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Home » Medicaid » Medicaid Law: What is a Caregiver’s Agreement?

Medicaid Law: What is a Caregiver’s Agreement?

March 16, 2011Medicaid

Have you ever considered paying a family member to care for you in your later years when you need assistance with your daily activities?

Caring for a family member is a responsibility many people bear in this day and age, and it allows an aging loved one to stay in the home longer and avoid the stress and expense of moving to an assisted living facility.  It can also become a source of income for the caregiver, but the arrangement needs to be documented in a formal agreement.

A “caregiver agreement” is a formal contract under which relatives are hired to care for an elderly family member, and if properly drafted and used, it can be a win-win for both children and their elderly parents.

If a parent may need to rely on Medicaid to cover future nursing-home costs, a family must pay the caregiver in a way that’s permitted under Medicaid law. Since Medicaid is a need-based program, applicants must show that they have limited assets and income, and they are barred, for the most part, from gifting property to meet the standard.  In fact, Medicaid law allows the program to “look back” for sixty months to review any transfers of property, including money, and improper transfers may result in a period of ineligibility for benefits.

If a caregiver’s agreement is properly set up, Medicaid may allow these payments and not consider them gifts or improper transfers, but the agreement should:

  • Be in place before the services are rendered;
  • Document a caregiver’s responsibilities and hours;
  • Set a rate of pay that is in line with local costs; and
  • Be properly signed and witnessed.

It is important that you consult with an elder law attorney, or Medicaid planning attorney, to make sure any caregiver arrangement is properly structured and carried out, otherwise, there may be unintended consequences.

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Michael Robinson, Estate Planning Attorney
Michael Robinson, Estate Planning Attorney
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
Michael Robinson, Estate Planning Attorney
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