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I have been using my daughter and niece to watch Mom while I run errands but now my sister will be out of work and could help but will need money since she has bills to pay. Do I need to have Caregiver contracts on everyone? Who says you have to have one?

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You certainly don't "need" a Caregiver Agreement, but without one in place PRIOR TO any payments to a family member caregiver, such payments will be deemed gifts by the state Medicaid authority, resulting in a penalty (disqualification) period if the cared-for person applies for Medicaid within the next 5 years. Different states have different requirements as to what must be in the contract for it to be valid in this context. (I actually have a very detailed discussion of this in my book, with citations to some legal cases in a few states.)
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A caregiver contract/agreement if composed properly will document that any funds paid to the caregiver are not 'gifts', and therefore will not cause a Medicaid penalty. Dollars paid to a caregiver under the contract must be reported as income, however except for the taxes paid on that income, if care is given by famili members it can be 'recycled', to provide extended care for Mom /Dad.
The caregiver documentation will also serve to reduce income for VA purposes.
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ohmoondance: I think what I meant in the last two sentences was that, I am using my daughter, niece and sisters to care for Mom, so do I need a Caregiver Contract for each of these people. The bad thing is I do the lions share of all the work but it is my understanding I cannot be paid for my care giving because I am her POA. Not really fair when my entire life has been invested into her care at the expense of my daughter.
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A physician can write an RX. for home health care, it is that easy & you have been given some other advice above mine.
I can only speak as an R.N. who deals with this as a living.
So much depends on the state you live in as to the Medicare laws. Times are changing so fast with the Obama Care. What is here now may be gone tomorrow I am experiencing.
Your sister will have to become a certified care giver if you wish Medicare to pay her.
If $ is not a huge issue??
Do not jump on the legal train-$$$$
You can go to a Para-legal at a fraction of the price & get the same information.
Been there & I continue to do it.
I also am dealing with a husband with Solvent Dementia.

I do not understand your last 2 sentences. I can tell you the you make the decisions with the physician's help.
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FYI-I am speaking from, over 42+ years of experience if that is a requirement here.
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Atty Heiser and Decatur30033 and ohmoondance: Do any of you know how I repay myself for things I have purchased for Mom for the house, all her Christmas presents to the family for 2011 and 2012, medications, all legitimate expenses that I did not have her checkbook for and bought them and was suppose to pay myself back on. I am thinking if I write myself out a check now it is going to look like I am "gifting" to myself ....I do have all receipts, but it has now grown to around $3,000 which included paint to paint her house.
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I highly recommend getting an elder care attorney that knows the laws in your state. I got advice from one who actually helped write the Medicaid laws in my state so he is very knowledgable. In my state you can't go back and collect money for caregiving. But if you are owed money you loaned it may be different. He set us up with a caregiver contract that spelled out very specifically what I would do as a caregiver and how I would be compensated for it. I retired to provide my MIL who has dementia, diabetes, high blood pressure, AFib, and an IQ of 65 and constant extreme dizziness due to multiple strokes 24/7 care. It is now my job. I am paid for it and will file the income on my taxes. I am her POA and handle her finances. As long as you handle her finances legitimately and keep records of all expenditures you should be OK. But I would definitely go through an attorney to set it up. It is in my contract that I can use outside services to take care of her so that I can do things without her whether it is go to the store, medical appt., or just take a day off. The attorney can advise how to handle paying family members to stay with her. I take mine to an adult daycare a couple of times a week. She enjoys the activities and the socialization with others her age. The money comes out of her account.
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