Many seniors rely on the assistance of family caregivers to help them with activities of daily living, as well as manage their care. Caregivers devote long hours to assisting their loved ones, often sacrificing their own employment. This can decrease the caregiver’s income, jeopardize his or her retirement savings, as well as negatively affect his or her quality of life and overall health.
One way that an elderly adult can compensate a family member for his or her sacrifices is through a care contract. Much like an employment contract, a care contract allows the senior and family member to agree on certain tasks that the family member will perform in exchange for specified hours of service at a fixed rate of financial compensation. Paying the family member at a reasonable rate that a home health agency would charge in similar circumstances can be a good base salary at which to start if the family cannot agree on an hourly wage.
Creating a care contract can provide many benefits for you and your family. To begin, these agreements define the caregiver relationship between the family member and elderly adult. Care contracts clearly state which services the family member must perform. Care contracts also lessen tension between family members regarding who is responsible for providing care for the senior, as the agreement explicitly defines who is charged with caring for the elderly adult for specific compensation. Additionally, many families prefer that a family member provide care for their loved one rather than a stranger; there is the added benefit that they are paying these wages to someone within their own family.
Perhaps most importantly, care contracts can help seniors become eligible for Medicaid and Veterans Benefits. Seniors often want to compensate the caregiver for their assistance, but if they fail to draft a care contract, Medicaid may impose sanctions. This is because Medicaid presumes that relatives provide all care and assistance for love and affection and will view past undocumented payments to caregivers as “gifts.” Finally, if a loved one is caring for the senior, there is a greater likelihood that the senior will need nursing care and Medicaid in the future. This is why it is important to see an experienced Elder Law attorney to make sure your care contract is drafted correctly.
Seniors living at home can also use care contracts to meet the income test in order to become eligible for Veterans Benefits. This test requires applicants to have Income for VA purposes (IVAP) that is less than the benefit for which they are applying. A care contract can help the senior document that his or her income is less than the expenses he or she must pay monthly for the cost of his or her care that a family member provides according to the agreement.
If you think that a care contract may be right for your family situation, or if you need more information about Medicaid or Veterans Benefits, be sure to contact an experienced Elder Law attorney today. Our firm offers additional information on our website, and we offer free educational seminars each month discussing these topics and more. See our website for the seminar schedule. To learn more about care contracts, or whether your loved one may qualify for these public assistance programs, contact W.G. Alexander & Associates today!