Hiring a Caregiver - What You Don’t Know Can Hurt You
Judy was diagnosed with dementia four years ago. When Judy was first diagnosed, she made sure to get all of her affairs in order. Judy signed a durable power of attorney that appointed her daughter, Jill, as her agent to handle her financial affairs. Judy also signed a health care power of attorney appointing Jill to make health care decisions for her.
As Judy’s dementia progressed, Jill realized that she needed help caring for her mom. A friend suggested Jill hire a caregiver to stay with Judy while Jill was at work. Jill took her friend’s advice and hired a caregiver for her mom, but she did not have the caregiver sign a contract.
Eventually Judy’s needs increased to the point that she could no longer stay safely at home. Judy’s doctor suggested it was time to move Judy to a nursing home. Due to the high cost of the nursing home, Judy ran out of funds in the first year and Jill had to apply for Medicaid for her mom. Jill felt pretty confident that her mom would get approved quickly as she had always kept good records and never gave away any property. To Jill’s surprise her mom received a letter that Medicaid would not cover the cost of her care for another six months due to the payments she made to her caregiver!
Unfortunately, this is a situation we see all too often. A little known provision in the Medicaid manual penalizes payments for personal care services if certain requirements are not met. Jill thought she had done everything right. She never used any of Judy’s money for herself and kept detailed records of everything she spent on Judy’s care. Hiring a caregiver seemed like the right thing to do to keep Judy at home as long as possible.
If you are considering hiring a caregiver, there are some things you need to know. First and foremost, you must have a written contract for personal care services. The contract must meet the following requirements:
The contract must be signed by the service provider and the service recipient (or his or her agent) and must be dated;
The contract has to be entered into before services are performed;
Either party must be able to terminate the contract at any time;
The person receiving care under the contract must not be a resident of a nursing facility at any time during which services are provided under the contract;
The caregiver services must be recommended in writing and signed by the recipient’s physician as necessary to prevent the recipient from entering into a nursing facility;
Services cannot include providing companionship, visits, or spiritual wellbeing;
The contract must specify the type, frequency, and duration of the services;
The contract must specify the amount to be paid for the services; and
The amount paid cannot be greater than the fair market value for those services.
An elder law attorney can assist you to ensure that your caregiver contract meets these requirements.In addition, your attorney can guide you through the steps you need to be taking now to make sure that your loved one receives the care he or she needs.For more information, call Southpoint Estate Planning at (919) 225-7018.
