smart spending

5 ways to find cash for caregivers

Should a parent pay?
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Should a parent pay?

A parent may not meet the requirements to qualify for government aid but doesn't want to deplete his or her resources paying a caregiver. Kaplan says the cost could amount to $20 per hour nationally.

Instead, some families draft caregiver agreements, whereby a family member who needs compensation is paid under a formal arrangement. "Sometimes a family member won't charge a market rate," says Kaplan.

A contract spelling out payments avoids potential problems should the parent ever need to apply for Medicaid, Kaplan says. Medicaid accepts elderly people for nursing care after they have run through their assets -- usually excluding their home. But before an applicant is approved, the program reviews his or her finances.

If checks are written to a family member without an agreement spelling out that the money is a payment for services, Medicaid will presume those transfers of money were gifts and will consider the applicant ineligible for a period of time, Kaplan says.

Hire an attorney to draw up a caregiver contract, says Michael Amoruso, a member of the National Academy of Elder Law Attorneys. An elder attorney should know state Medicaid rules, and can help establish payments with a payroll service that will withhold taxes. An attorney's fee likely will range from $3,500 to $7,500.




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