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The risks of using non-professional home caregivers

Caregiver

Many of our clients seek to stay home for as long as possible, without entering an assisted living facility. This is perfectly understandable, and we use our firm’s skills to allow them to accomplish this objective as long as they can remain safe in their home.

However, sometimes in order to remain at home, seniors will look for in-home assistance. We see three circumstances in which this can be dangerous for the senior.

First, not enough care is being delivered. Occasionally, a senior may believe they only need someone to do a little shopping, cooking, and cleaning for them. However, this is not always accurate, and the senior may need a lot more care. The test we use to determine what level of care the senior really needs is to ask a question: “If the house is on fire at three in the morning, is the senior going to be able to get out?” An honest answer this question will determine whether or not the senior has enough help. Shopping and cleaning are one thing, but sometimes a senior needs 24/7 care but may be reluctant to pay for such a large amount of care.

The second problem we see is that oftentimes care is provided by third party caregiver but the caregiver is a fly-by-night — the caregiver does not come through an agency, is not insured for workers’ compensation or liability insurance, there is no training of the caregiver, there is no regulation of the caregiver, there is no written care agreement, and nobody withholds the caregivers taxes as is most often required by the IRS. For instance, if the caregiver injures themselves in your home while helping you, they can sue you, and quite often the caregiver is not trained to handle the appropriate lifting and moving that the senior requires. Moreover, Medicaid will doubt the authenticity of the expenditures to the fly-by-night caregiver because there is no written contract or agency, and without a withholding of taxes the tax liability for the un-withheld taxes can be shifted back by the IRS to the employer, who is the senior. It is for this reason we recommend all seniors hire their help through a qualified private duty care agency.

Finally, seniors will rely on their children to give them assistance. Sometimes, they will go so far as to have the child move in with them to deliver more care. Often the child will quit their job or reduce the amount of hours they work just to help the senior. Because of this negative financial impact on the child, the parent wants to pay the child for their time. There is nothing wrong with this but the problem that we see is that payments made to a child are viewed by Medicaid as gifts rather than compensation because there is no written contract between the parent and child. If Medicaid assumes these payments are a gift it creates an eligibility problem, or a penalty period. Another problem is that the child and the parent will co-mingle their expenses, so there are no clear records as to what expenditures by the parent were for the parent and what expenditures for the child were for the child. Again, the co-mingling of funds can make it look to Medicaid as if the parent was making gifts to the child rather than reimbursing the child for advances and costs the child has made on behalf of the parent.

In conclusion, you may stay home as long as you can, but you need to have the appropriate private duty home care agency with a written care contract in place. If you are relying on your children for this help you must keep meticulous records and withhold taxes when you retain someone to assist you, even if it is your child. Again the reason is that there is a fair assumption that the senior who is receiving care at home may ultimately need care in a facility somewhere down the road. Medicaid eligibility for long-term care in a nursing home is essential. Don’t disqualify yourself for Medicaid eligibility by being sloppy with home care giving. Remember Medicaid eligibility for long-term care nursing home can be worth the equivalent of $8,000.00 to $10,000.00 a month Chicagoland area. Preserve your qualification for these benefits.

To contact me, call 847-292-1220, e-mail abferraro@abferrarolaw.com or visit http://www.abferrarolaw.com.

About Anthony B. Ferraro

Anthony B. Ferraro is the founder and managing member at the Law Offices of Anthony B. Ferraro. He received his Bachelor of Science degree in accountancy from DePaul University and his Master of Science in taxation. After receiving his CPA designation in 1978, he enrolled in law school, earning his Juris Doctor in 1983 from De Paul University. An elder law practitioner, his practice areas include Medicaid planning and applications, guardianship, probate & trust administration, long-term care planning, nursing home contracts and admission, senior estate planning, special needs planning, estate planning, and estate taxation.