Saturday, June 27, 2009

Family caregiver contracts: a solution for some

The NY Times features an article about an arrangement some families are finding workable: when a son, daughter or other family member can be available for caregiving in the home, but can't afford to lose income, a caregiving contract can be drawn up between a parent who needs in-home care and that person.

Although the idea is somewhat new, it can make sense in a few ways, according to the article and elder law attorneys who were interviewed, since it is a legitimate way of providing in home care, while at the same time it allows the family member to continue to earn money for his or her own retirement.

Elder lawyers have been discussing care contracts or caregiver agreements for years, but interest has picked up since 2006, when Medicaid eligibility requirements tightened. As parents “spend down” their assets to qualify for Medicaid, which pays for most nursing home care, they face stiff penalties if they simply give family members money.

With a formal caregiving contract, however, elders can show that they were paying for services rendered, said Richard Kaplan, a University of Illinois law professor who has studied care contracts: “Money can be transferred to younger relatives without triggering a penalty.” Assuming, of course, that those relatives legitimately take on the task.


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