Paid family caregiving in Vermont runs primarily through Vermont's Choices for Care Medicaid waiver, administered by the Department of Disabilities, Aging, and Independent Living (DAIL). The waiver's Agency with Choice self-direction model may allow a family member to be hired as a paid personal care attendant; whether a spouse qualifies should be confirmed with DAIL at 1-800-642-5119 before counting on it. For veteran families, VA programs offer the most direct and immediately available path to compensating a caregiver, including a spouse.
The Program of Comprehensive Assistance for Family Caregivers pays a federally tax-free monthly stipend to designated family caregivers of eligible veterans, with no spousal exclusion. VA Aid and Attendance provides up to $2,874 per month for a married veteran with one dependent in 2026.
The Short Version
If the care recipient is a wartime veteran, VA programs are the strongest route. PCAFC pays spouses and other family members a federally tax-free monthly stipend. Veteran-Directed Care lets the veteran hire any caregiver, including a spouse, from a flexible monthly budget. Aid and Attendance adds pension income the veteran can direct toward family care.
If the care recipient qualifies for Choices for Care, the Agency with Choice model may allow a family member to be the paid attendant. Contact DAIL at 1-800-642-5119 to confirm eligibility and whether the specific family relationship is permitted.
If neither VA benefits nor Choices for Care applies, a private personal services contract is the fallback. It must be written before care begins, at a fair-market rate, with documentation for Medicaid look-back purposes.
What Vermont Offers
Choices for Care (Agency with Choice)
Vermont's Choices for Care is a Medicaid waiver for older adults and adults with physical disabilities who would otherwise require nursing-home-level care. Administered by DAIL, the waiver provides home and community-based services across three levels: highest needs, high needs, and moderate needs.
The Agency with Choice model within Choices for Care is Vermont's self-direction option. Under Agency with Choice, the enrollee directs their care and can choose their own attendant, which may include a family member. Whether a spouse specifically can be the paid attendant should be confirmed with DAIL at 1-800-642-5119, as rules can vary by service type and can change. Do not assume spousal eligibility without verification.
NFCSP Through Vermont's Area Agencies on Aging
The National Family Caregiver Support Program channels federal Title III-E funds through DAIL to Vermont's 12 area agencies on aging, covering respite care, individual counseling, caregiver training, and supplemental services. NFCSP serves caregivers of adults age 60 or older, grandparents and relative caregivers of children under 18, and caregivers of people with Alzheimer's or related dementias at any age. There is no income test for most NFCSP services. NFCSP does not pay the caregiver a wage.
To connect with your local AAA, call the VT Helpline for Vermonters at 1-800-642-5119 or use the Eldercare Locator at eldercare.acl.gov.
The Six Pathways
Pathway 1: Choices for Care Agency with Choice
For Medicaid-eligible Vermonters who qualify for Choices for Care, the Agency with Choice model may allow a family member to be hired as the paid personal care attendant. The enrollment steps:
- The care recipient contacts DAIL at 1-800-642-5119 to begin the Choices for Care eligibility process.
- A needs assessment determines the appropriate level (highest needs, high needs, or moderate needs) and the services authorized.
- If approved for Agency with Choice self-direction, confirm with DAIL whether the specific family relationship -- including spousal care -- is permitted under current program rules.
- Payroll is handled through a fiscal management service (Financial Management Services contractor), covering tax withholding and W-2 issuance.
- The family caregiver receives regular pay at the authorized rate.
Pathway 2: VA Program of Comprehensive Assistance for Family Caregivers (PCAFC)
The Program of Comprehensive Assistance for Family Caregivers pays a monthly stipend to a designated Primary Family Caregiver of an eligible veteran. Spouses, adult children, parents, siblings, and other family members all qualify, with no spousal exclusion.
Eligibility requires the veteran to have a service-connected disability rating of at least 70% (single or combined) and a need for at least six months of personal care assistance. The monthly stipend is calculated from the OPM General Schedule grade 4, step 1 annual salary for the veteran's geographic locality, divided by 12, then multiplied by a care-level factor (0.625 for Level 1, 1.00 for Level 2).
The stipend is federally tax-free under 38 U.S.C. § 1720G. Primary caregivers also receive CHAMPVA health coverage (if otherwise uninsured), mental health counseling, and respite care support. Contact the White River Junction VA Medical Center's Caregiver Support Coordinator for current Vermont locality figures and enrollment guidance.
Pathway 3: VA Veteran-Directed Care (VDC)
VA Veteran-Directed Care is the VA's self-direction program, operated jointly with the Administration for Community Living through Area Agency on Aging partnerships. The veteran receives a monthly care budget and can hire any caregiver, including a spouse, at a rate set within that budget.
VDC availability depends on whether the veteran's VAMC offers the program. Contact the Caregiver Support Coordinator at the White River Junction VA Medical Center to confirm current VDC enrollment in Vermont. The hired family caregiver receives payroll through a Financial Management Services contractor and is issued a W-2.
Pathway 4: VA Aid and Attendance
VA Aid and Attendance is a pension enhancement for wartime veterans who need help with daily living, and for surviving spouses with similar needs.
2026 Aid and Attendance rates (effective December 1, 2025 through November 30, 2026):
- Single veteran: up to $2,424 per month
- Married veteran with one dependent: up to $2,874 per month
- Surviving spouse (no dependents): up to $1,558 per month
The net worth limit is $163,699. VA pension is subject to a 36-month look-back on asset transfers under 38 CFR 3.276 for transfers made on or after October 18, 2018.
The veteran receives the pension. Families can direct those funds toward a family caregiver through a personal arrangement or a personal services contract. Aid and Attendance has no Vermont Medicaid enrollment requirement.
Pathway 5: Private Personal Services Contract
For families outside both VA and Choices for Care systems, a personal services contract documents and compensates caregiving work. Requirements:
- Written and signed before care begins
- Specific about services, schedule, and rate
- Priced at or below what local home care agencies charge for the same services
- Supported by ongoing service logs
Vermont Medicaid applies a 60-month look-back on asset transfers. Undocumented cash payments to family members can appear as gifts and trigger a penalty period. A written contract at a fair-market rate executed before care begins provides a defensible paper trail. Confirm current Vermont look-back rules with a Vermont elder-law attorney.
Spouses are generally not recommended as parties to a personal services contract for Medicaid planning purposes, because inter-spousal transfers receive different treatment under Medicaid rules.
| Pathway | Administered by | Spouse eligible? | Typical monthly value | Key requirement |
|---|---|---|---|---|
| Choices for Care Agency with Choice | Vermont DAIL | Confirm with DAIL at 1-800-642-5119 | Authorized hours x attendant rate | Choices for Care financial and functional eligibility |
| VA PCAFC | VA (federal) | Yes | Varies by locality; tax-free | 70%+ service-connected disability |
| VA Veteran-Directed Care | VA + AAA | Yes | Monthly budget set by VA team | VAMC VDC availability |
| VA Aid and Attendance | VA (federal) | Veteran pays family member | Up to $2,874/mo (married veteran) | Wartime service; net worth under $163,699 |
| Personal Services Contract | Private | Not recommended for Medicaid planning | Negotiated rate | Written contract before care begins |
How to Choose
Veteran household: If the veteran has a 70%+ service-connected rating and needs daily personal care, start with PCAFC. The stipend is tax-free, spouses qualify, and the primary caregiver also receives health coverage. Layer Aid and Attendance pension on top if the veteran qualifies for both. Ask the White River Junction VAMC Caregiver Support Coordinator about Veteran-Directed Care as a flexible supplement.
Non-veteran Medicaid household: Call DAIL at 1-800-642-5119 to confirm Choices for Care eligibility and whether the specific family relationship is permitted under Agency with Choice.
Private-pay household: A personal services contract is the right structure for families outside both systems. Involve a Vermont elder-law attorney if the care recipient might apply for Vermont Medicaid within the next five years.
Not sure which pathway fits? Brevy's care navigator can help you work through Vermont's options. Chat at brevy.com.
IRS Notice 2014-7 and Taxes
If Choices for Care authorizes payments to a live-in family caregiver, those payments may qualify for the IRS Notice 2014-7 difficulty-of-care income exclusion. When the caregiver and care recipient share a household and the payments come from a qualifying Medicaid program, the income may be excludable from federal gross income. Families should verify with a tax professional whether the specific Vermont program and living arrangement qualify.
PCAFC stipends are excluded from federal gross income under 38 U.S.C. § 1720G and are not reported on a W-2.
Personal services contract income is ordinary taxable income.
Common Misconceptions
"Choices for Care automatically allows any family member as a paid attendant." The Agency with Choice model may allow family members, but the specific rules -- including whether a spouse qualifies -- must be confirmed with DAIL at 1-800-642-5119. Do not assume eligibility without verification.
"Medicare pays for ongoing personal care." Medicare does not cover long-term personal care or custodial care. It covers short-stay post-hospital skilled nursing and home health for homebound patients with a skilled need. Vermont Medicaid and VA programs are the routes for ongoing ADL support.
"A verbal arrangement is enough for Medicaid purposes." Vermont's 60-month look-back treats undocumented payments as potential gifts. A written contract, executed before care begins and priced at a fair-market rate, differentiates legitimate compensation from a transfer that could trigger a penalty.
Frequently Asked Questions
Possibly, through Choices for Care Agency with Choice, if your parent qualifies for the waiver. Family members may be eligible as paid attendants under the self-direction model, but rules vary. Confirm current rules with DAIL at 1-800-642-5119. If your parent is a veteran, PCAFC and Veteran-Directed Care are often the more direct route.
Whether a spouse can be the paid attendant under Choices for Care Agency with Choice must be confirmed with DAIL at 1-800-642-5119. For veteran households, PCAFC and VA Veteran-Directed Care both permit spouses to be paid without restriction.
The 2026 VA Aid and Attendance rate for a veteran with one dependent is $2,874 per month (effective December 1, 2025 through November 30, 2026). For a single veteran, the rate is $2,424 per month. Surviving spouses with no dependents can receive up to $1,558 per month.
No. The PCAFC monthly stipend is excluded from federal gross income under 38 U.S.C. § 1720G and is not reported on a W-2. Wages paid through state Medicaid programs are generally subject to payroll taxes and federal income tax, though the IRS Notice 2014-7 exclusion may apply for qualifying live-in arrangements.
Learn More
- How to Get Paid as a Family Caregiver in Washington
- VA Aid and Attendance in Vermont
- Caregiver Burnout: Signs and Support
- Medicaid Planning Strategies
Find personalized help choosing the right Vermont paid-caregiver pathway 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.