All too often, families put off coming to our office until their elderly loved one has already been admitted to a nursing home or is on the verge of being admitted.  So often in these cases we hear the story about how a family member has been caring for their loved one, for months or even for years, without compensation. Most often the caregiver is a daughter but everything in this article applies to other family caregivers as well.

Often a caregiver has quit a job at considerable financial hardship.  Now their loved one will be admitted to a nursing home and their savings will have to be spent down and depleted before Medicaid will pay for care.  

The family caregiver asks “Can’t I be compensated now, for all the services I have provided over the years?”  Unfortunately, the answer is “No.”  

Medicaid law presumes that, when you care for a loved one, you do so out of love and affection without expectation of compensation.  The way to rebut that presumption is for the elder and their caregiver to have a written contract in place at the time the care is provided.  For the family on the verge of admitting their loved one to a nursing home who did not have a written contract in place, I have to deliver the bad news that the elder cannot transfer money to the caregiver now, for services provided in the past. Without a care contact that was in place when the care was delivered, Medicaid will consider the transfer of funds to the caregiver as a gift.  Medicaid penalizes gifts by rendering the elder ineligible for Medicaid for a period of time that will not begin until the elder’s money is spent-down, at which point there will be no way for the family to pay the nursing home.  

Paying a caregiver under a written contract is not a gift.  Instead, it is compensation for services rendered. An elder needing assistance is allowed to pay someone (even a child or other relative or even a friend) to provide needed services.  This is permitted by Medicaid law and no penalty will be triggered provided it is done properly. The first step in doing it properly is to have a written agreement at the outset of the arrangement.  

Services do not have to be skilled or medical in nature in order to be compensated.  The types of services for which a caregiver can be paid include, by way of example, housekeeping, laundry, food shopping, meal preparation, help with taking medications, driving to the doctor or to church, assistance with bathing or other grooming tasks, and financial management.  The list goes on and on.

Here are the steps to follow in setting up a care agreement that will be honored by Medicaid as providing a legitimate vehicle for paying a family caregiver:

1) There must be a written, legally binding, and properly drafted and executed contract.  An oral agreement will not work. Levandowski & Darpino knows how to prepare such a contract and has done so for many families over the years.  Note that an agent under power of attorney might be able to execute the contract on behalf of the person needing care, even if the agent is the person providing the care;  

2) The elder must be evaluated to determine and record their care needs.  Levandowski & Darpino knows how to gather the necessary information and has done so for many families over the years; and 

3) The amount of the caregiver’s compensation must be comparable to what is being charged in the marketplace.  Levandowski & Darpino routinely gathers and documents such information on a county-by-county basis.

If you are providing care to, or receiving care from, a loved one, a care agreement is a golden opportunity to keep money in the family.

The attorneys at Levandowski & Darpino can draft an appropriate caregiver agreement that will satisfy Medicaid’s requirements.

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Levandowski & Darpino

Levandowski & Darpino, LLC has been dedicated to helping people in Southeastern Pennsylvania with their Elder Law needs for over 20 years. You will receive nothing but knowledgeable, compassionate legal guidance and representation from Henry and Maria.

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