By: Sarah Stewart Legal Group

Caregiving can be a thankless job.  As the U.S. Baby Boomer populations ages, more and more people are becoming caregivers for their aging family members.  According to the AARP and the National Alliance for Caregiving, in 2015, about 13% of the population were caregivers for adults or children within the previous 12 months of the survey.

Caregivers often work full-time jobs and struggle to balance their own lives and families with the often additional full-time job of caring for their family member.  They usually receive little or no compensation for their time, and often pay out of their own pockets for their loved one’s needs.

If you are a caregiver, how can you ease the financial burdens that come with the territory of caring for your loved one?

An option for those who care for adults who receive some sort of benefits or income may be a caregiver agreement where a caregiver can be reimbursed for time and money spent caring for their family member. If these agreements are properly drafted, they can be used to “spend down” funds to qualify for Medicaid when the person receiving the care needs to.

If there is no agreement, any payments made to the caregiver may be seen as a “gift.”  In Oklahoma, the Medicaid “look-back period” is 5 years.  That means if any money or items were given to someone in that time period that are not subject to an exemption defined by the state, it could be counted against the individual trying to qualify for Medicaid or other benefits as a current asset.  That means the person seeking funding will have to wait until that money is “spent” down to the Medicaid qualification level to qualify.

Requirements for Caregiver Agreements

The agreement must be in writing and must be specific about the types of work the caregiver will do.  Will the caregiver be running errands? What kinds of errands?  Where is the loved one needing care living?  If with the caregiver, is the caregiver charging rent to the loved one?

What other, additional services will the caregiver provide?  Is the caregiver paying the bills for the family member?  Are they maintaining or repairing the house the loved one lives in?

Log Your Time and Expenses

Once you have the agreement in place, be sure to keep a detailed log of the time you spend providing the services.  If you pay for something out of pocket and want to be reimbursed, keep receipts. Keep records of the income you receive.  Payments to caregivers are generally counted as taxable income for tax purposes.

When caregivers assist their elderly family members, they are providing a benefit to the family member and the government by allowing that person to stay in their home for a longer period of time and decreasing the amount of care the government will have to pay for for the elderly loved one.

If you are in a situation where you can benefit from a caregiver agreement, reach out to a professional today!

These documents have strict requirements that must be met to ensure your loved one can qualify for government benefits when they need them. Do not try to do this on your own!