I did meet with an elder law attorney this week and so happy that I did. Even though I did my research online, to meet with an attorney face to face really made a difference in what I learned on the Medicaid laws and explained to me in layman's terms. Thanks for the advice! Llamalover!
If elder does this, it has to be able to be done so that it absolutely cannot under any scrutiny look like “gifting” to the family member…… and that means that…. 1. there is a legal contract done, witnessed & notarized 2. they are being paid market rates for their work 3. taxes and other household employees responsibilities are being done, So paid on 40 hr work week, W-2 done, FICA done and reported, workmans comp insurance in place. Mileage log done if they are running errands and paid at current federal mileage rate.
If in-home caregivers r being paid $11.45 an hr in your city, then family member paid $11.45 hr. Elder cannot pay them $82.50 hour. The only way to pay beyond the lower wages that caregivers are paid, would be if they are an RN or other licensed medical professional and they can show that this is what their wages were before they quit their old job to become FT caregiver for a family member.
Spend downs can be sticky to do. If the elder has $, really find a CELA level of elder law attorney and go over with them as to how Medicaid reviews applications in yiur state and what type of legit spend downs can be done with the elders $ and do this way way way ahead of ever filing for Medicaid.
Talk to your Medicaid caseworker. In most situations, you're going to need a legitimate contract to hire family (or others) which means they are employees who will have to report income and pay taxes. I think $600+ is still the amount paid to contract or self employed people where you would have to submit a 1099 to report what you paid them.
Some rules may say if you just pay someone for services, it could be considered gifting. If you have applied for Medicaid - talk to caseworker. If you have not, get an elder atty to set it all up for you (and give you the info on how to report the wages). Getting advice from people who may or may not really know could put your loved one in a penalty period before the Medicaid kicks it. Not worth the risk
Persian, Gifting for IRS & tax regulations are totally, totally different than gifting regulations for Medicaid eligibility.
IRs allows for now 16K annual tax free gifting. But Medicaid doesn’t.
Any gifting or transfer of an asset can give Medicaid the ability to place a transfer penalty on the application and the applicant will be ineligible for a period of time. There is someone on this forum that is having right now having to provide info on all $ over $200 for their husbands Aunt who is filing for LTC Medicaid in a NH. $200! If a states Medicaid program wants to have the bar set as low as $200, they can & will.
igloo- You are correct. I just worked on Med app for someone and had to acct for all payments that were $200 plus --- and did 5 yr look back to see if any substantial expenses that might indicate gifting.
Please be kind in responding! Why can't the money just be given as a gift? Family members are given gifts of money all the time. I think it's up to $15,000 without having to file a tax form.
The problem with gifting , if loved one needs to go on Medicaid within typically 5 years of the gift. Medicaid maybe denied or impose a penalty. Never jeopardize Medicaid eligibility. Medicaid is for people in need, not to protect inheritance..
Yes, you can be paid for caregiving. It must be done with a contract that state the responsibilities and rate of pay. The care provided must be medically necessary with taxes withheld from payment and reported to the IRS.
An elder law attorney can help with preparation of the contract to make sure it is in compliance with Medicaid rules.
I came here to say we just had a conversation with an elder attorney about this. Family members can get paid market rate for performing tasks the elder needs. As Glad said above, you need a formal caregiving contract and the person/people paid are required to pay income tax on the earnings.
It doesn’t matter what your justifications are, you cannot pay yourself or unlicensed relative for care as a Medicaid spend down strategy. Care must be provided by a licensed agency that pays taxes.
Pls see a CERTIFIED eldercare attorney about this matter. It’s complicated, not a DYI task.
This may be true in some states but not everywhere. As long as it’s done on the up and up, taxes paid on wages, wages reasonable and a contract in place it’s completely acceptable in many places. In fact in some states there are programs that will pay a family caregiver when the elder qualifies for assistance.
Paid for doing what? Paid by whom? Giving money to family is considered gifting. Let us make up a pretend situation: Mom wants to go into Nursing Home and has only 5,000.00 to her name. She needs to apply for medicaid and is told that she has to "spend down" to 2,000. So Mom decides that the family can repair the roof on her home and she will pay them 3,000 to do it. No, this is very unlikely to pass muster. I always hope that Igloo here is around to answer these questions. Medicaid rules vary state to state. It isn't a good idea to accept any opinions of a Forum on Social Media in the instances of medical, legal, financial advice. Do call Medicaid for your own State with your own questions as mistakes in this realm are costly in the extreme. Mom can begin her spend down on her own needs. She can hire a contractor to fix that (pretend) leaky roof, get a new walker. New glasses. Dental work. Things she needs. Or she can spend down by going into care private pay and spending the money on her care until it is gone, then applying for medicaid. Call medicaid for your State with your questions, and wishing you good luck going forward.
1. there is a legal contract done, witnessed & notarized
2. they are being paid market rates for their work
3. taxes and other household employees responsibilities are being done, So paid on 40 hr work week, W-2 done, FICA done and reported, workmans comp insurance in place. Mileage log done if they are running errands and paid at current federal mileage rate.
If in-home caregivers r being paid $11.45 an hr in your city, then family member paid $11.45 hr. Elder cannot pay them $82.50 hour.
The only way to pay beyond the lower wages that caregivers are paid, would be if they are an RN or other licensed medical professional and they can show that this is what their wages were before they quit their old job to become FT caregiver for a family member.
Spend downs can be sticky to do. If the elder has $, really find a CELA level of elder law attorney and go over with them as to how Medicaid reviews applications in yiur state and what type of legit spend downs can be done with the elders $ and do this way way way ahead of ever filing for Medicaid.
Some rules may say if you just pay someone for services, it could be considered gifting. If you have applied for Medicaid - talk to caseworker. If you have not, get an elder atty to set it all up for you (and give you the info on how to report the wages). Getting advice from people who may or may not really know could put your loved one in a penalty period before the Medicaid kicks it. Not worth the risk
IRs allows for now 16K annual tax free gifting. But Medicaid doesn’t.
Any gifting or transfer of an asset can give Medicaid the ability to place a transfer penalty on the application and the applicant will be ineligible for a period of time. There is someone on this forum that is having right now having to provide info on all $ over $200 for their husbands Aunt who is filing for LTC Medicaid in a NH. $200! If a states Medicaid program wants to have the bar set as low as $200, they can & will.
An elder law attorney can help with preparation of the contract to make sure it is in compliance with Medicaid rules.
It doesn’t matter what your justifications are, you cannot pay yourself or unlicensed relative for care as a Medicaid spend down strategy. Care must be provided by a licensed agency that pays taxes.
Pls see a CERTIFIED eldercare attorney about this matter. It’s complicated, not a DYI task.
Giving money to family is considered gifting.
Let us make up a pretend situation: Mom wants to go into Nursing Home and has only 5,000.00 to her name. She needs to apply for medicaid and is told that she has to "spend down" to 2,000. So Mom decides that the family can repair the roof on her home and she will pay them 3,000 to do it.
No, this is very unlikely to pass muster.
I always hope that Igloo here is around to answer these questions.
Medicaid rules vary state to state. It isn't a good idea to accept any opinions of a Forum on Social Media in the instances of medical, legal, financial advice. Do call Medicaid for your own State with your own questions as mistakes in this realm are costly in the extreme.
Mom can begin her spend down on her own needs. She can hire a contractor to fix that (pretend) leaky roof, get a new walker. New glasses. Dental work. Things she needs. Or she can spend down by going into care private pay and spending the money on her care until it is gone, then applying for medicaid.
Call medicaid for your State with your questions, and wishing you good luck going forward.