How can a granddaughter get paid for care giving to her grandmother, without medicaid later penalizing and considering the money a gift?

Medicaid is a medical benefit that allows the recipient to pay and hire a caregiver of their choice. The recipient is the "employer" and the caregiver will receive a W2 form at the end of the year for funds paid from the Medicaid benefit.

The Grand Mother is not eligible for Medicaid at this time. She is at home with 24/7 care required and is self paying for the care. We have been told that any money paid to a family member will be considered a gift and that amount will be a penalty against the Medicaid applicant. And the benefits will be withheld until the amount that is paid to family is self paid.

Each state is different and in my state, Michigan, expenses that a person pays to another person for any sort of services -regardless if it is a family member -is not considered a "gift" where they would end up being penalized by the agency responsible for doling out your State's Medicaid funds. Our elderly spend thousands on "assisted living" draining their life savings and then must apply for Medicaid to help pay for further "nursing" care in a facility.
I would contact your State Medicaid office to inquire if this is correct information. I apologize I did not understand your question before and thank you for qualifying it.

DeeDeeBug, you were told by whom?

There should be a personal care agreement in place spelling out exactly what the granddaughter is doing and what the compensation is. It must be treated as income by the granddaughter for tax purposes.

Im taking care of my friend and he is moving by me this next month he has low blindness, prostate cancer high bloodpressure and alot of health issues, can i get paid to take care of him

It is perfectly legitimate for you to be paid for caregiving services and your grandmother does not have to penalized for paying you.

In order to avoid Medicaid penalty, however, you must have a formal agreement in place. Known as a Personal Care Agreement or Personal Services Agreement you will essentially enter into a contract with your grandmother and become her employee.

The agreement should stipulate the rate of pay, the number of expected hours to be provided, the services being provided, and the term of the contract. It is also important that you keep a log of the hours and services being provided on a contemporaneous basis.

This contract can also be used as tool to move a lump sum in the event that grandmother needs to apply for Medicaid sooner rather than later. Rules allow for the contract to be satisfied in advance in one lump sum based on the variables mentioned above multiplied by her life expectancy.

This will be a taxable transaction to both you and your grandmother and some states actually require that the tax documentation be submitted as evidence of the legitimacy of the arrangement so you may wish to consult with a tax preparer as to what the employee/employer filing requirements are.

I had a stroke back in june 2016 have fabromalige and chronic pain and her grandfather has stage 4 colon liver and lung cancer my granddaughter came to us so see here and we're not a long she cleans cooking laundry take me to the doctors and the yard work we are both on disabled own disability

08/25/16.... Children and grandchildren normally are not paid unless the parent/grandparent can pay them themselves from their own savings. One would need to create an employment contract stating the number of hours work, the duties involved, the hourly rate, and who will pay the payroll taxes.

Now, if the parent/grandparent can qualify for Medicaid, and if that State offers a program where it will pay a relative to be a caregiver [not all States do this], then the child/grandchild could be paid... but note payment would be minimum wage for a few hours per week. The caregiver would need to be totally hands on.