Older age often brings ailments and infirmities, so in time you might lack the ability to fully care for yourself. Having a son or daughter move in with you and help you with different care tasks could help you at the moment, but it might cause some issues if you need Medicaid later on.
If you want to set up a personal caregiver arrangement, you should understand how to harmonize it with Medicaid eligibility requirements.
How a personal caregiver arrangement works
If you have worries about your relative giving up too much personal time and freedom to care for you, you may pay your family member through a personal caregiver arrangement. This is especially important if your loved one will provide you with care for years to come.
Mistakes with caregiver arrangements
Some common mistakes in composing a caregiving agreement could disqualify you from Medicaid services. This is because Medicaid may see your payments to your relative as a gift, which runs afoul of Medicaid restrictions on giving away property just to meet Medicaid income and asset thresholds.
If you do not use a formal written agreement, you lack documentation to show your payment is reasonable compensation and not a gift. Failing to keep detailed payment and service records also casts doubt on whether the compensation was for care provided.
Be careful how you pay your relative. Paying caregivers below-market rates appears as gift-giving rather than payment for services. Also, trying to pay a caregiver retroactively for past services will not work as Medicaid sees retroactive payments as gifts and not compensation.
Make an agreement Medicaid-compliant
In addition to creating a well-written contract, your agreement should define specific care services, such as such as bathing or transportation. Establish pay rates comparable to professional care providers in your area. Your contract should have signatures from you and your caregiver with notarization. Also, your caregiver should maintain records of care services performed and payments received.
With proper preparation, personal caregiver agreements allow families to compensate relatives for care services provided to elderly loved ones without losing out on Medicaid coverage for long-term care.