How to Apply for Paid Caregiver Benefits in Texas

To get paid as a family caregiver in Texas, you apply through the Health and Human Services Commission (HHSC) for a Medicaid long-term care program, choose the Consumer Directed Services (CDS) option so the person receiving care can hire you directly, and clear both a financial review and an in-home functional assessment. That is the short version of how to apply for paid caregiver benefits in Texas. The longer version involves picking the right program, meeting the 2026 income cap of $2,982 per month and the $2,000 asset limit, and gathering the paperwork that lets HHSC verify eligibility within its 45- or 90-day processing window.

Pick the Right Program First

Texas runs several Medicaid programs that cover in-home care, and each targets a different population. You need to know which one fits before filling out anything.

  • STAR+PLUS is the primary Medicaid managed care program for adults with disabilities or people 65 and older. It bundles medical care with long-term services so participants can stay home instead of moving to a facility.1Texas Health and Human Services. STAR+PLUS
  • Community First Choice (CFC) provides attendant care and habilitation for people who meet an institutional level of care but want to stay in the community.2Texas Health and Human Services. Community First Choice
  • Medically Dependent Children Program (MDCP) covers children under 21 who need nursing-facility-level care but whose families want to keep them at home.3Cornell Law School. Texas Administrative Code 1-353.1155

Across these programs, participants can choose the Consumer Directed Services option. CDS lets the person receiving care hire their own caregiver, including a family member or friend, and direct how care is delivered. The care recipient acts as the employer, deciding who to hire, what hours they work, and how tasks get done.4Justia Law. Texas Government Code 531.051 A Financial Management Services Agency (FMSA) handles the payroll mechanics and tax filings so neither side has to navigate employer taxes alone.

Get on the Interest List Before Anything Else

MDCP and the Community Living Assistance and Support Services (CLASS) program both maintain interest lists that function as waiting lists, and waits of several years are common. Call HHSC’s interest list line at 1-877-438-5658 to add your name as soon as you know care will be needed, even before you have fully sorted out which program fits. Signing up costs nothing and preserves your place.

Income and Asset Limits for 2026

Texas is an “income cap state,” meaning your countable monthly income must fall at or below a hard cutoff to qualify for Medicaid long-term care services. For 2026, that cutoff is $2,982 per month for an individual and $5,964 for a couple. The figure comes from multiplying the federal SSI benefit rate ($994 per month in 2026) by three.5Cornell Law School Legal Information Institute. Texas Administrative Code 1-358.4336Social Security Administration. SSI Federal Payment Amounts for 2026

On the asset side, an individual applicant can hold no more than $2,000 in countable resources. Not everything counts. The primary home is generally exempt as long as the applicant intends to return to it, and certain other assets like one vehicle and burial funds are excluded. When one spouse applies for long-term care services and the other remains in the community, the non-applicant spouse can keep between $32,532 and $162,660 in assets under the Spousal Protected Resource Amount for 2026.7Texas Health and Human Services. MEPD and TW Bulletin 25-24

Qualified Income Trust for Over-Income Applicants

If the care recipient’s monthly income exceeds $2,982 but falls below the private-pay cost of nursing home care ($262.37 per day in Texas as of late 2025), a Qualified Income Trust, sometimes called a Miller Trust, can bridge the gap.8Texas Health and Human Services. Appendix XXXVI, QITs and MEPD Information The trust works by diverting the applicant’s income into a special bank account. Once income flows through the trust, HHSC no longer counts it toward the eligibility cap.

Only income goes into a QIT. You cannot deposit savings, investments, or other assets. Social Security checks and pension payments are the most common deposits. All income from a given source must go into the trust; you cannot split a single income stream between personal accounts and the QIT. Setting one up usually requires an attorney, and the trust must name the state of Texas as the remainder beneficiary, meaning any funds left at death reimburse Medicaid. Skipping this step or funding the trust inconsistently is one of the most common reasons over-income applications get denied.

The Five-Year Look-Back

HHSC reviews all asset transfers made during the 60 months before the application date. If you gave away money, sold property below market value, or transferred assets to family members inside that window, the state imposes a penalty period during which no benefits are paid.9Texas Health and Human Services. I-2100, Look-Back Policy The penalty length is calculated by dividing the total uncompensated value of the transfers by $262.37, the current average daily cost of a private-pay nursing facility stay in Texas.10Texas Health and Human Services. I-5100, Transfer of Assets Divisor A $26,237 gift, for example, would trigger a 100-day penalty period.

If you are reading this because a family member needs help now, do not attempt last-minute asset transfers. That almost always makes things worse.

Documents to Gather Before You Apply

Pulling paperwork together before you start prevents the back-and-forth requests that stretch processing times. HHSC typically wants:

  • Proof of Texas residency, such as a driver’s license, utility bill, or voter registration card.
  • Social Security numbers for the applicant and all household members.
  • Income documentation: recent pay stubs, Social Security award letters, pension statements. HHSC cross-checks against the federal Income and Eligibility Verification System.
  • Bank and financial statements for checking, savings, investment accounts, and CDs, usually covering the most recent few months.
  • Asset records: property deeds, vehicle titles, life insurance policies.
  • Health insurance information, including Medicare cards and any private coverage.
  • Medical records or physician statements documenting functional limitations with daily activities like bathing, dressing, eating, and medication management.

For an MDCP application, add documentation of the child’s diagnosis and parental income. For a QIT, bring the trust document and proof it has been properly funded.

One detail worth using: Texas Medicaid can provide retroactive coverage for up to three months before the month you apply, if the applicant was eligible during those prior months and had unpaid or reimbursable medical expenses.11Texas Health and Human Services. A-4300, Retroactive Coverage Include those bills with your application.

Filing Form H1200

The application itself is Form H1200, Application for Assistance.12Texas Health and Human Services. Form H1200 It collects household composition, monthly income and expenses, and medical history. If you want the care recipient to hire their own caregiver through CDS, mark that preference in the sections covering long-term care and community-based services. Missing that box does not permanently lock you out of CDS, but fixing it later adds processing time.

The income sections require translating your documents into specific fields for earned wages and unearned income like Social Security, pensions, and investment returns. HHSC runs these entries against IRS and Social Security Administration data, so the numbers need to be accurate.13Your Texas Benefits. Application for Benefits H1200 You sign under penalty of perjury. If the applicant is already enrolled in a Medicaid program and just needs to add long-term care services, supplemental forms may replace a full new H1200.

You can submit online through YourTexasBenefits.com, by mail to the HHSC processing center listed on the form instructions, or in person at a local eligibility office. Keep copies of everything you send.

The In-Home Functional Assessment

After HHSC verifies your financial information, a caseworker schedules a functional assessment, usually conducted at the applicant’s home. This assessment determines whether the care recipient meets the medical necessity threshold and, if approved, how many hours of care the state will authorize.14Texas Health and Human Services. 2400, Assessment Process

The caseworker uses Form 2060, the Needs Assessment Questionnaire and Task and Hour Guide, scoring each daily activity from 0 (no impairment) to 3 (total impairment). Bathing, dressing, meal preparation, mobility, medication management, medical conditions, mental clarity, and home environment all factor in.

Be honest, not stoic. Families often downplay limitations because they are used to compensating for them. If your mother needs help getting dressed every morning, say so clearly. If your father cannot safely prepare meals without supervision, describe what happens when he tries. The caseworker’s score drives how many care hours are authorized. Underreporting means fewer paid hours.

How Long the Decision Takes

HHSC has two processing deadlines. For applicants 65 and older, or those whose disability has already been established through Social Security, the state must decide within 45 days. For applicants who need a disability determination from the HHSC Disability Determination Unit, the timeline extends to 90 days.15Texas Health and Human Services. B-6400, Processing Deadlines

If HHSC requests more information, you have to move fast. Missing documents must be submitted by the 39th day for standard cases or the 84th day for cases requiring disability determination. Miss those deadlines and HHSC can deny the application for lack of information rather than lack of eligibility. The written decision arrives by mail or through your YourTexasBenefits.com account.

What Trips Applications Up

Most denials come from preventable errors, not real ineligibility.

  • Incomplete documentation. HHSC’s response clock starts when its request letter is mailed, not when you receive it.
  • Assets above the limit on the wrong day. Some families spend down on exempt items like prepaid funeral expenses or home repairs before applying.
  • Applying too early, before the spend-down is complete. HHSC evaluates finances as of the application date.
  • QIT problems: no trust set up, inconsistent funding, or the wrong income deposited.
  • Look-back violations. Even transferring a car title to a grandchild inside the five-year window counts.
  • Applying too late. Retroactive coverage only reaches back three months.

Appealing a Denial

If HHSC denies the application or authorizes fewer hours than expected, you can request a fair hearing within 90 calendar days of the action you want to challenge.16Texas Health and Human Services. 2900, Appeals and Fair Hearings File by returning Form 2065-A (included with your denial notice), by letter, or verbally.

Timing matters. If you request the hearing before the effective date shown on the denial notice, existing services continue at the current level until the hearings officer decides. Wait until after that date and services stop during the appeal. For someone who depends on daily caregiver assistance, that gap can be devastating. The exception is terminations based on health and safety threats, where services do not continue regardless of appeal timing.

For the hearing, bring updated medical records, physician letters describing functional limitations, corrected financial statements, or evidence that HHSC made a factual error. A hearings officer reviews the evidence and issues a written decision. Further administrative or judicial review may follow.

After Approval: Hiring, Pay, and the FMSA

Once HHSC authorizes a specific number of care hours, the care recipient chooses a Financial Management Services Agency. The FMSA handles payroll processing, tax filings, and tracking expenses against the authorized service budget. It is the back-office infrastructure that lets a family member get paid without becoming a payroll expert overnight.

The care recipient then hires the caregiver, sets the schedule, and directs how care is provided. Under the 2026–27 General Appropriations Act, attendant reimbursement rates in Texas are set to support an average wage of about $13 per hour. The exact rate depends on the specific program and the authorized service budget.

Taxes for a Paid Family Caregiver

When a family member gets paid through CDS, someone becomes a household employer for IRS purposes. The FMSA carries much of the load, but the tax picture matters because errors create personal liability.

If you pay a household caregiver $3,000 or more in cash wages during 2026, Social Security and Medicare (FICA) taxes apply at a combined 15.3%, split evenly between employer and employee at 7.65% each. The Social Security portion applies to the first $184,500 in wages; Medicare has no cap. Wages above $200,000 in a calendar year carry an additional 0.9% Medicare tax paid entirely by the employee.17Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide

Federal unemployment tax (FUTA) applies if you pay $1,000 or more in total cash wages to household employees in any calendar quarter, at an effective rate of 0.6% on the first $7,000 of each employee’s wages, paid entirely from your own funds. Federal income tax withholding is not required for household employees but can be arranged voluntarily with a W-4. Household employment taxes are reported on Schedule H, attached to the personal Form 1040. A W-2 goes to any caregiver who earned $3,000 or more or from whom income tax was withheld. Both the W-2 to the employee and Copy A to the Social Security Administration are due by February 1, 2027 for the 2026 tax year, and Schedule H is due with the tax return by April 15, 2027.17Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide

The Live-In Caregiver Tax Exclusion

Under IRS Notice 2014-7, Medicaid waiver payments received by a caregiver who lives in the same home as the person they care for can be excluded from gross income as “difficulty of care” payments.18Internal Revenue Service. Notice 2014-7 The exclusion applies whether the caregiver is a family member or not. Payments for care provided outside the caregiver’s own home do not qualify. If a parent moves in with an adult child who then serves as the paid caregiver, those payments may be excludable. If the caregiver drives to the parent’s house each day, they are not.

The distinction hinges on where the care recipient lives relative to the caregiver’s home. This one detail can mean thousands of dollars in annual tax savings, so confirm your living arrangement with a tax professional before filing.

Renewing Every Year

Medicaid eligibility is not permanent. Federal rules require states to renew each beneficiary’s eligibility every 12 months.19eCFR. 42 CFR 435.916 HHSC sends renewal paperwork before the eligibility period expires. Miss the response deadline and benefits lapse, which means the caregiver stops getting paid and the care recipient loses authorized services until renewal is processed.

At renewal, expect to provide updated income and asset documentation, and HHSC may schedule a new functional assessment. Keep financial records organized throughout the year. If circumstances change significantly, such as a new income source, a spouse’s death, or a change in the care recipient’s medical condition, report it to HHSC before renewal rather than waiting. Changes that improve eligibility can sometimes increase authorized care hours, and unreported changes that worsen eligibility can create overpayment issues the state will claw back later.