How to Get Paid as a Family Caregiver in North Carolina

You can get paid to care for a family member in North Carolina through one of four main routes: the state’s Medicaid Community Alternatives Programs, Veterans Affairs benefits if the person you care for is an eligible veteran, a private personal care contract funded by the care recipient, or a long-term care insurance policy that permits family compensation. Which door opens for you depends on the care recipient’s eligibility, your relationship to them, and how much daily help they need. Learning how to get paid as a family caregiver in North Carolina starts with knowing which of these programs you qualify for, because the rules and pay differ sharply between them.

NC Medicaid Community Alternatives Programs

The most common path runs through North Carolina’s Community Alternatives Programs, Medicaid home and community-based services waivers that let the care recipient hire and direct their own caregivers, including relatives. Two waivers cover most families.

CAP/DA for Adults

The Community Alternatives Program for Disabled Adults covers adults 18 and older with a physical or mental disability, and anyone over 65, who meet a nursing facility level of care.¹ It’s designed as an alternative to nursing home placement. A family caregiver can be paid to provide personal care, in-home aide services, and respite care.

Financial eligibility runs through long-term care Medicaid, with a countable resource limit generally set at $2,000 for an individual.² Applications go through your county Department of Social Services.

CAP/C for Children

The Community Alternatives Program for Children serves medically fragile children from birth through age 20 who need a hospital or nursing facility level of care.³ The child must be enrolled in NC Medicaid Direct and qualify under Medicaid Assistance for the Blind or Medicaid Assistance for the Disabled.⁴ Parents interested in becoming paid employees under the consumer-directed option coordinate the transition with a CAP case manager, generally around the annual reassessment.⁵

One useful thing about CAP: under consumer-directed services, family members who aren’t legally responsible for the recipient don’t need a CNA certification to provide paid care.⁵ An adult child caring for a parent has a fairly direct path.

The Spouse and Parent Rule Most Families Hit

Spouses caring for spouses and parents caring for their own minor children face extra hurdles. NC Medicaid calls these caregivers “legally responsible persons,” and an LRP can be paid through CAP only when three conditions are all met:

The beneficiary’s need for help with bathing, dressing, toileting, moving, and eating is rated extensive to maximum.
At least one qualifying extraordinary circumstance applies, such as no other qualified caregiver being available in the area.
The LRP passes hiring requirements, including criminal and health registry background checks.⁶

Adult children, siblings, grandchildren, and in-laws don’t face those thresholds.

Structured Family Caregiving

Both CAP waivers may include Structured Family Caregiving. Under SFC, Medicaid pays a daily stipend to a provider agency, and a percentage of that stipend, generally 50% to 65%, passes through to the family caregiver. The caregiver has to live with the care recipient and provide hands-on help with daily activities. Spouses and other relatives can participate. SFC is administered by contracted agencies rather than county DSS, so ask your CAP case manager for a referral if this option interests you.

Veterans Affairs Programs

If your family member is an eligible veteran, three federal VA programs can pay family caregivers. They’re available anywhere in North Carolina.

Program of Comprehensive Assistance for Family Caregivers

The PCAFC pays a monthly stipend, plus education, mental health counseling, and travel benefits, to family caregivers of veterans with a combined VA disability rating of 70% or higher who need personal care services for at least one activity of daily living such as bathing, dressing, toileting, feeding, or mobility.⁷⁸

The stipend is calculated from the federal GS-4, Step 1 salary in the veteran’s locality. The VA places caregivers in one of two tiers. Level 1 uses a 0.625 multiplier on the annual salary divided by twelve. Level 2, for veterans who are “unable to self-sustain in the community” and need help with three or more ADLs, uses a full 1.00 multiplier.⁸ For 2026, the base GS-4, Step 1 salary is $31,103 per year before locality pay, which meaningfully increases the figure in most parts of the country.⁹ Apply through a VA Caregiver Support Coordinator or by submitting VA Form 10-10CG.

Aid and Attendance

Aid and Attendance is an increased pension for wartime veterans and surviving spouses who need help with daily activities, are bedridden, or have severely limited eyesight.¹⁰ The maximum annual rate is $29,093 for a veteran with no dependents and $34,488 for a veteran with one dependent, reduced by the veteran’s countable income.¹¹ Payments go to the veteran, not the caregiver, but there’s no restriction on using the funds to compensate a relative. That flexibility is the appeal.

Veteran-Directed Care

Veteran-Directed Care gives an eligible veteran a budget to manage their own home and community-based services, hiring workers who can include family members or neighbors.¹² Availability depends on the local VA medical center.

Private Pay With a Personal Care Contract

Families who don’t qualify for Medicaid or VA programs can still set up paid caregiving through a written personal care contract. The document should spell out services, schedule, and rate. Pricing at or near the market rate for professional home care in your area matters for two reasons: it shows the payment is compensation rather than a disguised gift, and it protects the care recipient’s future Medicaid eligibility.

That second reason is where families get hurt. Federal law imposes a 60-month lookback when someone applies for Medicaid long-term care. If Medicaid finds assets were transferred for less than fair market value within those five years, the applicant is hit with a penalty period calculated by dividing the transferred amount by the state’s average monthly nursing facility cost.¹³ Paying a relative above market, or paying without a written contract, can trigger this. Keep detailed records of hours worked and payments made.

Long-Term Care Insurance

Some private long-term care policies pay when the insured needs help with two or more of six activities of daily living or has a cognitive impairment, verified by an insurer-arranged assessment.¹⁴ Whether the policy will pay a family member depends on its exact terms. Some allow it; some require a licensed provider. Read the policy or call the insurer before counting on it.

Taxes on Caregiver Pay

Getting paid changes your tax picture, and the rules turn on where the money comes from.

Medicaid Waiver Payments

Under IRS Notice 2014-7, certain Medicaid waiver payments for home and community-based services can be excluded from the caregiver’s gross income. The care has to be provided in the caregiver’s own home, meaning the place where the caregiver actually lives and shares everyday life like meals and holidays. If you keep a separate residence where your personal life happens, the exclusion doesn’t apply even if you spend most nights at the recipient’s house. Respite arrangements without shared living also don’t qualify. Direct payments from the care recipient’s private funds are outside the exclusion even when the program-administered payments are inside it.¹⁵

Household Employee Rules

When a care recipient pays a family caregiver directly, whether from private funds, VA payments, or insurance, the caregiver is generally a household employee rather than an independent contractor, because the work happens in the recipient’s home under the recipient’s direction.¹⁶ For 2026, if cash wages reach $3,000, Social Security and Medicare taxes apply at 7.65% each on the employer and employee side.¹⁷

An important family exemption cuts through much of that. Wages paid to your spouse, your child under 21, or your parent are not subject to Social Security and Medicare taxes regardless of the amount, outside a narrow exception for a parent caring for a grandchild under 18 in a widowed or divorced parent’s home.¹⁷ Spouses paying spouses and adult children paid by their parents typically avoid those payroll taxes.

Where to Start

For CAP/DA or CAP/C, call your county Department of Social Services. They arrange the clinical assessment that decides whether the care recipient meets a nursing facility level of care and run the financial screening. Have medical records, documentation of daily care needs, bank statements, and income verification ready. Processing times and waiting lists vary by county.

For VA programs, call the VA Caregiver Support Line at 1-855-260-3274 or contact a Caregiver Support Coordinator at the nearest VA medical center. PCAFC uses VA Form 10-10CG, which can be submitted through VA.gov. Aid and Attendance requires a separate pension application. Veteran-Directed Care enrollment runs through the local VA medical center’s geriatrics or extended care team.

For a private arrangement, put the personal care contract in place before any money moves. Describe the services, the schedule, the rate, and the payment method, and keep a running log of hours worked and payments made. Those records are what protect the care recipient’s Medicaid eligibility if long-term care benefits are needed later.¹³

1
NC Medicaid. Community Alternatives Program for Disabled Adults (CAP/DA)
2
NC Medicaid. Medicaid Community Alternatives Program Clinical Coverage Policy No 3K-2 For Disabled Adults (CAP/DA)
3
NC Medicaid. Community Alternatives Program for Children (CAP/C)
4
NC Medicaid. Community Alternatives Program for Children (CAP/C)
5
NC Medicaid. CAP Consumer-Directed Services Frequently Asked Questions
6
NC Medicaid. Fact Sheet Legally Responsible Person as the Paid Worker for Community Alternatives Program Participants
7
Veterans Affairs. Program of Comprehensive Assistance for Family Caregivers
8
VA Caregiver Support Program. PCAFC Eligibility Criteria Fact Sheet
9
Office of Personnel Management. Salary Table 2026-GS
10
Veterans Affairs. VA Aid and Attendance Benefits and Housebound Allowance
11
Veterans Affairs. Current Pension Rates For Veterans
12
Veterans Affairs. Veteran-Directed Care
13
Office of the Law Revision Counsel. 42 U.S. Code 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets
14
ACL Administration for Community Living. Receiving Long-Term Care Insurance Benefits
15
Internal Revenue Service. Certain Medicaid Waiver Payments May Be Excludable From Income
16
Internal Revenue Service. Family Caregivers and Self-Employment Tax
17
Internal Revenue Service. Publication 926 (2026), Household Employer’s Tax Guide