Paying Family Members as Caregivers
Many people require extra help as they age. Sometimes, immediate and long-term care at a rehab or nursing home is needed, but caregiving needs are usually minimal at first before gradually increasing. For example, you might need help with housekeeping or preparing meals at first, and eventually with medication management or with bathing due to mobility issues.
Medicare provides coverage for home health care services for eligible individuals. Your doctor must certify that you need part-time skilled nursing care and have trouble leaving home without help. If you meet the requirements, Medicare pays the Medicare-certified home health agency. Medicare doesn’t cover housekeeping services, meal delivery, or personal care, such as bathing assistance. The first step is to talk to your doctor.
If you don’t qualify for Medicare home health, there are government programs families can apply to for assistance. For example, a VA program provides a monthly stipend to a veteran’s caregiver. The veteran must be enrolled in VA health care, have a service-connected disability rating of at least 70%, and require assistance with an activity of daily living.
Caregiving can be expensive. The cost of long-term care increases with the intensity and type of care. The average cost of nursing home care in Texas is $61,000 in a semi-private room to $85,000 in a private room. Around-the-clock care at home at an hourly rate of $20 would cost about $175,000 per year.
The high cost of care is why many people over age 65 or with disabilities apply for Medicaid benefits. But before needing long-term care Medicaid—24-hour care at home or in a nursing home—or when Medicare-covered home health is unavailable or insufficient, you might be relying on family members. And when more intense help is needed, you might be considering paying a family member for this assistance.
If you are considering paying a family member, be careful about how this is arranged. Caution is needed because if you later apply for long-term care Medicaid benefits, you must disclose in your application all transfers of your assets made within the last five years, including transfers to family members that were intended to be compensation for caregiving. The State might decide the transfers were not compensation, but gifts, and if so, you will not qualify for full Medicaid benefits. This means you’ll be paying out of pocket for the room and board cost of a nursing home for a length of time that’s based on the amount transferred.
Texas doesn’t allow compensation for services that it judges would “normally be provided by a family member,” including lawncare, house repairs, shopping, meal preparation, laundry, and driving you to doctor appointments unless these services are provided in the normal course of business the caregiver is already engaged in. Future compensation is also not allowed.
To try to avoid this pitfall, put into place a written contract outlining the care and compensation at the start. Assistance with activities of daily living like toileting, bathing, dressing, helping you out of bed or a chair, and/or medication management, physical therapy exercises, and assistance with medical devices are more likely to be considered compensable services. Caregivers must document the services provided when they were paid.
Even if all the above had been in place and can be well documented, there is no guarantee that, upon reviewing a Medicaid application, the State will allow the payments and instead will treat them as gifts. Seeking advice from an experienced elder law attorney is a prudent step to take if you are considering paying family members for caregiving.
You may visit our website at www.wrightabshire.com. Nothing contained in this publication should be considered as the rendering of legal advice to any person’s specific case but should be considered general information.