ARTICLES / Children / When
It's a Child's Turn to Take Care of... /
Other ArticlesBy David Cutner
Sometimes, siblings are unable or unwilling to help with caring
for Mom or Dad. It is easy to see that, when
this happens, resentments may arise and
relationships among brothers and sisters can become
strained. The Caregiver Agreement can minimize
these resentments and conflicts because the child
who is providing the care is being fairly
compensated for his or her time and effort.
Other siblings can then be relieved of their guilt
or embarrassment about not participating since the
caregiver child is being paid.
Legally, there may be a significant bonus for Mom
or Dad in creating a Caregiver Agreement. The
agreement can be a very useful planning tool in
cases where it is appropriate to seek assistance
from Medicaid. This is because Medicaid
eligibility is based on the applicant’s resources
(currently the applicant can have no more than
$13,800 in assets), and gifts or transfers of assets
may subject the applicant to a Medicaid penalty.
It may be possible and appropriate in some cases to
reduce the Medicaid applicant’s resources to the
eligibility level by funding a Caregiver Agreement
with a large advance payment, thus providing primary
care through Medicaid and supplemental care under
the agreement. Funding of the Caregiver
Agreement will not result in a Medicaid penalty (if
the agreement is properly prepared) because the
payment is a fee for services, not a gift or
transfer of assets.
To put this issue in context, it must be
understood that Medicaid will “look back” at the
applicant’s financial transactions over the five (5)
preceding years to determine whether the applicant
made any gifts or transfers. If a gift or
transfer occurred within the look back period, then
Medicaid will apply a penalty, which will be a
period of time during which the applicant is
ineligible for Medicaid benefits. In New
York, the look back period applies only to Medicaid
nursing home applications, so the home care
applicant does not have to worry about penalties if
he or she has transferred assets. In other
states, however, the rules may be different.
If you are thinking about entering into a
Caregiver Agreement, you’ll want to be aware of the
factors that will determine whether the agreement is
Medicaid compliant.
First, it is imperative that the agreement be a
formal written document that sets forth the duties
and responsibilities of the caregiver, and the
method of calculating the caretaker’s compensation.
Compensation should be in line with the fair market
cost of similar services in the same geographic
area.
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