How to Get Paid as a Family Caregiver in Pennsylvania (2026)

You can get paid to care for a family member in Pennsylvania through several legitimate 2026 pathways. The honest catch is one hard limit that surprises most spouses. This guide walks through every way to get paid as a family caregiver in Pennsylvania this year, who each pathway will and won't pay, 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.

How to get paid as a family caregiver in Pennsylvania: 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 care 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. The spouse exclusion lives in the waivers themselves, at Appendix C-2-e of the CHC waiver (PA.0386.R05.01) and the same appendix of the OBRA waiver (PA.0235.R06.03), not in the Pennsylvania Code, and it 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 Alzheimer's disease or a related disorder 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. So are you if you are 55 or older and share a home with a relative aged 18 to 59 who has a non-dementia-related disability, a category Act 20 of 2021 added and that most write-ups still omit. 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.1

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, sizable VA stacks are common in PA.1

The details, and the catches, are below.

Pennsylvania paid family caregiver pathways at a glance

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

If you are a husband or wife who has quietly given up work, sleep, and most of your own life to care for a spouse, the next few sentences are going to sting, and you deserve to hear them plainly rather than after weeks of paperwork. Pennsylvania's most consequential caregiver-payment rule is not in the Pennsylvania Code. The Code defines who a Direct Care Worker is (55 Pa. Code § 52.3), but the rule about which family members can be paid sits in the §1915(c) waivers themselves, at Appendix C-2-e of the Community HealthChoices waiver (PA.0386.R05.01, effective July 1, 2026) and the same appendix of the OBRA waiver (PA.0235.R06.03). Act 150 runs the same self-direction model. 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 legal guardian of the participant.
• A Representative Payee.
• A Power of Attorney (POA).

Aside from those four exclusions, the waiver states there are no restrictions on the types of family members who may provide respite, personal assistance services, and participant-directed community supports. 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).1

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 peer-state comparison later in this guide matters so much: several neighboring states let a spouse be paid through their consumer-directed Medicaid programs; 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)

If your parent needs help at home and you are the one showing up every day, this is the program most likely to actually pay you for it. 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 serves several hundred thousand Pennsylvanians statewide, and the large majority of its enrollees are dual-eligible with Medicare.1

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.2

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 Pennsylvania's version of the consumer-directed Medicaid programs that many other states run, but with the spouse-exclusion.1

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 Appendix C-2-e of the CHC waiver (PA.0386.R05.01):

• A spouse cannot be hired.
• A legal guardian cannot be hired.
• A Representative Payee cannot be hired.
• A Power of Attorney cannot be hired.
• Aside from those four, there are no restrictions on the types of family members who may be paid. 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. The published W1792 fee covers more than the worker's take-home wage, it is split between the DCW's wage, employer FICA, FUTA, SUTA, and Tempus's administrative fee.1

Maximum DCW wages are set by county band, with higher-cost counties (Philadelphia, Allegheny, Bucks, Chester, Delaware, Montgomery) paying a higher maximum than lower-cost counties. The exact county-by-county figures change with each OLTL fee-schedule update, so pull the current Tempus PA DCW Pay Rate sheet (pa.tempusunlimited.org/dcw-pay-rate/) for the finalized numbers before you set a wage.

Tempus Unlimited publishes the finalized "Maximum DCW Hourly Wage Rate Sheet" on its PA portal once each year's fee-schedule update and any supplemental backpay process are complete; verify the exact county rate at Tempus before relying on a figure. The Common-Law Employer can set the DCW wage at or below the maximum.

A CHC SMW participant authorized for, say, 35 hours/week of personal assistance services generates a meaningful supplement, not a full-time professional salary: at an illustrative $15/hour wage that is roughly $525/week, $2,275/month, $27,300/year in DCW gross pay. Confirm your county's actual maximum at Tempus before you budget.1

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.1

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

The OBRA Waiver (named for the federal Omnibus Budget Reconciliation Act of 1990) 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.1

OBRA participants who choose participant-direction use the same Services My Way model as CHC, same DCW eligibility rules, and the OBRA waiver (PA.0235.R06.03, Appendix C-2-e) carries the identical four exclusions, spouse, legal guardian, Power of Attorney, and Representative Payee, with no restrictions on any other family member. 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 1-877-908-1750.1 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).3

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 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.1

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.

Inside Chapter 20, a regulatory floor and ceiling are worth knowing: a majority of allocated FCSP funding must be budgeted and expended on caregiver reimbursements themselves rather than overhead, and only a capped minority of the reimbursement budget may go to home modifications and assistive devices.

What FCSP actually pays

Per PDA's Caregiver Support 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 lower-cap "respite" framing that lives in some pre-2021 advocacy materials.1
• Up to $5,000 lifetime for home modifications and assistive devices (grab bars, ramps, stairlifts, walk-in showers, etc.) per qualified primary caregiver.1
• 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, based on your 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

Act 20 of 2021 rewrote the Act's definition of a care receiver into four categories, and qualifying under any one of them is enough. The care recipient must be:1

• A functionally dependent older adult age 60 or older, cared for by a primary caregiver age 18 or older, OR
• An individual of any age with Alzheimer's disease or a related disorder, cared for by a caregiver age 18 or older, OR
• A related child under 18 who is cared for by, and lives with, an older relative caregiver age 55 or older (a grandparent or another relative), OR
• An individual age 18 to 59 with a non-dementia-related disability who is cared for by, and lives with, an older relative caregiver age 55 or older.1

That fourth category is the one families miss most often. If you are 55 or older and you share a home with an adult son, daughter, sibling, or other relative in their 20s, 30s, 40s, or 50s who has a disability that is not dementia, the Caregiver Support Program is open to you. Older materials that describe FCSP as a program for caregivers of seniors and people with dementia are describing the law as it stood before 2021.

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 for FCSP

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.2

Recent PA budgets have directed new funding to the 52 AAAs for protective services, senior centers, and the Caregiver Support Program (including grandparents raising grandchildren and other kinship caregivers), and the Shapiro Administration's proposed budget adds further funding to continue implementing Aging Our Way, PA.

PDA's Caregiver Support Program serves tens of thousands of PA caregiving households each 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 has one of the largest veteran populations in the nation, and VA medical centers serving PA caregivers are in Pittsburgh, Philadelphia, Coatesville, Wilkes-Barre, Erie, Lebanon, Altoona, and Butler.1

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 from the federal pay scale, not set as a flat dollar amount, and there is no single multiplier. 38 CFR § 71.40(c)(4)(i) sets four of them across two schedules, and which schedule governs depends on whether the veteran is in the current program or is a legacy participant or legacy applicant:1

OPM GS-4, Step 1 annual rate for the veteran's locality ÷ 12, then × the applicable multiplier

• Current program (the veteran meets 38 CFR § 71.20(a)): × 0.625, or × 1.0 if VA determines the veteran is unable to self-sustain in the community.1
• Legacy participant or legacy applicant (38 CFR § 71.20(b) or (c)): the multiplier comes instead from the sum of the veteran's 2019 clinical ratings, at × 1.0 for a sum of 21 or higher, × 0.625 for 13 to 20, and × 0.25 for 1 to 12. No unable-to-self-sustain determination is required on this route, so a legacy Pennsylvania household rated 21 or higher reaches the full 1.0 multiplier on the ratings alone.1
• A veteran who meets both the current and the legacy criteria is paid whichever of the two amounts is higher, so being assessed under the current program can never cut a legacy household's stipend.1
• A legacy participant has a floor: the stipend cannot fall below what the caregiver was eligible to receive the day before October 1, 2020, for as long as the veteran remains at the address VA has on record. The legacy schedule runs eight years from October 1, 2020 and lapses October 1, 2028.1

Because the stipend tracks the GS-4, Step 1 rate for the veteran's locality, the exact dollar amount also depends on where the veteran lives. Pennsylvania PCAFC stipends vary by locality: the OPM locality areas covering PA include Philadelphia-Reading-Camp Hill and Pittsburgh-New Castle-Weirton, both of which carry locality pay above the Rest-of-US rate, so stipends in PA's two metro areas run slightly higher than in Rest-of-US-rate counties. For the current dollar figure, use the VA's PCAFC stipend calculator at caregiver.va.gov, and ask your Caregiver Support Coordinator which multiplier VA applied and on which schedule.

The legacy cohort cliff, 90 FR 46477

VA's interim final rule (89 FR 73402, September 2024) and the final rule at 90 FR 46477 (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 for PCAFC

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 1-855-260-3274.2 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.1

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, set by the VA based on assessed need, and uses it to hire their own caregivers, including a spouse, adult children, friends, or in-laws.1

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) with a VDC budget paid to the spouse, plus any FCSP reimbursement on top, producing a combined monthly total well above any single program.1

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

The 2026 Maximum Annual Pension Rates with Aid & Attendance, effective December 1, 2025, are:1

Net-worth and look-back rules

• Net-worth limit (38 CFR § 3.274): $163,699 as of 12/1/2025 (annually indexed).1
• 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 1-800-547-2838.2 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): a capped, once-per-12-month grant for shelter, food, fuel, and clothing, administered by County Directors of Veterans Affairs under PA DMVA (confirm the current maximum with your county Director of Veterans Affairs).
• Veterans' Trust Fund (VTF): state-run grant program funded primarily by a voluntary driver-license/registration check-off, awarding grants to nonprofits and county DVA offices for veteran services. Codified at 51 Pa. C.S. § 1721.

How Pennsylvania taxes your caregiver wages

If you have heard that Medicaid-waiver caregiver pay is "tax-free," you are half right, and the half that is wrong can cost you real money at tax time. This is one of the most consequential things for a PA-paid family caregiver to understand before you file.1

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.1

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 thousands of dollars 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 an illustrative $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.1

• 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 federal EITC can approach the maximum for her family size, worth several thousand dollars.
• PA-40: $25,000 reported as compensation. PA PIT at 3.07% = $767.50.1
• Allegheny County local Earned Income Tax (Pittsburgh resident): roughly 3%, on the order of $750.
• Total PA state-and-local tax bill on her "tax-free" wages: about $1,500, before any other withholding adjustments.

The bottom line for Maria: the PA state and local tax on her "tax-free" wages runs to roughly $1,500, but her federal EITC election can more than offset it, so she still comes out ahead, as long as she knows to make the EITC election and budgets for the PA tax bill.1 Plan for the PA tax so it doesn't catch you by surprise in April.

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.1 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.1

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.1 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+, has Alzheimer's or a related disorder at any age, or is 18 to 59 with a non-dementia-related disability and lives with you as a relative age 55 or older, 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.1

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).

How Pennsylvania compares to its neighboring states

PA is among the most restrictive of its peer states on family caregiver payment. The single biggest difference is the spouse question: several nearby states let a spouse be paid through a consumer-directed Medicaid program, while Pennsylvania does not.

The headline: among these neighbors, Pennsylvania is the only state 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 State Plan Amendment, 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.1

• 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 threshold is scheduled to step down over FY 2028 through FY 2034 in Affordable Care Act-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 the higher-income expansion population. 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), which would establish a state Family and Medical Leave Program, Fund, and Advisory Board administered by the PA Department of Labor and Industry. It would provide up to 12 weeks of partial wage-replacement for care of a family member or one's own serious health condition. It passed the PA House 107-92 on March 25, 2026 and was referred to the Senate Labor and Industry Committee; it is not enacted.1
• 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 (a percentage credit on qualifying caregiving expenses). 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.

Pennsylvania crisis lines and helplines

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.1
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.

Learn More

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