Compensating Family For Caregiving
There is a growing trend toward moving parents to the home of a child and out of nursing homes. One impetus for this change is the high cost of institutional care, another is the isolation many felt during COVID when our facilities did not allow family members to visit. There has also been a change in philosophy; we are beginning to recognize that our elderly has a better quality of life if they can stay in their own home or live with a loved one (unless they need skilled nursing services). The 2010 Affordable Care Act made Medicaid benefits more broadly available to people living at home and increased federal funding to states that make more home care services available to those who would otherwise be in nursing homes.
If you can find someone willing to help you stay in your home, whether they are family or contract caretakers, I think they should be compensated, and you should have an agreement in writing that specifies what tasks will be done for you and the amount of compensation. Under federal Medicaid law, caregivers are not entitled to compensation unless the parties have entered into a written care agreement. It is important that an attorney be consulted in drafting a caregiver agreement if you want to compensate your caregiver and not encounter problems with Medicaid eligibility requirements.
When a child provides for the care of a parent, that child may find it difficult to ask for compensation but taking care of a loved one may prevent that child from working outside the home to their full potential. I have clients who think their children will work this out after the death of the client but usually children refuse to compensate a sibling after the death of a loved one unless there was an agreement in writing.
An effective caregiver agreement must be in writing and should be witnessed by two unrelated persons or notarized to be honored by those administering Medicaid. The agreement should indicate when care is to be provided, what care is provided, and the amount of compensation paid to the caregiver. The caregiver should be paid a reasonable rate for his or her services based on the type of services provided and the rate that would be charged by a third party providing the same services. The rate may be different for different types of services. The agreement should include payment schedules and payment should not be made in advance of rendered services because Medicaid may treat unearned compensation as a gift. If the caregiver has experience in providing certain services, he or she may be entitled to additional compensation for his or her expertise. For example, if your child is a nurse and he or she can care for an elderly relative, he or she should be compensated at a rate higher than a family member who is not a nurse.
Caregiver agreements reduce misunderstandings among family members after the death of a loved one and help with Medicaid qualification. Caring for a parent or other family member before his or her death is hard work. I have handled cases where siblings or other family members wish to file claims against the estate of a deceased for compensation due to services provided before death. These claims are not allowed, in general. I have also had cases where family members wish to contest a deceased’s Will because they do not feel that they were treated fairly. I encourage family members to discuss care and compensation issues before death to reduce possible litigation after the care recipient’s death.
This article was written by Tamra K. Waltemath of Tamra K. Waltemath, P.C. This information is for general informational purposes only and does not constitute legal advice. For specific questions you should consult a qualified attorney. Tamar K. Waltemath is an elder law attorney focusing on Wills, Trusts, estate and trust administration, probate and non-probate transfers, guardianships and conservatorships. She can be contacted at Tamra K. Waltemath, P.C., 3843 West 73rd Avenue, Westminster, Colorado 80030, (303) 657-0360, or visit her website at: www.waltemathlawoffice.com