Caregiver Agreements & Senior Care
Caregiver Agreements & Senior Care:
Points to Consider Regarding Caregiver Agreements
The senior population is rapidly growing, and with it, the need for caregiving. This comes at a time when money is tight for many, due to poor economic conditions. In response, some aging parents are paying their family caregivers for their work, under what’s known as a Caregiver Agreement.
A Caregiver Agreement (also called a caregiver contract, or a personal service or personal care agreement) is essentially an employment contract between a caregiver and the recipient of the care. How much to pay a family caregiver is up to families to decide. Looking at how much a home health agency or other third-party company would charge for providing similar services is a good place to start.
Having a Caregiver Agreement can provide several benefits:
- It rewards the family member doing the work.
- It can help alleviate tension between family members by making sure the work is fairly compensated.
- It’s a good way for the caregiver and care recipient to iron out the terms of the relationship.
- It can be a be a key part of Medicaid planning, helping to spend down savings so the elder might more easily be able to qualify for Medicaid long-term care coverage, if necessary.
5 Points to Consider
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Meet with an attorney.
It’s important to get your attorney’s help in drafting the Caregiver Agreement contract, especially if qualifying for Medicaid is a goal. Making payments to a family caregiver without a personal-care contract in place may delay a parent’s eligibility for long-term care coverage under Medicaid. The money a parent pays to a family caregiver, absent an agreement in writing, will be considered a gift by Medicaid, and cause a period of delay where the parent will not qualify for the Medicaid benefit. -
Caregiver’s duties.
The contract should set out the caregiver’s duties, which can be anything from driving to doctor’s appointments and attending doctor’s meetings to grocery shopping to help with housework. The length of the term of the contract is usually for the elder’s lifetime, so it’s important to cover all possibilities, even if they are not currently needed. -
Payment.
Payment to the caregiver can either be made with a lump-sum payment or in weekly or monthly installments. For Medicaid purposes, it’s very important that the pay not be excessive. Excessive pay could be viewed as a gift for Medicaid eligibility purposes. -
Taxes.
Keep in mind that there are tax consequences. The caregiver will have to pay taxes on the income he or she receives. -
Other sources of payment.
If the elder does not have enough money to pay his or her caregiver, there may be other sources of payment. A long-term care insurance policy may cover family caregivers, for example. Also, there may be state or federal government programs that compensate family caregivers. Check with your local Agency on Aging to get more information.
By opting for a family caregiver agreement, much of a loved one’s care is provided by a devoted family member, and the money a family would pay to a home health agency for aides to perform similar services would be paid to a family caregiver instead. It can often be a win-win situation for the senior and caregiver; especially if the caregiver is in need of a paying position and the senior has the means to pay for the loving support of family.
If you’re considering creating a Caregiver Agreement, be sure to consult an elder law professional to advise you on the best course of action, especially with regard to Medicaid qualifications.
BLOG Date: Tuesday, August 18, 2015
Writer: Ryan Allen