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Dad (85) with COPD and Mom (83) with Alzheimer'sour. Payments for 16 to 20 hrs. of daily care. We don't want to go the Nursing Home route at this point so we handle everything from A to Z. I am trying to devise a contract for our services between them and us while we still can.
Is there a gentle, simple way to do this???

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Jeanne is spot on in her suggestion to you.

If you find that they are reticent in paying you both, I'd contact 2 home health agencies to come to the home to do an evaluation and costs estimate for providing care. You use these to validate to them why you & hubs should be paid a fair rate based on community standards & your level of training. You also need to be realistic on the balance of fair wage based on your education (like you are a RN you can be paid more but otherwise it's lower wage) and other compensation you get from the situation (free room & board)

You all being paid for 20 hrs a day each, that seems excessive imho.16 hrs as well - so you have no off time? You never go to a store, or church, or read a book or go on-line.....Someone who needs 16- 20 hrs a day of care probably needs skilled nursing care in a facility. I bet this would be an issue for Medicaid later on.

If caregiving gets beyond your capabilities, they are going to need NH. If they need Medicaid to pay, expect to have to document to the penny their $ for 5 years. In order not to ever have to worry about needing Medicaid to pay for NH, they would need mid 6 figures liquid a$$ets.

Schedule that elder law visit soon.
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I suggest that you consult an attorney that specializes in Elder Law to have a simple contract drawn up. It is especially important to get all the T's crossed and I's dotted if you have any siblings and/or if it might be necessary to apply for Medicaid down the road.

As for how to tell them (I assume that is what you need to be "gentle" about), that depends on their level of comprehension. Keep it simple and factual. Do you anticipate objections?
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