caregiver/pennsylvania/how-to-get-paid-family-caregiver

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By Brevy Care Team

Pennsylvania has roughly 1.5 million unpaid family caregivers and the third-oldest population in America by share of residents 65+. Their unpaid care is worth between $22 billion and $40 billion a year to the Commonwealth, more than the annual revenue of any single PA-headquartered Fortune 500 company. And yet most of the families calling the PA Link helpline begin the same way: "I need to know if I can get paid to care for my mom." This guide walks through every legitimate 2026 pathway that does pay a family member in Pennsylvania, the surprisingly hard limit that catches most spouses, and how to use the Family Caregiver Support Act (Act 204 of 1990), Pennsylvania's first-in-the-nation caregiver reimbursement program, even when no Medicaid waiver fits. {{/component}}

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Key takeaways before you read further

• Pennsylvania does not pay spouses through Medicaid. Under the Services My Way (SMW) consumer-directed model, the Medicaid pathway most families ask about, spouses, parents of minor children, and other "legally responsible relatives" cannot be hired and paid as Direct Care Workers. Adult children, siblings, in-laws, nieces, nephews, friends, and neighbors can. This is a state policy choice codified through 55 Pa. Code Chapter 52, not a federal one.
• The one PA pathway where a spouse CAN be paid is VA Veteran-Directed Care (VDC) for an eligible veteran enrolled in VA health care. VDC gives the veteran a monthly budget, typically $1,400–$3,000, to hire their own workers, including a spouse.
• PA's Family Caregiver Support Program (FCSP) reimburses caregivers up to $600/month for out-of-pocket caregiving expenses and up to $5,000 lifetime for home modifications and assistive devices, after Act 20 of 2021 raised the caps. The care recipient must be 60+, or any age with a chronic dementia diagnosis, or a related child being raised by a grandparent age 55+.
• Community HealthChoices (CHC) covers 396,112 Pennsylvanians as of November 2025 and is the single largest paid-caregiver vehicle in the state. 88.5% of CHC enrollees are dual-eligible Medicare + Medicaid. Five plans were awarded for the new procurement cycle: AmeriHealth Caritas Vista, PA Health & Wellness, UPMC, Aetna Better Health of Pennsylvania, and Health Partners.
• Pennsylvania's Personal Income Tax does NOT conform to IRC § 131(c). Even when Medicaid waiver "difficulty-of-care" payments are excluded from your federal taxable income under IRS Notice 2014-7, PA still taxes them at the 3.07% flat PIT rate plus local Earned Income Tax. This is the single most expensive misunderstanding for PA-paid family caregivers, and most national articles get it wrong.
• The Family Caregiver Support Act of 1990 (Act 204 of 1990, P.L. 1234) made Pennsylvania the first state in the nation with a state-funded family caregiver support program, predating the federal National Family Caregiver Support Program by a decade. Codified at 62 P.S. §§ 3061–3068 with regulations at 6 Pa. Code Chapter 20.
• Tempus Unlimited Pennsylvania is the statewide Fiscal Management Services vendor for participant-directed services in CHC, and is taking over OBRA Waiver and Act 150 from Public Partnerships LLC during a transition. Tempus runs payroll, withholds taxes, and files W-2s for Direct Care Workers hired under SMW. Tempus PA: 1-844-983-6787. {{/component}}

The 60-second version

If you are an adult child, sibling, niece, nephew, friend, or neighbor of a Pennsylvania adult who needs nursing-facility-level-of-care help at home, the most direct paid path is Services My Way (SMW) inside Community HealthChoices, Pennsylvania's mandatory Medicaid Managed Long-Term Services and Supports (MLTSS) program. Your loved one applies for Medicaid Long-Term Services and Supports through COMPASS, enrolls in CHC, picks a plan, asks the Service Coordinator to set up SMW at the first assessment, and hires you through Tempus Unlimited as a Direct Care Worker.

If you are a spouse, you cannot be paid under SMW, full stop. Pennsylvania's "legally responsible relative" exclusion at 55 Pa. Code Chapter 52 is one of the most restrictive in the country and is the single biggest reason PA families end up disappointed after weeks of paperwork. The two real workarounds are: (1) VA Veteran-Directed Care if your spouse is a VA-enrolled veteran (this is the only PA pathway where a spouse can be paid); and (2) VA's Program of Comprehensive Assistance for Family Caregivers (PCAFC), which pays a monthly stipend to a primary family caregiver, including a spouse, of an eligible veteran with a serious service-connected impairment.

If your loved one is age 60+ or has a chronic dementia diagnosis at any age, you are eligible for the Family Caregiver Support Program (FCSP) through your county Area Agency on Aging, even if no Medicaid pathway fits. FCSP reimburses your out-of-pocket costs up to $600/month at a sliding-scale percentage based on your income, plus $5,000 lifetime for home modifications and assistive devices. It is not a wage. It is reimbursement for what you spend.

If your loved one is a wartime veteran, the Aid & Attendance supplement to VA Pension can put up to $2,424/month for a single veteran or $2,874/month for a married veteran in their pocket, money they can use to pay you privately as their caregiver. Combined with VA VDC or PCAFC, three-figure VA stacks are common in PA.

The details, and the catches, are below.

Pennsylvania pathway map

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Each row is a separate door. Many PA families combine three or four of these (FCSP + VDC + Aid & Attendance is common among veteran-caregiver households). The sections below walk through each pathway in detail, in the order that makes sense for most newly-diagnosed families.

The "legally responsible relative" rule, read this first

Pennsylvania's most consequential caregiver-payment rule is sitting in plain sight inside 55 Pa. Code Chapter 52, the regulation that governs every Office of Long-Term Living home and community-based services program, CHC, OBRA, Act 150, and the legacy waivers that closed at the end of 2019. The rule is short:

A Direct Care Worker is "a person employed for compensation by a provider or participant who provides personal assistance services or respite services." But a Direct Care Worker cannot be:

• A spouse of the participant.
• A parent of a minor-child participant (i.e., the parent of any child under 18 receiving services).
• A legal guardian of the participant.

Adult children of an adult participant, siblings, in-laws, grandparents, grandchildren, nieces, nephews, cousins, friends, neighbors, and unrelated DCWs are all eligible to be hired and paid, provided they pass background and training requirements (see "How to set up Services My Way" below).

This rule is the source of nearly every disappointed call to PA Link from a PA family expecting to be paid as their husband or wife's caregiver. It is also why the comparison table in the PA vs. NY/NJ/OH/MD section below matters so much: New York's CDPAP, Maryland's CFC, and New Jersey's Personal Preference Program all allow spouse-pay; Pennsylvania does not. Aging Our Way, PA, the Pennsylvania Department of Aging's 2024 master plan, flagged the spouse-pay question as a topic for further evaluation, but as of May 2026 no State Plan Amendment, regulation change, or legislation has been adopted to change the rule.

The one Pennsylvania pathway that does pay a spouse is VA Veteran-Directed Care. If your loved one is a VA-enrolled veteran, this is the door to look at first.

Pathway 1, Community HealthChoices Services My Way (SMW)

Community HealthChoices is the single most important program in this guide. It is Pennsylvania's mandatory Medicaid managed long-term services and supports program for adults 21+ who are dual-eligible (Medicare + Medicaid) or have a physical disability and meet a nursing-facility level-of-care standard. CHC enrollment was 396,112 in November 2025, up from 393,887 two months earlier, and 88.5% of those enrollees are dual-eligible with Medicare.

CHC was rolled out in three phases: Phase 1 (Southwest, 14 counties including Allegheny) launched January 1, 2018; Phase 2 (Southeast, 5 counties including Philadelphia) launched January 1, 2019; Phase 3 (Lehigh-Capital, Northwest, Northeast, 48 counties) launched January 1, 2020. After January 1, 2020, CHC has been operational in all 67 PA counties. The legacy 1915(c) waivers, Aging, Attendant Care, Independence, closed December 31, 2019; COMMCARE closed earlier on December 31, 2017.

CHC operates as a concurrent 1915(b) MCO authority + 1915(c) HCBS waiver authority. The PA-specific 1915(c) waiver is PA.0386, with the most recent renewal, PA.0386.R05.00, effective January 1, 2025. The 1915(b) authority is the PA-10 series.

CHC plans, the new five-plan procurement

CHC currently operates with three managed care organizations in all 67 counties:

1. AmeriHealth Caritas Community HealthChoices (Vista Health Plan / Keystone First family).
2. PA Health & Wellness (Centene affiliate).
3. UPMC Community HealthChoices.

In August 2024, the Department of Human Services announced the next CHC procurement awarded five plans for the agreement period beginning January 1, 2025: the three incumbents plus Aetna Better Health of Pennsylvania and Health Partners Plans. Operational rollout by county is staged through 2026, so when you call the PA Independent Enrollment Broker at 1-877-550-4227 to enroll, ask which plans are accepting members in your county that month.

What Services My Way is

Services My Way (SMW) is the participant-directed (consumer-directed) option inside CHC, the OBRA Waiver, and Act 150. It is the PA equivalent of California's IHSS, New York's CDPAP, and Florida's PDO, but with the spouse-exclusion.

Under SMW, the participant, not the CHC managed care plan, not an agency, recruits, hires, trains, schedules, supervises, and (if needed) dismisses their own Direct Care Worker. The DCW is paid through the statewide Fiscal Management Services vendor, Tempus Unlimited Pennsylvania, which performs payroll, withholds taxes (federal income tax, FICA, FUTA, PA Personal Income Tax, local EIT), and files W-2s at year-end. The participant is the common-law employer for IRS and Pa. Department of Labor & Industry purposes; Tempus acts as the IRS § 3504 agent, so the participant generally does not file Schedule H personally, Tempus does it on the participant's behalf.

Who can be hired as a CHC SMW DCW

Per the Services My Way Manual approved by the Department of Human Services and published by Tempus Unlimited, plus 55 Pa. Code Chapter 52:

• A spouse cannot be hired.
• A parent of a minor-child participant cannot be hired.
• A legal guardian cannot be hired.
• An adult child of an adult CHC participant CAN be hired.
• A sibling, in-law, niece, nephew, grandparent, grandchild, friend, or unrelated worker can be hired.
• Live-in caregivers can be paid, and (importantly for federal taxes, see "Tax treatment" below) the participant's home being the DCW's primary residence is what triggers the federal § 131(c) "difficulty-of-care" income exclusion.

What CHC SMW pays

The Office of Long-Term Living publishes the maximum DCW hourly wage rate by county band. Effective January 1, 2026, OLTL increased the W1792 (consumer personal assistance services) and W1792 TU (overtime) fee schedule for the OBRA Waiver and Act 150; the CHC SMW maximum rate moves on a parallel track and is also updated in early-year OLTL bulletins. Industry-wide PA OLTL HCBS rates currently anchor at approximately $20.63/hour for the W1792 service line, split between the DCW's wage, employer FICA, FUTA, SUTA, and Tempus's administrative fee.

Typical 2026 CHC SMW maximum DCW wages by region:

• Region 1 (lower-cost counties): approximately $13–$14/hour.
• Region 2 (higher-cost counties, Philadelphia, Allegheny, Bucks, Chester, Delaware, Montgomery): approximately $15–$16/hour.

Tempus Unlimited publishes the post-April 10, 2026 finalized "Maximum DCW Hourly Wage Rate Sheet" on its PA portal once the supplemental backpay process is complete; verify the exact county rate at Tempus before publication. The Common-Law Employer can set the DCW wage at or below the maximum.

A typical CHC SMW participant authorized for 35 hours/week of personal assistance services at $15/hour generates $525/week, ~$2,275/month, ~$27,300/year in DCW gross wages, a meaningful supplement, not a full-time professional salary.

Speed to first SMW paycheck

From the day a PA family applies for CHC, here is the realistic timeline:

• Days 1–14: PA Independent Enrollment Broker takes the application; CHC level-of-care assessment is scheduled.
• Days 15–30: CHC plan assigns a Service Coordinator who completes the Person-Centered Service Plan and authorizes weekly hours.
• Days 30–45: Participant tells the SC they want SMW; Tempus enrollment paperwork arrives; participant identifies the proposed DCW.
• Days 45–60: DCW completes background checks (PA State Police PATCH, OAPSA clearance, PA Child Abuse Clearance if applicable, FBI fingerprints if PA-resident <2 years), signs employment agreement, completes Tempus orientation.
• Days 60–75: First DCW shifts logged in Sandata (PA's EVV aggregator); first Tempus paycheck arrives 14 days after first time entry.

Total: typically 60–90 days from CHC application to first paycheck for a participant who is straightforwardly eligible. Disability or appeal cases stretch the timeline meaningfully; the Pennsylvania Health Law Project Helpline (1-800-274-3258) is the right call if you encounter denial or delay.

Pathway 2, OBRA Waiver Services My Way (ages 18–59)

The OBRA Waiver is Pennsylvania's HCBS waiver for adults age 18 through 59 with a severe developmental physical disability who meet ICF/ORC level of care. It is governed primarily by 55 Pa. Code Chapter 52 and operated by the Office of Long-Term Living, not the CHC managed care plans.

OBRA participants who choose participant-direction use the same Services My Way model as CHC, same DCW eligibility rules, same legally-responsible-relative exclusion, same county-banded wage table, same EVV requirements. The difference is that the FMS vendor is currently Public Partnerships LLC (PPL), not Tempus, during the OLTL transition. PPL's OLTL number is 1-877-908-1750. PPL is winding down its OLTL book of business as Tempus takes over; verify your participant's current FMS at intake.

OBRA does not have the multi-MCO structure of CHC. Eligibility is determined directly by OLTL's Independent Enrollment Broker process and the relevant county Area Agency on Aging or Office of Vocational Rehabilitation contact. Effective January 1, 2026, OBRA + Act 150 W1792 / W1792 TU fee schedules were raised; the OLTL bulletin notice was published in the Pennsylvania Bulletin Volume 56 in February 2026.

Pathway 3, Act 150 Attendant Care (state-funded)

Act 150 of 1986 created Pennsylvania's state-funded Attendant Care Program, a non-Medicaid attendant-care benefit for adults age 18 through 59 with a severe physical disability who earn too much to qualify for Medicaid HCBS but still need attendant-care help. Act 150 fills the income gap above the OBRA Medicaid LTSS threshold ($2,982/month in 2026 = 300% of the SSI Federal Benefit Rate).

Like OBRA, Act 150 hosts Services My Way and uses the same DCW eligibility rules, including the spouse exclusion. Act 150 participants typically pay a cost-sharing fee based on a sliding scale of income above 200% of the federal poverty level. Apply through the Office of Long-Term Living at 1-800-757-5042.

Pathway 4, Family Caregiver Support Program (FCSP), Act 204 of 1990

This is the section that most Pennsylvania families miss, and it is the most universally accessible program in the entire pathway map. The Pennsylvania Caregiver Support Act, enacted as the Act of December 19, 1990, P.L. 1234, No. 204, made Pennsylvania the first state in the nation to fund a stand-alone family caregiver support program, predating the federal National Family Caregiver Support Program (Older Americans Act Title III-E, enacted in 2000) by a decade.

A note on the act number. Some advocacy materials cite "Act 168 of 1990." That number is incorrect. The PA General Assembly's official enrolled text shows the bill enacted as Act No. 204 (P.L. 1234). Always cite Act 204.

The Act was substantially amended by Act 20 of 2021 (Act of June 11, 2021, P.L. 526, No. 20; House Bill 464), which removed the prior monthly out-of-pocket cap, expanded eligibility, and granted the PA Department of Aging (PDA) authority to set reimbursement amounts by regulation. Earlier housekeeping amendments came in Act 112 of 2011.

Codified statute and regulations

• Statute: 62 P.S. §§ 3061–3068 (the Family Caregiver Support Act, as amended).
• Regulations: 6 Pa. Code Chapter 20, Family Caregiver Support Program. Contains eligibility, conditions of participation, services (assessment, care management, benefits counseling, education and training), and reimbursement rules.

Two regulatory floors and ceilings are worth knowing inside Chapter 20:

• At least 55% of allocated FCSP funding must be budgeted and expended on caregiver reimbursements themselves, not overhead.
• No more than 20% of the reimbursement budget may go to home modifications and assistive devices.

What FCSP actually pays

Per PDA's Caregiver Support Program program page and Act 20 of 2021's authorization:

• Up to $600/month for a primary caregiver's out-of-pocket caregiving expenses (supplies, contracted respite hours, transportation, incontinence products, etc.), at a sliding-scale percentage based on the caregiver's income. Effective August 10, 2021, the maximum monthly reimbursement was raised to $600, superseding the older "$200/month respite" framing that lives in some pre-2021 advocacy materials.
• Up to $5,000 lifetime for home modifications and assistive devices (grab bars, ramps, stairlifts, walk-in showers, etc.) per qualified primary caregiver.
• Free assessment, care planning, benefits counseling, and education and training services, non-means-tested.

The FCSP is not a wage. It is reimbursement for what you spent. You submit receipts to your county AAA caregiver coordinator, and your reimbursement percentage (anywhere from roughly 0% to 100%, depending on income) is applied. The sliding-scale table is published as Appendix C of PDA's Aging Network Policy and Procedure Manual, Chapter VI.

Who is eligible

The care recipient must be:

• Age 60 or older, OR
• Any age with a chronic dementia diagnosis, OR
• A related child under 18 (or under 21 with a disability) being raised by a grandparent age 55+ under the kinship-caregiver provisions of the Act.

The primary caregiver does not have to live with the care recipient. The program is non-means-tested for receiving services like assessment and benefits counseling; the cash-reimbursement piece is means-tested by sliding scale.

How to apply

Caregivers apply through their county's Area Agency on Aging. There are 52 AAAs covering all 67 PA counties, most are county-based, several are multi-county. Find yours by calling the PA Link to Aging and Disability Resources at 1-800-753-8827, or the PA Department of Aging State Helpline at 1-717-783-1550, or by going online to pa.gov/services/aging/apply-for-the-caregiver-support-program.

The 2025–2026 PA budget directed more than $10 million in new funding to the 52 AAAs for protective services, senior centers, and the Caregiver Support Program (including grandparents raising grandchildren and other kinship caregivers). The Shapiro Administration's proposed FY 2026–2027 budget calls for an additional $3 million to continue implementing Aging Our Way, PA.

PDA's Caregiver Support Program serves on the order of 35,000–45,000 PA caregiving households per year. Across the 52 AAAs, intake demand chronically exceeds funded capacity, and AAAs may maintain interest lists for cash reimbursement during periods of full enrollment. Apply early.

Why FCSP matters even if you're already getting paid through SMW

You can be a paid CHC SMW DCW for your mother and receive FCSP reimbursement for your out-of-pocket costs (the supplies and respite hours you pay for outside the wage). The two programs do not double-count: SMW pays you for your direct labor; FCSP reimburses your spending. The combination is one of the highest-value stacks available to a PA non-spouse adult-child caregiver.

Pathway 5, VA Program of Comprehensive Assistance for Family Caregivers (PCAFC)

PCAFC is the only federal program that pays a family caregiver, including a spouse, directly via a monthly stipend. It is run by the VA's Caregiver Support Program. Pennsylvania's veteran population is the 5th largest in the nation at approximately 600,000–700,000 depending on data source (Census 2024 lists ~601,500; PA DMVA reports "nearly 700,000"). VA medical centers serving PA caregivers are in Pittsburgh, Philadelphia, Coatesville, Wilkes-Barre, Erie, Lebanon, Altoona, and Butler.

Eligibility (38 CFR Part 71)

The veteran must:

• Have a serious injury or illness incurred or aggravated in the line of duty (single-system or multiple-system impairment criteria under 38 CFR § 71.20).
• Be in need of personal-care services for a minimum of six continuous months.
• Be enrolled in VA health care.

The family caregiver must be:

• At least 18 years old.
• A spouse, child, parent, stepfamily member, extended family member, or someone who lives with the veteran full-time.

Stipend formula and 2026 figures

The PCAFC monthly stipend is calculated as:

OPM GS-4 Step 1 annual rate for the locality / 12 × 0.625 (Tier 1) or × 1.0 (Tier 2)

For 2026, GS-4 Step 1 (Rest of US rate) is approximately $30,795/year, producing approximate stipend ranges:

• Tier 1: ~$1,600–$2,000/month tax-free.
• Tier 2 (the "higher need" tier): ~$2,565–$3,200/month tax-free.

Pennsylvania PCAFC stipends vary by locality. The OPM 2026 locality areas covering PA include Philadelphia-Reading-Camp Hill and Pittsburgh-New Castle-Weirton, both of which carry locality pay above the RUS rate, putting Tier 2 stipends in PA's two metro areas slightly higher than RUS-rate counties.

The legacy cohort cliff, 90 FR 47891

VA's interim final rule (89 FR 73402, September 2024) and the final rule at 90 FR 47891 (published September 29, 2025; effective September 30, 2025) extended the PCAFC legacy participants' transition period through September 30, 2028. After that date, legacy participants must satisfy the post-2020 PCAFC criteria or lose eligibility. If a Pennsylvania veteran joined PCAFC before October 1, 2020, this is critical, start planning the 2027–2028 reassessment now.

How to apply

Through the Caregiver Support Program at the veteran's VA medical center, or via www.caregiver.va.gov or the national Caregiver Support Line at 1-855-260-3274. The application is VA Form 10-10CG; expect 30–60 days from a complete application to first stipend.

Pathway 6, VA Veteran-Directed Care (VDC)

VDC is administered by the Administration for Community Living (ACL) and the VA at the federal level, and locally by Pennsylvania Area Agencies on Aging and Centers for Independent Living in partnership with VA medical centers.

VDC is the only PA pathway where a spouse can be paid as a caregiver under federal funds. The veteran receives a monthly self-directed budget, typically $1,400–$3,000/month depending on assessed need, and uses it to hire their own caregivers, including a spouse, adult children, friends, or in-laws.

Eligibility

• Veteran is 18+ and enrolled in VA health care.
• Veteran is clinically appropriate for HCBS, as assessed by their VA medical center's HCBS team.
• Veteran is willing and able to direct their own care, or designates a representative.

PA VDC partner organizations

• Philadelphia Corporation for Aging (PCA), Greater Philadelphia.
• Southwestern PA AAA, Greater Pittsburgh region.
• Area Agency on Aging for the Counties of Bradford, Sullivan, Susquehanna, Tioga and Wyoming (Area II), Northeast PA.
• Eastern Agency on Aging and Active Aging (Crawford / Erie), Northwest PA.
• MyCIL/ACES$ and ARIS Solutions, statewide CIL/FMS partners.

Pay schedule

VDC FMS providers in PA include MyCIL/ACES$ and ARIS Solutions. ACES$ pays semi-monthly on the Friday on or after the 10th and 25th of each month; ARIS pays on a parallel schedule. The 2026 PA Veteran-Directed Care pay schedule is published at mycil.org.

Stacking with PCAFC and Aid & Attendance

VDC and PCAFC cannot both pay the same family member for the same hours, but a household can have one caregiver paid through PCAFC and a different caregiver paid through VDC. VDC and Aid & Attendance can stack: A&A is a pension supplement to the veteran; VDC is a caregiver wage paid via FMS. The PA veteran-caregiver household with the highest paid stack typically combines: A&A pension ($2,874/mo for a married veteran) + VDC budget ($2,000/mo paid to the spouse) = ~$4,874/mo, plus any FCSP reimbursement on top.

Pathway 7, VA Improved Pension with Aid & Attendance (A&A)

A&A is not a family-caregiver wage program per se, it is a wartime pension supplement that gives the veteran or surviving spouse the income to afford a caregiver, who can be a family member. But it stacks cleanly with every other pathway in this guide, so most veteran households should consider it.

2026 Maximum Annual Pension Rates (MAPRs), effective Dec 1, 2025 – Nov 30, 2026

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Net-worth and look-back rules

• Net-worth limit (38 CFR § 3.274): $163,699 as of 12/1/2025 (annually indexed).
• Look-back (38 CFR § 3.276): 36 months from claim filing, with a 1–5 year potential penalty period for asset transfers.

Who can help, and who can't

38 USC § 5905 prohibits unaccredited persons from charging a fee for assisting with VA pension claims. PA has accredited Veteran Service Officers at every county Director of Veterans Affairs office and via the PA Department of Military and Veterans Affairs (DMVA) Office of Veterans Affairs at 1-800-547-2838. Use them, they're free and accredited. Avoid any "pension consultant" who charges to file your A&A claim.

PA-only veteran benefits via DMVA

• Veterans Temporary Assistance (VTA): up to $1,600 per 12-month period for shelter, food, fuel, and clothing, administered by County Directors of Veterans Affairs under PA DMVA.
• Veterans' Trust Fund (VTF): state-run grant program funded primarily by the voluntary $3 driver-license/registration check-off, awarding grants to nonprofits and county DVA offices for veteran services. Codified at 51 Pa. C.S. § 1721.

Pennsylvania tax non-conformity, the trap most articles miss

This is the single most expensive misunderstanding for PA-paid family caregivers, and it is rarely discussed correctly anywhere.

The federal rule (in your favor)

IRS Notice 2014-7 (issued January 3, 2014) and IRC § 131(c) treat qualified Medicaid waiver payments to a live-in care provider as "difficulty-of-care" payments excludable from federal gross income. To qualify:

1. The payments must be made by a state Medicaid waiver program (or a certified Medicaid provider acting under a waiver). PA's CHC SMW and OBRA SMW payments through Tempus or PPL qualify.
2. The DCW's home and the care recipient's home must be the same, the live-in test.

Most CHC and OBRA SMW workers paid through Tempus who live with the participant qualify and report $0 federal taxable wages on their W-2 box 1, even though they earned $20,000 or $30,000 of gross pay.

The Tax Court in Feigh v. Commissioner, 152 T.C. 267 (2019), affirmed by the 9th Circuit in 2020, plus IRS Notice 2020-15 (March 2020), confirm that a taxpayer may elect to treat difficulty-of-care payments as earned income for purposes of the Earned Income Tax Credit and the Additional Child Tax Credit, even when the payments are excluded from gross income. For low-income PA caregivers with qualifying children, this election is often worth $3,000–$7,000 a year in federal EITC alone. Don't skip it.

The PA rule (against you)

Pennsylvania's Personal Income Tax does not conform to IRC § 131(c). Per the PA Department of Revenue's Gross Compensation PIT guide and Letter Ruling PIT-06-008, difficulty-of-care / Medicaid waiver payments are includible as compensation for PA Personal Income Tax purposes even though they are excluded from federal gross income.

The reasoning is structural. PA conforms to IRC compensation rules selectively, and it does not treat compensation excluded under a non-statutory IRS Notice (rather than under a Code section enacted by Congress) as automatically excluded for PA PIT. Compensation paid for services is taxable PA-side under 72 P.S. § 7301 et seq. (Tax Reform Code of 1971), regulations at 61 Pa. Code Chapter 101.

A worked example

Maria lives in Allegheny County and is the paid CHC SMW DCW for her 78-year-old father, who lives with her. She is paid $25,000 in 2026 by Tempus PA, all of which qualifies as difficulty-of-care under § 131(c) because she is a live-in DCW.

• Federal Form 1040: $0 wages reported (excluded under § 131(c) / Notice 2014-7). Maria elects to treat the $25,000 as earned income for EITC. With three qualifying children, her EITC is approximately $7,830, the maximum 2026 figure.
• PA-40: $25,000 reported as compensation. PA PIT at 3.07% = $767.50.
• Allegheny County local Earned Income Tax (Pittsburgh resident): 3.0% = $750.
• Total PA tax bill on her "tax-free" wages: $1,517.50, before any other withholding adjustments.

The math still works for Maria, she nets approximately $25,000 (gross) − $1,517 (PA tax) − ~$1,913 (FICA, employer side covered separately) + $7,830 (EITC) ≈ $29,400, but only if she knows to make the EITC election and budget for the PA tax bill. Most PA-paid family caregivers don't, and most national articles confidently tell them the wages are "tax-free." They aren't, in PA.

Action item

Talk to a tax preparer who knows PA's non-conformity rule before April 15. The Pennsylvania Health Law Project Helpline (1-800-274-3258) can refer you to legal-aid tax preparers. PA does not have a state EITC, so the federal EITC election is doing all the work to offset your PA bill.

How to set up Services My Way, step-by-step

If you're going to be paid as a family caregiver through PA Medicaid, this is your operational playbook. Each step is a milestone families regularly call PA Link about; if you get stuck on any of them, that helpline (1-800-753-8827) is the right first call.

Step 1, Confirm the participant's Medicaid eligibility

Apply at COMPASS (compass.state.pa.us). For Medicaid LTSS in 2026, the applicant's countable monthly income limit is $2,982 (300% of SSI FBR), and countable assets are $2,000 single / $4,000 couple-applying. Spousal-impoverishment protections and the home-and-one-vehicle exclusions are codified at 55 Pa. Code Chapter 178.

Step 2, Apply for CHC

Through pa.gov/services/dhs/apply-for-community-healthchoices or the PA Independent Enrollment Broker at 1-877-550-4227.

Step 3, Pick a CHC plan

Aetna Better Health, AmeriHealth Caritas Vista, Health Partners Plans, PA Health & Wellness, or UPMC Community HealthChoices, depending on county and procurement-cycle status. The IEB will walk through plan-by-county availability.

Step 4, Service Coordinator assessment

The CHC plan assigns a Service Coordinator who completes a Person-Centered Service Plan (PCSP), including a needs assessment. The PCSP authorizes weekly hours of personal assistance services, plus any other waiver services (home-delivered meals, adult day services, home modifications, durable medical equipment, etc.).

Step 5, Elect Services My Way at intake

Tell the Service Coordinator at the assessment that you want SMW. If you don't ask, the SC will default to the agency model. The SC documents the participant's role as Common-Law Employer and refers the participant to the FMS, Tempus PA for CHC.

Step 6, Tempus FMS enrollment

Tempus enrolls the participant as employer and sends an employer welcome packet with EIN application (Tempus handles the federal EIN application as IRC § 3504 agent), state withholding registration with the PA Department of Revenue (myPATH), and PA Department of Labor & Industry UC account opening.

Step 7, Identify the DCW

The participant identifies a non-spouse, non-legally-responsible relative or friend. Adult children, siblings, in-laws, nieces, nephews, friends, and unrelated workers are all eligible.

Step 8, DCW background and clearances

The DCW must complete:

• Pennsylvania State Police Criminal History Check (PATCH; SP4-164). Required for all DCWs.
• PA Child Abuse History Clearance (CY-113) if any minors are present in the home.
• FBI fingerprint-based background check via IDEMIA, if the DCW has been a PA resident for less than 2 consecutive years immediately before application.
• OAPSA (Older Adults Protective Services Act) clearance under 35 P.S. § 10225.502 if working with adults 60+.

PA DHS's Apply for an FBI Criminal History Background Check and Clearances pages at pa.gov/agencies/dhs/resources/clearances are the consolidated portals. Background-check standards for SMW DCWs are governed by 55 Pa. Code Chapter 52 and parallel the home-care-agency/registry standard at 28 Pa. Code § 611.52.

Step 9, DCW orientation and training

Per 55 Pa. Code § 52.18 and the SMW manual, DCWs must complete:

• An orientation covering the participant's PCSP, mandated-reporter status, EVV requirements, time-keeping, infection control, and emergency procedures.
• CPR / First Aid as required by the participant's PCSP.
• Any additional training the participant elects in the PCSP.

Tempus offers a free online orientation curriculum.

Step 10, Electronic Visit Verification (EVV)

Per 21st Century Cures Act § 12006 (codified at 42 USC § 1396b(l)), all Medicaid-paid personal-care services delivered in the home must use Electronic Visit Verification. Pennsylvania uses the Sandata Aggregator and supports an open-vendor model; Tempus integrates with Sandata for SMW workers. The DCW logs each shift's start, location, and end via a smartphone app or a participant-home phone-based check-in.

Step 11, Set the DCW wage

The Common-Law Employer (the participant or representative) sets the DCW's hourly wage at or below the OLTL maximum DCW hourly wage rate for the participant's county. Effective January 1, 2026, the OBRA / Act 150 W1792 max rate increased; the CHC SMW max rate runs in parallel, with finalized post-April rate sheets published by Tempus.

Step 12, Time-keeping and pay

The DCW logs time via Tempus's EVV-integrated system. Tempus runs biweekly or semi-monthly payroll, withholds federal income tax (or excludes under § 131(c) for live-in workers), FICA, FUTA, PA PIT, and local EIT, and issues a W-2 at year-end. Schedule H is filed by Tempus on the participant's behalf under IRC § 3504.

Step 13, Mandatory-reporter status

All DCWs are mandated reporters of suspected elder abuse under 35 P.S. §§ 10225.701–10225.708 (Older Adults Protective Services Act) and child abuse under 23 Pa. C.S. §§ 6311 et seq. if minors are in the household.

Step 14, Workers' compensation

Under 77 P.S. § 21 et seq. (the PA Workers' Compensation Act), household employees are generally exempt unless the employer voluntarily elects coverage. In SMW, OLTL and CHC plans typically procure workers' compensation coverage centrally for participant-directed DCWs through the FMS; confirm coverage with Tempus at intake.

A 30-day playbook for newly diagnosed PA families

Use this playbook when a parent has just been diagnosed with a serious condition (dementia, stroke, advanced Parkinson's, terminal cancer) and you know you'll be the primary caregiver.

Days 1–3. Call PA Link 1-800-753-8827 to be routed to your county AAA. Schedule a free needs assessment. While on hold, write down: the care recipient's diagnoses, current medications, primary insurance(s), Medicare/Medicaid status, monthly income, and assets.

Days 4–7. Apply for Medicaid LTSS via COMPASS (compass.state.pa.us) if the care recipient doesn't already have it. Apply for Community HealthChoices in parallel through the PA Independent Enrollment Broker at 1-877-550-4227. If the care recipient is 60+, file simultaneously for the Family Caregiver Support Program through your AAA, even before you know whether you'll be paid as the DCW, FCSP reimburses up to $600/mo of your out-of-pocket costs.

Days 8–14. Receive the AAA assessment; receive the CHC level-of-care determination. Pick a CHC plan. Tell your Service Coordinator at the first call that you want Services My Way.

Days 15–21. Tempus PA enrollment paperwork arrives. Identify your DCW (must be non-spouse, non-parent-of-minor). Begin background checks (PATCH, OAPSA, PA Child Abuse Clearance, FBI fingerprints if PA-resident <2 years). Complete DCW orientation.

Days 22–28. First DCW shifts logged via Sandata EVV. First Tempus paycheck arrives within ~14 days of first time entry.

Days 29–30. If a wartime veteran, file for VA Aid & Attendance through your PA county Director of Veterans Affairs and screen for PCAFC eligibility at your VAMC's Caregiver Support Program. If you're working full-time and need leave, file a federal FMLA request with HR (Form WH-380-F).

PA vs. NY / NJ / OH / MD, a comparison

PA is among the most restrictive of its peer states on family caregiver payment. Here is the comparison table that most families want to see.

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The headline: PA is the only state on this list where a spouse cannot be paid through any state Medicaid pathway. Aging Our Way, PA flagged the spouse-pay question for further evaluation; as of May 2026, no SPA, regulation change, or legislation has moved.

Federal threats to PA caregiver pay (2026–2028)

The One Big Beautiful Bill Act (OBBBA), Pub. L. 119-21, signed July 4, 2025, contains several provisions that directly affect PA's CHC, OBRA waiver, and SMW economics. The article should be reread quarterly through 2028 against CMS State Medicaid Director letters and PA OLTL bulletins.

• Section 71112, retroactive eligibility shortened. Reduces retroactive Medicaid eligibility to 60 days for non-expansion enrollees and 30 days for expansion enrollees. Generally effective January 1, 2027.
• Sections 71115–71117, provider-tax safe-harbor phasedown. The Medicaid hold-harmless safe-harbor decreases from 6% to 3.5% between FY 2028 and FY 2034 in ACA-expansion states (PA is an expansion state). Affects PA's MCO assessment and CHC capitation funding.
• Section 71119, community-engagement (work) requirement. 80 hours/month of work, study, volunteering, or job training for ACA expansion adults to qualify for Medicaid. Effective January 1, 2027, with state flexibility to delay through Dec 31, 2028. PA has 720,000+ expansion-population adults.
• Section 71120, cost-sharing for expansion population above 100% FPL. Effective October 1, 2028.
• Section 71121, standalone HCBS waiver authority (the bright spot). Beginning July 1, 2028, HHS may approve new 1915(c) HCBS waivers covering individuals who do not yet meet a nursing-facility level of care, an unprecedented expansion. Initial 3-year terms, renewable in 5-year increments. PA OLTL has signaled interest in a pre-LOC HCBS pilot for early-stage dementia.

PA legislation worth watching (2025–2026 session)

• HB 200 (2025–2026), Family Care Act, establishing a Family and Medical Leave Program, Fund, and Advisory Board administered by the PA Department of Labor and Industry. Up to 12 weeks at up to ~$1,000/wk wage-replacement for care of a family member or own serious health condition. Passed PA House in March 2026; referred to Senate. As of May 2026, no Senate vote has been taken.
• Senate companion to HB 200, verify current bill number; SB 580 of the 2023–2024 session was the prior vehicle.
• Caregiver tax credit bills, PA Senate and House have repeatedly considered a state caregiver tax credit mirroring AARP's Credit for Caring model (up to $5,000 in qualifying caregiving expenses, 30% credit = $1,500 max). Aging Our Way, PA Strategy 4 calls for evaluation of a tax-free caregiver savings account.
• Direct Care Worker Bill of Rights, efforts to codify minimum hourly wages, training standards, and protections for DCWs in 55 Pa. Code Chapter 52.
• CHC re-procurement onboarding of Aetna and Health Partners, operational rather than legislative, but affects which plans are available in your county.

14 Frequently Asked Questions

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1. Can my spouse be paid as my caregiver in Pennsylvania?

Not through PA Medicaid. Under 55 Pa. Code Chapter 52, spouses cannot be paid as Direct Care Workers in Services My Way under CHC, OBRA, or Act 150. The single PA pathway where a spouse can be paid is VA Veteran-Directed Care for an eligible veteran. VA PCAFC also pays a stipend to a primary family caregiver (which can be a spouse) of a qualifying veteran. If your loved one is not a veteran, the spouse-pay door in Pennsylvania is effectively closed in 2026.

2. Can my adult child be paid as my caregiver in Pennsylvania?

Yes, in nearly every pathway. Adult children can be hired as Direct Care Workers under CHC SMW, OBRA SMW, and Act 150 SMW. They can also be paid as VDC workers, can be the primary family caregiver under PCAFC, and can be paid privately under a written Personal Care Agreement using your A&A pension or other private funds.

3. How much does Services My Way pay in 2026?

The county-banded maximum DCW hourly wage rate for 2026 is approximately $13–$14/hour in Region 1 counties and $15–$16/hour in Region 2 counties (Philadelphia, Allegheny, Bucks, Chester, Delaware, Montgomery). The Common-Law Employer (the participant) can set the DCW wage at or below the maximum. Effective January 1, 2026, OLTL increased the W1792 fee schedule for OBRA + Act 150; the CHC SMW rate moves on a parallel track. Verify the exact rate at Tempus's published Maximum DCW Hourly Wage Rate Sheet.

4. How long does it take to start getting paid through SMW?

Typically 60–90 days from the day you first call the PA Independent Enrollment Broker, assuming a participant who is straightforwardly Medicaid-LTSS-eligible and has no appeal. The slowest stage for most families is the gap between Service Coordinator assessment and Tempus FMS enrollment (about 14–21 days). The PA Health Law Project Helpline (1-800-274-3258) is the right call if you encounter denial or delay.

5. Are my Services My Way wages tax-free?

Federal: yes, if you live with the care recipient. IRS Notice 2014-7 and IRC § 131(c) treat qualified Medicaid waiver payments to a live-in care provider as difficulty-of-care payments excludable from federal gross income. PA: no. Pennsylvania's PIT does not conform to § 131(c), your wages are taxable in PA at 3.07% plus local Earned Income Tax (typically 1–3.93% depending on municipality). See the worked example in the "Pennsylvania tax non-conformity" section above.

6. Can I claim the federal EITC if my SMW wages are excluded under § 131(c)?

Yes, and you should. The Tax Court in Feigh v. Commissioner (2019), affirmed by the 9th Circuit (2020), and IRS Notice 2020-15 confirm that you may elect to treat difficulty-of-care payments as earned income for EITC and Additional Child Tax Credit purposes. For low-income PA caregivers with qualifying children, this election is often worth $3,000–$7,000 a year. Your tax preparer should make the election explicitly on your federal return.

7. What is the Family Caregiver Support Program and can I qualify?

FCSP is Pennsylvania's state-funded caregiver reimbursement program, codified at 62 P.S. §§ 3061–3068 (the Pennsylvania Caregiver Support Act, originally Act 204 of 1990) and 6 Pa. Code Chapter 20. It reimburses primary caregivers up to $600/month for out-of-pocket caregiving expenses (sliding scale by income) and up to $5,000 lifetime for home modifications and assistive devices. The care recipient must be 60+ or any age with a chronic dementia diagnosis, or a related child being raised by a grandparent age 55+. Apply through your county Area Agency on Aging via PA Link at 1-800-753-8827.

8. Can I receive both SMW wages and FCSP reimbursement?

Yes. SMW pays you for your direct labor as a Direct Care Worker. FCSP reimburses your out-of-pocket spending on caregiving, supplies, contracted respite hours, transportation, incontinence products, etc. The two programs do not double-count, and the combination is one of the highest-value stacks available to a non-spouse adult-child caregiver in PA.

9. What about caring for a veteran, what's the highest paid stack?

A married wartime veteran in Pennsylvania can typically combine: VA Aid & Attendance ($2,874/month for a married veteran), VA Veteran-Directed Care ($2,000/month or so paid to a spouse as caregiver), and VA PCAFC Tier 2 stipend (~$2,565–$3,200/month, paid to a different family caregiver if the spouse is the VDC worker), plus FCSP reimbursement for OOP expenses up to $600/month. Total monthly value: easily $8,000–$9,000 when fully stacked. The catch: each program has its own paperwork, accreditation rules, and verification. Use a PA-accredited VSO (free, via your county Director of Veterans Affairs), never a paid pension consultant, to navigate.

10. What's the difference between PCAFC and Veteran-Directed Care?

PCAFC is a monthly stipend paid by VA directly to a primary family caregiver (including a spouse) of a veteran with a qualifying serious injury or illness in the line of duty. Tier 2 is approximately $2,565–$3,200/month tax-free in 2026.

VDC gives the veteran a self-directed monthly budget (typically $1,400–$3,000) to spend on the caregivers and supports of their choice, including hiring a spouse, adult child, or friend as a paid worker through an FMS like ACES$ or ARIS Solutions.

Both can exist in one household, but not for the same hours of the same caregiver. Many PA veteran-caregiver households have a spouse paid through VDC and a different family member receiving the PCAFC stipend.

11. What is the legacy cohort cliff for PCAFC?

VA's final rule at 90 FR 47891 (published September 29, 2025; effective September 30, 2025) extended the PCAFC legacy participants' transition period through September 30, 2028. Legacy participants are veterans who joined PCAFC before October 1, 2020, under the pre-2020 eligibility criteria. After September 30, 2028, legacy participants must satisfy the post-2020 PCAFC criteria or lose eligibility. If your veteran joined PCAFC before October 2020, start planning the 2027–2028 reassessment with your VAMC's Caregiver Support Coordinator now.

12. Can I take FMLA leave from my regular job to care for a Pennsylvania family member?

Federal FMLA: yes, if you've worked at least 12 months and 1,250 hours for an employer with 50+ employees within a 75-mile radius. FMLA provides 12 weeks unpaid, job-protected leave per 12-month period (29 USC § 2612).

PA paid family leave: not yet. HB 200 (the Family Care Act) passed the PA House in March 2026 and is referred to the Senate; if enacted, it would provide up to 12 weeks at up to ~$1,000/week wage replacement. Until then, PA has no state paid family leave law in effect, and the only paid PA leave protection is whatever your employer voluntarily provides.

13. What does Medicare hospice cover for caregivers, and what about respite?

Inpatient respite care under 42 CFR § 418.302: Medicare hospice covers up to 5 consecutive days per occurrence of inpatient respite care (typically in a Medicare-certified hospice facility, hospital, or nursing home with a hospice contract), reusable across hospice benefit periods so long as hospice election remains in force. On the 6th and subsequent consecutive day, the care is reimbursed at the routine home-care rate, not the respite rate. Total inpatient days (general + respite) cannot exceed 20% of total hospice days.

FY 2026 hospice payment rates: CMS's FY 2026 Hospice Wage Index final rule (90 FR 14782, August 5, 2025) set the FY 2026 update at +2.6%, with the FY 2026 hospice cap at $35,361.44 for the period October 1, 2025 – September 30, 2026.

2026 Medicare Part B premium: $202.90/month (up from $185.00 in 2025); annual deductible $283.

14. Where do I start if I'm completely overwhelmed?

Make exactly two phone calls today:

• PA Link to Aging and Disability Resources: 1-800-753-8827, they will route you to your county AAA and start the FCSP and (if applicable) CHC processes.
• PA Health Law Project Helpline: 1-800-274-3258, free legal advocacy on Medicaid LTSS, CHC denials, and FCSP appeals (Mon, Wed, Fri 8 am–8 pm).

Then sit down with a notebook and write the basics: your loved one's diagnoses, medications, current insurance, monthly income, assets, and the names and ages of any other family members who might share caregiving. That notebook is the document every assessor, social worker, and accredited VSO will ask you to read from over the next 90 days.

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Pennsylvania crisis lines and helplines

• PA Department of Aging State Helpline: 1-717-783-1550 (general inquiries during business hours).
• PA Link to Aging and Disability Resources (ADRC): 1-800-753-8827, the PA-wide ADRC, the first call most families should make.
• APPRISE, PA's State Health Insurance Assistance Program (SHIP): 1-800-783-7067, free Medicare counseling, including Part B late-enrollment-penalty navigation.
• PA Health Law Project Helpline: 1-800-274-3258 (Mon, Wed, Fri 8 am–8 pm), free legal advocacy on Medicaid LTSS, CHC denials, and FCSP appeals.
• PA Senior LawHelp (Pennsylvania Bar Association senior referral): 1-877-727-7529.
• PA Long-Term Care Ombudsman (state office): 1-717-783-8975; county ombudsmen at every AAA.
• PA Adult / Older Adult Protective Services hotline: 1-800-490-8505 (24/7).
• 2-1-1 PA: general health-and-human-services 211.
• PA Domestic Violence Hotline: 1-800-932-4632.
• PA DMVA Office of Veterans Affairs: 1-800-547-2838 (or 717-861-8500).
• VA Caregiver Support Line: 1-855-260-3274.
• Tempus Unlimited PA (CHC FMS): 1-844-983-6787.
• PPL OLTL line (OBRA / Act 150 transition FMS): 1-877-908-1750.
• PA Independent Enrollment Broker (CHC): 1-877-550-4227.
• OLTL helpline (LIFE / OBRA / Act 150): 1-800-757-5042.

Where to start today

1. Call PA Link 1-800-753-8827 and request a county AAA assessment for both Family Caregiver Support and Medicaid LTSS screening.
2. Apply for Medicaid through COMPASS at compass.state.pa.us, even if you're not sure your loved one will qualify. The "deny" letter starts the appeal clock, and many PA families ultimately qualify on appeal.
3. If your loved one is a veteran, call your county Director of Veterans Affairs (find them via PA DMVA at 1-800-547-2838) and ask for a free VSO to file Aid & Attendance and screen for PCAFC.
4. Write down your loved one's diagnoses, medications, monthly income, and assets in one notebook. Take it to every appointment.
5. Talk to a tax preparer who knows PA's IRC § 131(c) non-conformity before April 15, 2027.

Read next

• Caregiver support programs in Pennsylvania (overview)
• Pennsylvania caregiver respite care guide
• Dementia care in Pennsylvania
• Pennsylvania Medicaid programs (CHC, OBRA, Act 150)
• Community HealthChoices eligibility and how to apply
• Veteran caregiver benefits, federal pathways
• Aid & Attendance, VA Improved Pension

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

About this guide. This guide was researched, written, and verified by Brevy's eldercare news desk on May 5, 2026, against the most recent OLTL Data Dashboard (November 2025), Pa. Code Chapters 20 and 52, the PA Department of Aging Caregiver Support Program program page, the PA Department of Revenue Gross Compensation guide, IRS Notice 2014-7, IRC § 131(c), Pub. L. 119-21 (OBBBA), 90 FR 47891 (PCAFC legacy extension), the CMS 2026 Medicare Parts A & B Premiums and Deductibles fact sheet, and SSA's 2026 COLA Fact Sheet. Every load-bearing factual claim is pinned to a primary source in our PA paid-caregiver fact file at library/facts/caregiver-pennsylvania/pa-paid-caregiver-pathways-2026.json. We re-verify state-program rules annually in May and federal rules quarterly. If you find an outdated detail, email fact-check@brevy.com.