Caring for an aging relative is difficult—and often underappreciated—work. Many people who serve as caregivers often feel as if they have two jobs—their full-time day job at the office and the part-to-full-time job of caregiver at home. As their parents age and decline, most of these caregivers end up not only giving up more and more of their time, but also, eventually, their own opportunity for more income. Caregivers need to know that it doesn’t have to be this way; that if their elderly loved one (and perhaps the rest of the family) agree, the caregiver can be compensated according to mutually agreed upon terms of a Caregiver Agreement, also known as a Personal-Care Contract.
Elder law attorneys have known about Caregiver Agreements for a long time, but very few caregivers themselves are aware of this useful contract. A Caregiver (or Employment) Agreement serves to document a caregiver’s responsibilities and hours, and to set a rate of pay that’s in line with local practices and incomes. The contract would then be signed by both the caregiver and care recipient, and eventually shared with the rest of the family.
An agreement of this sort can be useful not only for the care-giver and the one cared-for; it also comes in handy if you think you may need to rely on Medi-Cal to cover nursing home costs sometime in the future. Payments voluntarily made to a family care-giver without a written contract would likely be viewed as gifts, potentially disqualifying the parent from a later Medi-Cal subsidy should he or she later need care in a nursing home. However, if payments to relatives are made under the terms of a written employment agreement which complies with Medi-Cal rules, the risk of disqualification from a later Medi-Cal subsidy is reduced dramatically.
Caregiver Agreements are also useful in Veterans Pension planning: qualifying payments made pursuant to a legitimate care contract may count as an Unreimbursed Medical Expense, potentially qualifying the Veteran for a monthly pension to help pay for care expenses.
It is important to remember, however, that in order for government programs to recognize an employment agreement between family members the contract must already be in place before services are rendered.
This is why it is so important to have such an agreement prepared by an Elder Law attorney knowledgeable regarding Medi-Cal rules and Veterans Pension Planning before any money changes hands. If you believe that a Personal Care Contract may be a useful tool to provide for the care of your loved one, we invite you to contact us to arrange a consultation.