How to Get Paid as a Family Caregiver in Kentucky

If you want to become a paid family caregiver in Kentucky, the state has real, legitimate ways to make it happen. Kentucky pays family members to provide in-home care through a self-directed Medicaid option called Participant Directed Services. Under PDS, the person receiving waiver care becomes the employer: they hire, schedule, and manage their own workers, and a family member can be one of them, on conditions that depend on the relationship and the waiver.1,2

The rule that surprises most families is the one about spouses, and it is more open than it is usually described. A spouse is a "legally responsible individual" (LRI), as is the parent of a minor child, and an LRI is paid only for care that counts as extraordinary, never for help they are already obliged to give. That is a condition, not a ban: Kentucky can pay a spouse when one of three circumstances is verified and the department approves.1,2

The Short Version

If you are an adult child, sibling, other relative, friend, or neighbor of a Kentucky Medicaid waiver participant, the most direct route is to be hired as their PDS worker; on the HCB and SCL waivers, a close relative needs state approval first.2,1

If you are a spouse, PDS is open to you through the extraordinary-care route, if one of the three circumstances below is verified and the department approves. Build that case with the case manager before counting on the income.1

If your loved one is a veteran, check the VA programs first. The VA caregiver stipend can pay a spouse, and the caregiver does not have to be related to the veteran if they live full time with them.4

If your family has enough private assets, a written personal services contract can pay a caregiver now, and Kentucky's 60-month look-back makes the contract format matter.5

What Makes Kentucky Different: Participant Directed Services

Kentucky delivers most of its paid in-home family care through Participant Directed Services, the self-direction option inside the state's Medicaid 1915(c) waivers. The Department for Aging and Independent Living (DAIL) is the contact for PDS policy questions, and it issues the PDS FAQ jointly with the Department for Medicaid Services (DMS). The participant runs the show: they choose, hire, schedule, and supervise their own workers for non-medical, non-residential waiver services, and family members can be hired on the conditions set out below.1

PDS is available across Kentucky's waivers: the Home and Community Based (HCB) waiver for older adults and people with physical disabilities,6 the Supports for Community Living (SCL) and Michelle P. (MPW) waivers for people with intellectual or developmental disabilities,6 and the Acquired Brain Injury (ABI and ABI-LTC) waivers. PDS is a way to receive waiver services, not a way onto a waiver, and all five waivers have a waiting list. On the HCB waiver, placement is set by the date your completed application is received, so apply early.1

The Kentucky Paid Family Caregiver Pathways

1. Participant Directed Services (PDS): The Main Medicaid Route

Who pays: Kentucky Medicaid, through the participant's 1915(c) waiver.

Who skips the LRI review: An adult child, sibling, other relative, friend, or neighbor, since none is a legally responsible individual. Each waiver's own conditions for family members, below, still apply.1

Who can be paid only for extraordinary care: A legally responsible individual: the spouse or guardian of an adult participant, or the parent or guardian of a participant under 18. Per CMS an LRI is paid only for extraordinary care, never for supports they are ordinarily obligated to provide. Kentucky opens that payment to a spouse if one of three circumstances is verified: caregiving has reduced or ended the spouse's ability to hold paid employment in the past twelve months and no other caregiver in the home can functionally provide the care; the spouse tried in the first thirty days to recruit a qualified provider, both traditional and PDS, and was unable to secure another provider or enough coverage for all care; or the participant has a communication barrier affecting their ability to communicate needs to a provider.1

Under the Supports for Community Living (SCL) waiver, 907 KAR 12:010 first requires that the service itself allow a relative provider; participant-directed goods and services, for one, are closed to family members, guardians, and spouses outright. It also adds conditions and a MAP-532 form, and 907 KAR 12:020 caps a legally responsible individual or immediate family member at forty hours of paid PDS a week. A relative who takes the representative role gives up the wage. Those are SCL rules only.7

Under the Home and Community Based (HCB) waiver, 907 KAR 7:010 lets an immediate family member (a spouse, child, parent, sibling, or grandchild, among others), guardian, or legally responsible individual be paid only through PDS and only with the department's written approval. Conditions include a request form, unique abilities to meet the participant's needs, training or experience beyond caring for them, and either no provider within thirty miles or none who can meet the care plan or schedule. A spouse must also meet one of the three circumstances above, and a PDS worker is capped at forty hours a week.2

What it covers: Non-medical, non-residential waiver services that the participant would otherwise receive through a traditional provider agency.1

Eligibility, recipient: Kentucky Medicaid eligibility plus enrollment in a waiver that offers PDS (HCB, SCL, Michelle P., ABI, or ABI-LTC).1

Eligibility, caregiver: Complete the required background checks, screenings, and trainings before starting work (see step 5 below), with fees paid by the participant as employer of record.3

How you get paid: The participant is your employer of record and authorizes that services were performed to their satisfaction. Your wages are billed through the FMS agency, which adds the employer taxes as a percentage, typically around 11.30%, as timesheets are submitted.3

How much you're paid: The participant's authorization, renewable annually, covers both wages and employer taxes, so a tax-rate change shifts the dollars left for wages.3 Services delivered through PDS are included in the 21% legislature-directed rate increase. The participant can request a raise for an employee, starting with their case manager, as long as pay does not exceed the maximum allowable rates in the Home and Community Based Services Waiver Rates schedule on the DMS Fee and Rate Schedule page, which now lists a 2025 edition.8

Best for: A relative, friend, or neighbor of a Kentucky waiver participant who can meet the waiver's hiring conditions, and a spouse who can document one of the three extraordinary-care circumstances.

2. VA Program of Comprehensive Assistance for Family Caregivers (PCAFC)

Who can be paid: A designated Primary Family Caregiver of an eligible veteran. The caregiver must be at least 18, and either a spouse, son, daughter, parent, stepfamily member, or extended family member of the veteran, or someone who lives full time with the veteran (or is willing to if VA designates them). Those are alternatives, so an unmarried partner, friend, or neighbor who lives full time with the veteran can qualify.4

2026 stipend: The PCAFC stipend starts from the federal General Schedule GS-4, Step 1 annual rate for the locality where the veteran lives, divided by 12. That monthly figure is then multiplied by a factor set in 38 CFR 71.40(c)(4)(i). The factor is not a single figure, and which one applies depends on whether the veteran is in the current program or is a legacy participant or legacy applicant:4

• Current program (the veteran meets 38 CFR 71.20(a)): the factor is 0.625, or 1.00 if VA determines the veteran is "unable to self-sustain in the community."
• Legacy participant or legacy applicant (38 CFR 71.20(b) or (c)): the factor is set instead by the sum of the veteran's 2019 clinical ratings, at 1.00 for a sum of 21 or higher, 0.625 for 13 to 20, and 0.25 for 1 to 12.

If the veteran meets both sets of requirements, VA pays whichever of the two amounts is higher. A legacy participant's stipend also cannot fall below what the caregiver was eligible to receive the day before October 1, 2020, as long as the veteran remains at the address on record. The legacy schedule is time-limited: it runs for eight years from October 1, 2020 and lapses October 1, 2028. If your household joined PCAFC before October 2020, ask which paragraph VA is paying you under. Confirm your exact stipend with your VA Caregiver Support Coordinator.4

Veteran eligibility: VA lists four requirements that must all be true: a VA disability rating (individual or combined) of 70 percent or higher; discharge from the military, or a date of medical discharge; a need for at least 6 months of continuous, in-person personal care services; and enrollment in VA health care. Those are a first screen, not the decision. You and the veteran apply together, and VA's application process decides eligibility.4

How the stipend is paid: VA states that "You must be enrolled in direct deposit using the VA customer engagement portal to get your monthly stipend."4

Best for: Families of an eligible veteran where one person provides substantial daily care.

3. VA Veteran-Directed Care (VDC)

Who can be paid: The workers the veteran chooses, which VA says might include their own family member or neighbor.9 Ask the VA whether a spouse can be paid before you count on it.

How it works: Veteran-Directed Care is a VA program, run with the Administration for Community Living, for veterans of all ages at risk of nursing home placement. The veteran is given a budget for services, managed by the veteran or their representative, and with a counselor's help hires their own workers. Through an options counselor, the Aging and Disability Network Agency arranges fiscal management services and provides ongoing counseling and support.9

Availability: ACL's directory lists Kentucky agencies approved as VDC providers under the Huntington, Lexington, and Louisville VA medical centers, including the Pennyrile, Bluegrass, and Lake Cumberland Area Agencies on Aging, LifeSpan Resources, and the Kentucky River, Barren River, Buffalo Trace, Gateway, Lincoln Trail, and Kentuckiana districts. Some subcontract under another agency's Veteran Care Agreement. A listing does not by itself make VDC reachable: VA says enrolled veterans are eligible if they are eligible for community care, meet the clinical criteria, and the service is available, and that "Services may vary by location." Ask your VA social worker whether it is available where the veteran lives.9

Best for: A Kentucky veteran at risk of nursing home placement who wants to manage a care budget and hire their own workers.

4. VA Aid and Attendance Pension

Who is paid: The veteran or surviving spouse receives the pension directly.10 Any pay to a family caregiver is a private arrangement with the veteran.

2026 maximums (effective December 1, 2025 through November 30, 2026): the VA sets these as maximum annual pension rates (MAPR), a ceiling rather than a payment. The monthly payment is the MAPR minus countable income, divided by 12 and rounded down to the whole dollar. A veteran with no dependents with Aid and Attendance receives up to $29,093 per year; a veteran with one dependent up to $34,488 per year. Confirm current figures on the VA pension rate page before applying.10

Eligibility: The claimant must meet VA's pension service rules and qualify for Aid and Attendance. Net worth must also be under the limit, $163,699 from December 1, 2025 to November 30, 2026, and the calculation includes the claimant's and dependents' assets and income for VA purposes.10

How caregivers get paid: The pension goes to the veteran, who then pays the family caregiver, ideally under a written caregiver agreement. The Kentucky Department of Veterans Affairs (KDVA) helps veterans and their families file pension claims free of charge, and warns veterans to beware anyone asking for money for claims help.11

Best for: A veteran or surviving spouse who qualifies for Aid and Attendance and is under VA's net worth limit.

5. Private Personal Services Contract

Who can be paid: A family member, including an adult child, sibling, or other relative, under a written contract. Spouses should ask a Kentucky elder-law attorney whether this adds anything to Participant Directed Services above.

What it is: A written, arm's-length contract between the care recipient (or their legal representative) and the caregiver, signed before care begins. It should spell out the services, the schedule, a reasonable hourly rate documented against local agency quotes, how the caregiver is paid, and daily care logs.

Why the format matters: Kentucky Medicaid applies the federal five-year (60-month) look-back. A person who needs long-term services and supports "will be denied LTSS coverage if they have transferred assets for less than fair market value during the five-year period preceding their Medicaid application." DMS sets the transfer-penalty divisor, so confirm the current figure with DMS or a Kentucky elder-law attorney.5 An elder-law attorney can explain how a written contract signed before care begins may help document what the parent received for the money.

One exception matters to caregiving children. Federal law does not penalize transferring the home to a son or daughter who lived in it for at least two years immediately before the parent entered an institution and who, as the state determines, provided care that let the parent stay home. All three conditions apply; the exception is not automatic.5

Best for: Families with enough assets to private-pay a caregiver who also want to preserve eligibility for future Medicaid planning.

Comparing the Kentucky Pathways

How to Choose a Kentucky Paid Family Caregiver Pathway

Start with the care recipient's situation:

1. Is your loved one a veteran? Check the VA pathways first. PCAFC can pay a spouse a monthly stipend.4 Veteran-Directed Care gives the veteran a budget to hire their own workers, where it is available.9 Aid and Attendance is a pension paid to the veteran or surviving spouse.10 The Kentucky Department of Veterans Affairs helps file VA claims free of charge.11
2. Are you a spouse? PDS can pay you through the extraordinary-care route once the department approves, so ask the case manager which of the three circumstances you can evidence and start documenting it. If your loved one is a veteran, check PCAFC too, since it pays a spouse without that test.1
3. Are you a non-spouse relative or friend, and is your loved one a Medicaid waiver participant? Ask their case manager about Participant Directed Services and getting hired as their worker.
4. Is your loved one not yet on a waiver? Ask DAIL or DMS which waiver fits, and apply early.
5. Do you have substantial private assets and want to plan ahead? Talk to a Kentucky elder-law attorney about a personal services contract.

How to Apply for Participant Directed Services in Kentucky

Tax Considerations

How caregiver pay is taxed depends on the program, with one valuable federal rule for live-in caregivers. Ask a tax preparer how to report any of it.

• Participant Directed Services wages are billed through the FMS agency, which adds the employer taxes.3
• VA PCAFC pays the Primary Family Caregiver a monthly stipend by direct deposit.4
• VA Aid and Attendance is a pension paid to the veteran or surviving spouse.10 Pay passed on to a caregiver is a private arrangement.
• Personal services contract pay is a private arrangement too.

IRS Notice 2014-7: Medicaid waiver pay for personal care of someone who lives in your home may be excluded from your federal gross income. A caregiver who keeps a separate home of their own may not exclude it.13 Whether that exclusion also keeps the pay out of Kentucky income is not settled by any source we have found. Kentucky's income tax law is based on the Internal Revenue Code in effect as of December 31, 2024, so confirm the Kentucky treatment with a tax preparer before filing.5

Kentucky state income tax: Kentucky has a flat individual income tax, and the Department of Revenue's 2026 withholding formula sets the rate at "3.5% of taxable income." The department's undated income tax page still says four percent; for tax year 2026, the dated 2026 document governs.5

Common Misconceptions

"If Mom has Medicare, I can get paid through Medicare." Original Medicare does not pay for non-skilled help with bathing, dressing, and other daily activities when that is the only care needed, outside hospice. It covers skilled care instead.14 Paid family caregiving in Kentucky comes through Medicaid waivers (PDS), the VA, or a private contract.

"I can just start getting paid out of Dad's account." Be careful. Kentucky Medicaid looks back five years, and a transfer of assets for less than fair market value in that window can lead to denial of long-term care coverage.5 Ask an elder-law attorney whether a written personal services contract, signed before care begins, fits your family.

Where to Get Help in Kentucky

Related Terms

• Consumer Directed Services (CDS): The national term for self-directed programs like Kentucky's Participant Directed Services, where the care recipient directs their own worker.
• HCBS waiver: The federal authority behind Kentucky's HCB, SCL, Michelle P., and ABI waivers, the programs that carry PDS.1
• Activities of Daily Living (ADLs): Everyday self-care tasks such as bathing, dressing, and eating.

Learn More

Find personalized help getting paid as a family caregiver in Kentucky at brevy.com.

The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.