Caregiver Contracts: How to Pay Family for Care
Caring for a family member often falls on children and spouses and most people enter into that agreement without being compensated. However, with good personal planning entering into a caregiver contract or a personal care agreement with a family member can provide benefits. The family member is awarded for doing the work and the agreements can alleviate tension between family members by making sure the work is fairly compensated. The agreements can also aid in Medicaid planning by making it part of the spend-down plan, if necessary.
It is important to consult with an elder law firm when drafting a caregiver contract. Weatherby & Associates, PC will customize a plan tailored to your family. This is most crucial if the end goal is to qualify your loved one for Medicaid.
The duties should also be clearly communicated in the contract. The duties can be anything from driving to doctor’s appointments, attending the appointments with them, grocery shopping, cleaning the house or paying the bills. A length of term of the contract, which in most cases is the elder’s lifetime. The contract can even apply when your loved one is in a nursing home and you can act as an advocate for their health.
Payment terms is another factor that needs to be spelled out clearly in the contract. For example, will the payment be a lump-sum, monthly or weekly/biweekly payments? Whatever is decided upon needs to be stated. If again the goal is to get your loved on to qualify for Medicaid, there are other considerations you need to be aware of to make sure the payments are not an excessive amount, which could be seen as a gift under Medicaid eligibility. The pay should be similar to what other caregivers are making or less.
With the income coming to the family member caregiver there are tax consequences because the caregiver will have to pay taxes on the income they receive. And, if the elderly family member does not have the financial means to pay for the family caregiver there could be other resources. There are state and federal government programs that may compensate family caregivers.
For more information on developing a family caregiver contract call Weatherby & Associates, PC at 860-769-6938. Our elder law firm will develop a tailored plan as well as provide information on what resources are there to help you and your family.