Family Caregiver Contracts
Many children leave jobs, or forego work opportunities in order to provide care to aging parents. They may be paid for their help, but proper arrangements need to be in place.
Without an express agreement that spells out compensation arrangements, Pennsylvania law presumes that the services were provided by the child to the parent out of love and affection. If the parent later runs out of money applies for Medicaid long-term care benefits for nursing home care, the payments to the caregiving child can treated as gifts, and subjected to a transfer penalty. The transfer penalty means that Medicaid benefits are denied for a period of time.
Let Gerhard & Gerhard, P.C. help you avoid the denial of benefits with a properly drafted caregiver agreement. The payments must be reasonable in amount, and for a documented need. The payments are compensation to the child, and should be reported by that child as income for tax purposes. The agreement will be in writing and should be signed before a Notary Public. Retroactive payment for past services is generally not permitted.