Assuming the client lives with the daughter, the client needs to contact her daughter's social worker and ask if the payments are through a "Medicaid Waiver" program, that qualifies for "IRS Notice 2014-7".  You can't do anything until you find that out.

As for a dependent, I would GUESS so, but we don't know the facts.  You need to look up the dependency rules to determine if she qualifies.