2006-08-25 / Columnists

Spotlight On Elderlaw

Personal Services Caregiver Contracts
By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.


Today many millions of ill parents, friends or relatives are being cared for by family members in the United States today, without compensation.

There are no specific arrangements made on the part of the caretaker, other family members or the ill person to compensate or define the role of the caretaker.

Caregiver Contracts

A Caregiver Contract may be the answer to address the present uncertainties of the care giver's role and compensation for services and reimbursement for out of pocket expenses.

Because these services and reimbursements are made at the time that the services were provided, there are no later family issues about the value of such services and how they should have been provided for, when assets are shared between family members.

Another very inportant benefit of such a contract formalizes monies spent by the ill parent so that if a Medicaid application is made in the future, the monies spent on salary will not be considered a "transfer" under the Medicaid rules, and will therefore avoid related Medicaid "penalties" which may postpone eligibility.

The contract itself should be drawn by an elder law attorney, with an eye toward making the contract fit the family situation.

The contract should specify a fair compensation; similar to a professional providing the very same services.

Remember, the services and care specified in the contract should be medically necessary.

Additionally, the terms of the contract regarding caregiver responsibilities should be clearly defined.

Execution of the contract is also necessary.

Other important matters to consider are as follows:

The caregiver is now an employee and should be treated as such.

The care-receiver is an employer and also should be treated as such.

When paying wages to an employee all necessary withholdings should be made, including social security

Please feel free to contact the law office of Brady & Marshak, LLP for further information on this or other matters related to your family's legal services at (718) 945-7777.

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