How children can be paid for as a caregiver to their parent(s) – Part 1
This is Part 1 of a 4 part series of blogs on caregiving contracts to aging parents and children (including adult children) with disabilities.
Taking care of a parent can be a full-time job. Children may have to give up paying jobs in order to provide care to aging parents. Unfortunately, caregiving is usually unpaid work. Parents who want to compensate a child who takes on the burden of caregiving may do so in one of several ways.
Caregiver Agreements. Caregiver agreements are an increasingly popular way to ensure a caregiver child is compensated for the child’s work. A caregiver agreement (also called a personal care contract) is a contract between a parent and a child (or other family member) in which the parent agrees to reimburse the child for caring for the parent. These agreements have many benefits. They provide a way to reward the family member doing the work. They can help alleviate tension between family members by making sure caregiving is fairly compensated. In addition, they can be a key part of Medicaid planning, helping to spend down savings so that the parent might more easily be able to qualify for Medicaid long-term care coverage, if necessary. The downside to caregiver agreements is that the income is taxable. Note that such agreements require many details to be legall approved and should not be drawn up without the help of a qualified elder law attorney.
Fredrick P. Niemann, Esq. is a qualified elder law attorney who can help determine the right method to compensate a caregiver family member. You can contact Mr. Niemann by calling (732) 863-9900 or via e-mail at fniemann@hnlawfirm.com/.