Can a parent pay a a family member to be a care giver.

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my father requires 24 hour care..he is bed ridden...is it legal for him to pay a child money for care...if it is what needs to be done
define a "child"...
i read a lot about this and would it be great if take care of our parents when they need it it is like giving back the love and support that they gave us when we are young
394 helpful answers
Of course a parent can pay a child to be a caregiver. Why not? Anybody can pay anybody to do anything (what a country!). A more accurate question might be "What are the ramifications of a parent paying a child for care?"

And this question would only be relevant in two areas: Taxes and public benefit eligibility.

From a tax standpoint, if the child is working ONLY for the parent in a service providing capacity, the law usually falls on the side that the child is now an employee of the parent and all applicable employment taxes are due including FICA, FUTA, and of course the child must pay income tax on the money earned. If the child is in "the business" of caregiving and the parent is one of several clients the child may then be eligible for independent contractor status.

Also keep in mind that money changing hands between parent and child can be extremely treacherous when it comes to later applying for public benefits. Without bonefide fair market value transactions documented, Medicaid caseworkers will be quick to deem payments as gifts and deny benefits.

That being said, from a public benefit standpoint, the powers that be actually encourage the parent-child caregiving.

In fact, in many states it is possible to transfer a lump sum of money in advance satisfaction of a caregiving contract between a parent and child and then qualify for Medicaid immediately.

What did he just say??? That's right. Transfer money to the child for caregiving and qualify immediately for Medicaid. This is done by executing a Personal Care (sometimes called Personal Services) contract between the parent and child in advance of Medicaid application.

An hourly rate is assigned the child caregiver. Let's say, for example, $35 per hour. The hourly rate is multiplied times the number of hours of service per week. Let's use 10 hours. This is multiplied by the number of weeks per month (4) and then by the number of months of the elder's statistical life expectancy, let's say 7 years or 84 months. The resulting amount, in this example $117,600, could then be transferred lump sum to the child.

This shifting of assets could very well bring the parent's down to Medicaid eligibility levels. The downside, as mentioned above, is taxation. The lump sum amount is taxable all in one year. Ouch! Then there are the other taxes, and filing requirements. Plus, the state requires that logs be kept of the services provided to the parent. Still a very effective tool which I have used often.

The other program to be aware of is Veteran pension benefits. Non-service connected pension programs such as Homebound and Aid and Attendance permit the cost of family caregivers to be included in benefit eligibility calculations.

Medicaid also has a program in many states called "Cash and Counseling" which also makes provision for family caregivers.

Hope this helps...
RS - You seem to have some good ideas there!

I am looking for advice/direction as I am working to bring my 80 year old mom home from a care facility to her house and have my family live with her and help her with her daily living. She has been diagnosed with Alzheimer's disease and dementia, and is currently dealing with a kidney stone.

She is fairly ambulatory, but is a fall risk, the nursing home keeps her in a wheelchair.

My concern is that if I quit my job to care for her, my financial contribution to my own family will suffer. I am confident that any amount my mom paid to me would be far less than the nursing home is costing her. I am unsure of the legality though, from what you say it is perfectly okay for her to pay ME instead of a facility?

I am not sure where to turn for more information. We are in St. Paul, MN.....any information that *anyone* can direct me toward would really be appreciated!
The other thing I would like to know....

is does "pay" HAVE to be hourly? Is it okay to have an agreed upon amount to be paid MONTHLY? There won't be any 8 hour days, I don't think. Some days will be more difficult than others. Does one have to consider OT pay when calculating hours worked over 40 per week (or whatever the law is in your State?)

There's just so darned much to think about. All the financial mumbo-jumbo in addition to mom's failing memory and the couple of fairly minor medical issues.
22 helpful answers
You can absolutely set up a family caregiver contract, as long as it meets the requirements of your state laws. In order to preserve the Medicaid and Veterans benefits options, if applicable, it is absolutely critical to have a qualified attorney prepare these documents.

Another benefit of written family caregiver contracts where money changes hands is that it can help to avoid conflicts with siblings or other family memebers later. Long before you call the lawyer to draft the contract you need to take the time to work through all the issues with your family.
I guess in a way, that is one thing I have to be thankful for.

I am an only child, so there are no siblings to bicker with. Of course, there are also no siblings to help with decision making or care either.
Hi, I just read your post and this is what my mom and I do (we are in CA). She pays me (she can afford it) to be her live-in caregiver. I pay estimated taxes every quarter and we fill out a 1099-MISC for tax filing at year end. It is also legal for a parent to "gift" you and your husband and I think children money every year, tax free, I forget the dollar amount but just call a cpa or google it. Also by paying me it is a tax write off for her. Good luck
I AM SINGLE & MY FATHER'S FULL TIME CAREGIVER, HE LIVES WITH ME. MY SISTER HAS POA & GUARDIANSHIP. MY SISTER & HER HUSBAND ARE SAYING THEY HAVE FULL CONTROLL OF MY DAD'S ESTATE & THAT WHEN HE IS GONE THEY CAN MAKE ME LEAVE MY HOME I SHARE WITH MY DAD!! MY SISTER IS A VERY HEAVY DRINKER & GETS OUT OF CONTROLL ALOT!! SHE DOES NOT KEEP ANY CONTACT WITH OUR DAD WHAT SO EVER!! THIS IS VERY SAD & MY DAD DOES NOT UNDERSTAND!! MY DAD WANTS TO CHANGE THE GUARDIANSHIP OVER TO ME. CAN THIS BE DONE & WHAT STEPS NEED TO BE TAKEN? I AM SO CONFUSED & CONCERN!! CAN SOMEONE HELP GUIDE ME!? I WOULD APPRECIATE ANY ADVICE!!

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