Caregiver Agreements

I frequently meet with clients who tell me something similar to this: "I have been taking care of my parent and receiving money over the last few years. Now my parent has just entered the nursing home and there is a house and $20,000 left. Since I am paying my parent's bills, I will have to pay the nursing home $8,000 a month until the money runs out and then apply for MassHealth (Medicaid). What about the money I've received over the years for taking care of my parent?" If nothing is done, all money paid to the child within the look-back period (the 5 year look-back period is phasing in and will be 5 years March, 2010) will be deemed a gift and must be paid to the nursing home.

This is an example of the value in planning ahead. Had I had the chance to speak to the child before the parent's entry into the nursing home, I would have recommended that I prepare a caregiver agreement, to be signed by the caregiver(s) and the parent, or the parent's agent if the parent is incompetent. The best plan: the parent's doctor or health care provider states in writing what services the parent requires to keep the parent at home. I prepare an agreement specifically listing those services, hours per week, and amount of pay. The work is not paid for until after the contract has been signed by both (all) parties. The caregiver keeps a log and receives payment every week for the exact hours worked. Because the money paid to the caregiver is considered income, income taxes must be paid for the services rendered. I draft the contract as an independent contractor agreement, not as an employee.

However, if I do not have the opportunity to help the client before entry into the nursing home, I still have other ways to prevent MassHealth from forcing the child to pay the money back. I will address this approach in a future blog.