By: Jessica L. Estes
If you currently provide care for a chronically ill, disabled, or aged family member, likely you spend, on average, twenty hours per week providing that care. This is in addition to your own personal commitments, which may, and often do, include managing a full-time job and your own family. Not only can this be overwhelming, but it can be extremely stressful. Moreover, family caregivers usually are not paid, as they feel some responsibility to provide this care solely out of love and affection.
But what happens when they can no longer provide adequate care for their loved one? The loved one may not have the resources to afford in-home, assisted living or nursing home care. And, unless the loved one has less than $2,500 in countable assets, they will not qualify for Medicaid benefits. Although one can “spend-down” assets below the $2,500 limit, Medicaid does not allow reimbursement for the care you provided. If you are reimbursed and your loved one files an application for Medicaid benefits, that reimbursement will be considered a gift subject to penalty and your loved one may not qualify for benefits for a very long time.
However, a family caregiver may be compensated for their services without any impact to their loved one’s Medicaid benefits if they have a personal care contract. A personal care contract is an agreement between a caregiver (one who provides care) and a care recipient (one who needs care) detailing the services to be provided for a set amount each month. To avoid a Medicaid penalty, the personal care contract should be written, signed and dated before you begin providing services or receiving payment. Also, the personal care contract should specify which services will be included and which will be excluded. Services can include meals, lodging, furnishings, utilities, laundry, housekeeping, personal assistance (bathing, dressing, grocery shopping, transportation to/from medical appointments, etc.), medical care and costs, and materials and supplies necessary to perform the services.
Additionally, the personal care contract should include the amount the caregiver will charge the care recipient for these services. You cannot, though, be paid more than someone with your equivalent experience and skills who does this professionally in your general area. For Medicaid purposes, though, the caregiver should keep a log of the services they are performing on a daily basis and a record of the payments received for these services. In the event the care recipient applies for Medicaid, the caseworker will want to see a record of the services provided and the payments made, which should be in accordance with the contract. As long as the services and payments are in accordance with the personal care contract, Medicaid will not penalize payments made to the family caregiver.
Finally, because this is a legal contract, I recommend having a qualified elder law attorney draft the contract for you, especially if Medicaid benefits might be needed in the future.