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Caregiver Income
Caregiver Income
Medicaid Rules for Caregiver Income
Medicaid Rules for Caregiver Income
If you are a live-in caregiver using HIP or another form of Indiana Medicaid, and you are relying on your caregiver payments to be treated as exempt income, the Indiana Health Coverage Programs (IHCP) Policy Manual provides guidance on how these payments are handled. The relevant sections are:
Section 2835.30.05 – Foster Care Payments
Section 2810.55.00 – Structured Family Caregiving
These sections explain how caregiver payments may be excluded from income when determining Medicaid eligibility.
For informational purposes only. Please consult a professional
for advice based on your individual situation.
🔗 Link:
IRS Rules on Difficulty of Care Payments
IRS Rules on Difficulty of Care Payments
Under IRS Notice 2014‑7, payments received from state Medicaid Home and Community-Based Services waivers (like Health & Wellness, Pathways, Family Supports or TBI waivers) for the care of a disabled individual living in the same home are classified as “difficulty of care” payments and are excludable from gross income. This applies even if the caregiver is a relative or the individual they’re caring for contributes to payment.
Important details:
Only payments made specifically for the care of the disabled person qualify for exclusion
Other forms of compensation—such as vacation pay or fees for unrelated services—are not excludable under this rule
For informational purposes only. Please consult a tax
professional for advice based on your individual situation.
🔗 IRS FAQs:
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