Caregiver Compensation Agreements: The Hidden Solution to Caring for Loved Ones

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 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 cared-for; it also comes in handy if you think you may need to rely on Medicaid to cover nursing home costs sometime in the near future. Medicaid often will not provide payment for nursing-home costs, unless applicants have already recouped payments made to relatives over the previous five years and used the money to pay existing nursing home bills. However, if payments to relatives are made under the terms of a written employment agreement such as a personal-care contract, the law allows those payments to stand.

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 talk to an attorney who is well-versed in elder law and Caregiver Agreements before any contracts are signed or money changes hands. Contact our office today to provide for your loved ones by exploring your options for caregiving and caregiver agreements.