County, and $16.00 per hour in the rest of the state.¹ In the downstate region, a wage parity supplement pushes total compensation to roughly $21 per hour in New York City and above $20 in Nassau, Suffolk, and Westchester. Upstate, the minimum wage is generally what the caregiver earns.

How the Pay Number Is Built

The hourly wage a caregiver takes home is not the same as the rate Medicaid pays for the service. The New York State Department of Health sets a reimbursement rate that covers wages plus the employer-side costs of employing the caregiver: payroll taxes, workers’ compensation insurance, and the fiscal intermediary’s administrative fee. Whatever is left after those costs becomes the caregiver’s wage.

As of the rate schedule effective January 1, 2025, the basic CDPAP hourly reimbursement rates are:

New York City: $26.89 per hour
Nassau, Suffolk, and Westchester counties: $25.72 per hour
Rest of State: $24.01 per hour²

So a caregiver in Manhattan working at a $26.89 reimbursement rate is not paid $26.89. After the fiscal intermediary keeps its share and taxes and insurance are covered, the caregiver typically sees a wage in the low-$20s per hour with the wage parity supplement, or the minimum wage plus supplement if paid at the floor.

The Wage Parity Supplement in NYC and Nearby Counties

New York’s Home Care Worker Wage Parity Law requires an additional hourly benefit on top of the minimum wage for aides doing Medicaid-reimbursed work in New York City and in Nassau, Suffolk, and Westchester counties. The supplement is $4.09 per hour in New York City and $3.22 per hour in Nassau, Suffolk, and Westchester.³ The employer can pay it as straight wages, as benefits like health insurance, or as a mix. When it comes through as wages, total compensation lands near $21 per hour in NYC and just over $20 in the surrounding suburban counties.

Caregivers in upstate and rural counties do not receive this supplement. Their pay is generally the $16.00 per hour minimum, though some fiscal intermediary policies may raise it modestly.

Overtime and Live-In Hours

Personal assistants who work more than 40 hours in a week are generally entitled to overtime pay. Live-in caregivers follow slightly different federal rules: they can agree with the consumer to exclude sleeping time and meal periods from paid hours, but any interruption during those periods must be paid, and they remain entitled to at least minimum wage for every hour that counts as work.⁴

Hours are capped by the consumer’s plan of care. Time worked beyond the authorized number of hours may not be paid, so a caregiver planning on overtime should confirm the authorization in advance.

Which Relatives Can Be Paid

Most family members qualify: adult children, siblings, grandchildren, nieces, nephews, and other relatives, as long as they are at least 18 and legally authorized to work in the United States.⁵

Three relationships are excluded from paid caregiving:

A spouse cannot be paid to care for their husband or wife.
A parent cannot be paid to care for their child if the child is under 21.
A person acting as the consumer’s designated representative (the one making care decisions when the consumer cannot self-direct) cannot also be the paid caregiver.⁵

That last rule surprises families. If your mother has dementia and you’re her designated representative, another person has to be either the representative or the paid caregiver. You cannot fill both roles.

The Tax Break for Live-In Caregivers

A caregiver who lives with the care recipient may be able to exclude their CDPAP wages from federal gross income entirely. Under IRS Notice 2014-7, Medicaid waiver payments to a care provider living in the same home as the recipient are treated as difficulty-of-care payments and are not taxable under Section 131 of the Internal Revenue Code.⁶

The key word is “home.” The IRS looks at whether the caregiver actually lives there in the ordinary sense: sharing meals, spending holidays, running a private life from that address. A caregiver who keeps their own apartment and stays over several nights a week does not qualify, even with heavy overnight hours.⁶

When wages are excludable, federal income tax should not be withheld. Notify the payroll processor so paychecks are handled correctly. Vacation pay from the state stays taxable even when regular wages qualify. Caregivers who do not live with the recipient should expect standard federal income tax withholding.

Effect on SSI and Disability Benefits

CDPAP wages count as earned income for most benefit programs. For 2026, the federal SSI benefit rate is $994 per month for an individual, and the program disregards the first $65 of earned income plus half of what remains.⁷ Even part-time caregiving hours can reduce or eliminate an SSI payment.

The live-in exclusion under Notice 2014-7 can change this math, since payments excluded from gross income may not count as earned income for SSI, though Social Security applies its own analysis. For Social Security Disability Insurance, the 2026 substantial gainful activity threshold is $1,690 per month, and consistently earning above that can end disability benefits.⁷ If you receive SSI or SSDI, talk to your local Social Security office before starting CDPAP work so you know exactly what your benefits will look like once wages begin.

How You Actually Get Paid

New York’s 2024–25 state budget consolidated CDPAP payroll and administrative work under a single statewide fiscal intermediary, Public Partnerships LLC (PPL). Consumers and personal assistants had to register with PPL as the transition took effect on April 1, 2025.⁵ PPL now handles wages, tax withholding, workers’ compensation, and employment records for every CDPAP caregiver in the state.

Enrollment as a personal assistant looks like a standard hiring process: a W-4 for tax withholding, an I-9 to verify work eligibility, and related employment paperwork. The consumer must be enrolled in Medicaid, approved for CDPAP through the state’s assessment process, and registered with PPL before the caregiver can be added. Once the caregiver is set up, hours are logged through PPL’s electronic timesheet system, and PPL issues the paychecks.

1
NY.Gov. New York State’s Minimum Wage
2
New York State Department of Health. 1/1/2025 CDPAP Rates
3
New York State Department of Labor. Home Health Care Aides and Wage Parity
4
eCFR. 29 CFR 552.102 – Live-in Domestic Service Employees
5
New York State Department of Health. Consumer Directed Personal Assistance Program (CDPAP)
6
Internal Revenue Service. Certain Medicaid Waiver Payments May Be Excludable From Income
7
Social Security Administration. What’s New in 2026?