Personal Care Contract
If you provide care for an elderly parent or grandparent, creating a personal care contract is a smart idea. This contract provides a written, formal agreement that allows your parent to pay you for your services, without compromising their Medicaid eligibility.
At Brady Cobin Law Group, we have extensive experience helping clients navigate Medicaid planning and elder care. Contact us today at 919-752-3500 to schedule a consultation with our Raleigh, Cary, or Wake Forest, North Carolina attorneys.
What Is a Personal Care Contract?
A personal care contract, also known as a caregiver agreement or personal services contract, is a written agreement between a caregiver and the individual to which they are providing care. These contracts are common between adult children and their elderly parents when they begin caring for their parents on a part-time or full-time basis.
Personal care agreements:
- Allow family caregivers to receive payment for the time and energy they place into caring for a loved one;
- Safeguard the caregiver in the case that they need written proof of their services and payment; and
- Allow elders to spend down their assets in order to qualify for Medicaid.
What to Include In Your Caregiver Agreement
If you’re considering a caregiver agreement, working with an elder law attorney is essential. Your attorney can help you include all the necessary details in your contract to ensure that it is legally binding.
Here are a few elements to include in your personal care agreement:
- The caregiver’s tasks: First, the contract should list the work the caregiver will provide for the elder. Tasks may include administering prescription drugs, cooking, cleaning, picking up groceries, bathing, and driving the elderly person to appointments, to name a few.
- The frequency of services: The written agreement should include the number of hours per week the caregiver will provide services for the elder.
- The compensation provided: The contract should also detail the amount of money the caregiver will receive and the frequency at which the caregiver will be paid. This rate should be in line with the going rates for hiring professional personal caregivers in the elder’s area.
- Plans for medical emergencies: Finally, the contract should provide specific instructions about how the caregiver should respond to medical emergencies involving the elder. This section is essential to prevent liability in accidents and emergencies.
How Can a Personal Care Contract Aid Medicaid Planning?
Many people use personal care contracts to improve an elderly adult’s eligibility for Medicaid. Medicaid is a government-sponsored benefit program that can help pay for long-term care and skilled nursing services.
Medicaid applicants in North Carolina must have no more than $2,000 in assets in order to qualify for Medicaid. Some seniors attempt to gift their assets to family members to improve their Medicaid eligibility; however, gifts and transfers within Medicaid’s five-year lookback period will incur a penalty period during which the individual will pay the private pay rate at the facility. Caregiver services, when provided by a family member without a contract, are considered gifts and will incur that penalty.
When you execute a personal care agreement with an elderly parent, Medicaid will view your parent’s payments to you as a legitimate expense. As a result, your parent can lower their asset limit over time and improve their Medicaid eligibility, helping them qualify for Medicaid to pay for long-term care in the future.
Contact an Experienced Elder Law Attorney in Raleigh, NC
If you’re considering a personal care contract, our elder law attorneys can help. Contact the Brady Cobin Law Group today at 919-782-3500 to schedule your consultation in Raleigh, Cary, or Wake Forest, North Carolina.