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Is switching back and forth every other month a fair distribution of work? Yes.
So many things are 'redone or rerouted' for the convenience, comfort and ease of the dementia victim, that really puts a strain on the caregivers. Many caregivers (me included) are hanging on by a thread, (physically, emotionally, financially, spiritually). Unfortunately, sometimes, to keep the c/g's in good health, the choice must be made in favor OF the c/g. This sounds like one of those cases.
You stated your loved one is very confused anyway, so a division of the labor, so as not to exhaust only one person, would be the best of both worlds. Your loved one will adapt and you will be refreshed after a 1 month vacation (every other month).
I vote to go ahead and give it a try. There is no sense killing the one caregiver to keep the continuity for the patient. In the end, the c/g won't be giving good care when they are exhausted and broken.
Just my 2 pesos.
Best to leave her at one house, but it wouldn't be fair to the person who has her full-time, and it's not easy to co-help at one home as we all do things differently and that could cause a major rift within the family. Can the family get together and use Mom's social security or any other retirement fun to hire a caregiver for a few hours per day?
Can Mom-in-law budget to move to Assisted Living/Memory Care? The cost isn't cheap, around $6k per month depending on your area. That way Mom-in-law would be around people of her own generation, and have 3 shifts of caregivers.
But if her dementia is serious as you had mentioned, and moving to Memory Care isn't in the cards, have her apply for Medicaid [different from Medicare] where she would go into a Nursing Home and Medicaid would pay for all of her care. I know that isn't always an option for some families as they want Mom at home. Just a suggestion.