Sunday, March 01, 2015
QUESTION: Mom is having trouble living independently but would like to live in her home for as long as possible. Is there any problem with Mom paying a relative to provide care in her home?
ANSWER: Yes, there can be very negative results for Mom. The government assumes that family members will provide in home care because of “love and affection”, not for monetary gain. If Mom ever applies for Medicaid to help pay for long term care services, the payments to relatives will be treated as “gifts.” Medicaid will penalize Mom for making these gifts, prohibiting Mom from benefits she might otherwise be entitled.To avoid penalties, a “care contract” should be executed between Mom and the relative caregiver. Also, because the payments are income to the relative caregiver, he/she should be prepared to report the income on their income taxes.
Only an attorney well versed in Medicaid and long term care issues can provide proper assistance in creating a care contract that can avoid costly penalties. Contact us for all your Medicaid and long term care questions and make sure that you have the right answers to your questions.