Issues Regarding Paying a Family Caregiver
According to a recent report by the National Alliance for Caregiving and
AARP, about 43.5 million Americans look after someone age 50 or older, up 28%
from 2004. In lieu of paying a home help agency, a family member may provide
the care. However, if that person gives up their job to care for the parent,
should they be compensated? Most are not. This gives rise to tension, strain
and conflict, within the family, before and after the parent dies.
But, another major conflict may arise, Medicaid. Medicaid pays for long term
care, when you cannot afford to pay the nursing home. However, there are stringent
rules regarding the application for Medicaid. One, is a five year look back
period, to review what you have done with your assets. If you have gifted any
assets, potentially, paying for caregiving by a family member, you may be penalized
Consequently, if a parent may need to rely on Medicaid to cover future
nursing-home costs, the family must pay the caregiver in a way that's permitted
under Medicaid law.
However, if caregiving payments are made to the family caregiver, under the
terms of a written employment agreement, usually called a personal-care
contract, then Medicaid allows it. But this contract must be in place before
the services are rendered. These employment contracts must document a caregiver's
responsibilities, hours and a reasonable rate of pay. Both the caregiver and
care recipient should sign the contract. Obviously, all family members should
be involved in the decision making process, to avoid any family disputes.