Family caregivers play a major role in maximizing the health and quality of life individuals with acute and chronic illness in the United States. Recipients of care depend on family caregivers for assistance with daily activities, managing complex care, navigating the overwhelming health and health insurance systems and communicating with health care professionals.
Family caregivers provide valuable care out of love and often necessity but the role of caregiver is an extremely demanding job.
According to the National Alliance for Caregiving, 37% of caregivers spend more than 40 hours a week providing care and another 30% spend 20-39 hours assisting with needs. Caregivers cope with physical, emotional, spiritual and financial challenges brought about by the demands of the job and the need to reduce or forgo employment to care for a loved one. These challenges affect the caregiver’s health and quality of life as well as the recipients.
Long-term caregiving has significant financial consequences for caregivers, particularly for women. Caregivers face the loss of their own income, loss of employer-based benefits, shrinking of saving to pay for caregiving costs and a threat to their retirement income due to fewer contributions to retirement vehicles.
One way to compensate an adult child willing to devote so much of his or her time to caring for an ailing or aging family member is through a caregiver agreement. The agreement is essentially an employment contract between the caregiver and the recipient of care.
The family member and the caregiver stipulate to a caregiver’s tasks, the hours spent caregiving and financial compensation. Often it is hard to accept that a caregiver may want or need to be compensated for services rendered because love doesn’t pay the mortgage or for groceries but by having a binding legal contract in effect can protect both parties down the road.
Caregiving is a journey. The journey changes daily, weekly monthly and yearly.
Here are five important ways a caregiver agreement can help your family.
Caregivers get paid for the job they do
It offers a great way to support the person for their time and effort in caring. This may be a caregiver’s sole source of income or a second job. How much to pay a caregiver is up to the family. A good place to start is to look at how much a home health agency would charge. The average rates currently are $18-25 per hour. These rates often come with minimum requirements and vary based on needs and time etc. After research and discussion, set a salary and establish a schedule for payment.
Define the caregiver relationship
A detailed caregiver agreement sets boundaries. It makes clear the extent of the services being provided and the amount of money the caregiver is getting paid.
Keep peace among family members
Having a caregiver agreement in place helps minimize the conflict between family members over the handling of care. The existence of a contract helps elevate the validity of the arrangement and value the services provided by the caregiver.
Clear the way for Medicaid
With regard to Medicaid eligibility, payments made to a caregiver under contract are permitted by Medicaid and will not count against them when applying. Additionally, payments under a caregiver agreement can reduce the care recipient’s countable assets, which in turn may allow them to become Medicaid eligible sooner. Absent an agreement in writing, the money a recipient pays a caregiver may be deemed a gift [or uncompensated transfer of funds] by Medicaid. This may cause a period of ineligibility where a recipient may not qualify due to the current 5 year Medicaid look-back period. At the time of Medicaid application, Medicaid may consider all payments made to caregiver for the past 60 months an uncompensated transfer of funds which may cause a penalty period also known as a period of time in which Medicaid will not provide benefits.
The monetary and emotional cost to the family for the delay in Medicaid far outweighs the time and cost to properly execute a caregiver agreement.
Keep care and money in the family
Many recipients find comfort in having care from a devoted family member over a stranger and the money the family pays for care stays in the family.
The caregiver agreement sets the stage for the journey and makes the pathway to caregiving a two-way street. It fosters open communication among caregiver, recipient and family members. It begins a relationship with an elder law attorney and may also be an opportunity to review, update or prepare legal documents including Authorization to Release Health Care Information, Health Care Power of Attorney, Living Will, General Durable Power of Attorney, Will and Trust(s). It also paves the way for Medicaid planning and asset protection. At Medicaid Plus we can initiate the formation of a support team for the caregiver which may include professionals such as a financial advisor, CPA and other local resources.
With the understanding of the caregiver role, organization of legal documents and establishment of a support team, the caregiver relationship is on track for success.
Having a detailed, written caregiver agreement allows a caregiver to be Compassionate; Alert to current needs; Resourceful and Energetic in their care for a loved one.
Questions about Caregiver Agreements, Medicaid Planning or any other elder care needs?
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