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There is no care giver contract in place. Her goal is to keep him out of the nursing home for as long as possible. Since July he has required 24/7 care. He lives in her home.

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If someone has assets it is only fair for that person to use said assets to help pay for his own care, instead of having the taxpayers foot the bills.
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He has dementia, so no, he cant sign a contract. She has POA. You would have thought that maybe his own attorney would have thought of this months back when he had his will made out. We are just trying to figure out legal ways to spend down so the nursing home doesn't get all of his assets
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I'm sure a cleaver elder law attny would be able to figure out a way to make it work. If not you could always take it into consideration when drawing up the contract and increase the future payments enough to cover it.
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Oh my gosh, your daughter must be exhausted and ready to drop doing 24 hour care every day of the week. That is not fair to her or to her own health and well being. Note that 40% of caregivers die leaving behind a loved one. Not good odds.

As for getting back pay, is her Step-Dad still of clear mind to sign a Contract? If so, I can't see why not. But your daughter would have to pay back payroll taxes.

Why does your daughter want to keep her Step-Dad out of a nursing home? At least there the workers work 8 or 12 hour shifts, go home to rest, and come back to work refreshed. And if one is out sick, there are others to help out. Does your daughter have anyone to back her up in case she gets injured or ill?
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NOPE. Medicaid will consider it a gift if there is no contract.
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