Paying a family member to care for you: personal care agreements and Medicaid
How to pay a relative for care in a way that doesn't look like a gift to Medicaid.
Many Caribbean families take care of their elders at home, and sometimes a parent wants to pay the daughter or son who gave up work to do it. That's fair. But to Medicaid, money given to family without a written agreement can look like a gift, and gifts can cause a penalty later, especially for nursing home care.
What a personal care agreement is
It's a written contract between the parent and the caregiver that says:
- what care will be provided (meals, bathing, medications, rides to the doctor);
- how many hours;
- what the caregiver will be paid, at a fair, local market rate.
Rules that make it hold up
- Put it in writing before payments start. Payment for care already given, in the past, is usually treated as a gift.
- Pay as the care happens (weekly or monthly), not as a big lump sum.
- Keep a care log of dates, hours and tasks.
- Report the income. The caregiver usually needs to report payments for taxes.
- Pay a reasonable rate, close to what an agency aide costs locally.
How it fits with CDPAP
If the parent qualifies for Medicaid home care, CDPAP can pay the family caregiver directly, with no private payment needed. A personal care agreement is most useful:
- before Medicaid kicks in;
- for help Medicaid doesn't cover; or
- for a spouse, who can't be a CDPAP aide.
Why it matters
New York has a 5-year look-back for nursing home Medicaid. A 30-month look-back for home care has been passed but hasn't started yet. Payments under a proper agreement are a fair exchange, not a gift, so they shouldn't cause a penalty.
General information, not legal advice. Have an attorney draft the agreement: Medicaid reviews these closely.