Caring for an aging or infirm loved one can go on for many years, so you may forego opportunities to earn money so you can provide care. This is why some families create a personal caregiver agreement to compensate a relative for the services provided.
The problem is that Medicaid might consider any payment from your parent or elder relative to be a gift that could render your loved one ineligible for Medicaid for a time. This is why you should know how to make your personal care agreement conform to Medicaid standards.
Put the agreement in writing
Your caregiver agreement must be a written document. Verbal contracts will not suffice. The document must have signatures from you and your relative prior to the care you provide. Do not attempt a retroactive agreement. Also, all signatures must receive a notarization at the time of signing.
Define the services
The caregiver agreement needs a specific start date. This proves when the formal arrangement began. Services provided before this date cannot receive compensation. The agreement must specify the care services you will provide, such as meal preparation, transportation and bathing. Be thorough when defining the care services so there is no ambiguity.
Set fair rates
The compensation rates for care services should reflect the typical care costs in your local area. Having below-market rates in your contract could indicate the amount you receive from your relative is actually a gift. Research local care provider rates before settling on your compensation.
Maintain records
Caregivers must keep detailed payment logs and records of care provided. This shows Medicaid that the money paid was for services rendered and not a gift. Logs should include dates, times, care tasks and payments.
A 2022 AARP study discovered that family caregivers usually expend an excess of $7,000 in their out-of-pocket costs annually, plus 26% of their income on average on caregiving costs. So there could be a necessity in your case to establish a personal care agreement that is comprehensive and does not violate Medicaid standards.
