How to Hire Your Kids to Take Care of You

job interview Long before the phrase "sandwich generation" took hold, seniors in declining health turned to children or other relatives for essential tasks such as cleaning, grocery shopping, doing laundry or driving to doctors' appointments. Now, a growing number of families put a price on such devotion though caregiver contracts.

As the name implies, caregiver contracts outline in detail paid arrangements between a parent and child, relative or anyone else in the caregiving loop. Among other things, a formal agreement sets forth the length of time and rate of pay for caregiving services, and the tasks to be performed.

While children who care for elderly parents is nothing new, tough economic times and the rising cost of nursing home care add appeal to paying them for doing so under a contractual arrangement. "These days many people can't afford to care for someone without getting paid, especially when they have to leave a job to do it," says Ellen S. Morris, an attorney with Elder Law Associates in Boca Raton, Florida. "For parents, paying a child or other relative can help them stay at home and provide assurance that they are not being a burden."

Caregiver contracts mushroomed with a 2006 change in the law that makes it more difficult for people to give away their assets to qualify for Medicaid. By spending down savings to pay for caregiving, elders can lay the foundation for Medicaid to pick up the tab should a nursing home stay be required. According to Morris, that's an important goal for about half of her clients who use contracts with family members.

They can also make it easier for veterans to qualify for certain benefits, says James Mullen, an elder law attorney in Bristol, Rhode Island. Under one program, some disabled veterans who pay a relative or other person for care can include those amounts as medical expenses, which may qualify for government reimbursement.

While formal contracts pave the way for receiving government benefits by setting important details in stone, Mullen says that suggesting them to family members often evokes an emotional response.

"The kids don't want to look like they are being greedy and some parents believe that children should care for them out of love, not money," he says. "But when I point out that a son or daughter is providing a valuable service, and often suffering a financial loss by taking time away from a job to do so, that sometimes changes their minds."

Putting things in writing can help clear the air among family members, says Morris. "There may be one sibling living near mom or dad who takes on most of the care giving responsibilities, while the rest live out of state. Having a contract and getting paid can help assure the caregiver doesn't feel resentful or taken advantage of," she says.

It's important to keep a number of issues in mind when considering a caregiver contract:

Taxes. To pass muster with Medicaid, the caregiver must be treated for tax purposes like a household employee, which means paying Social Security, Medicare and unemployment taxes. They'll also need a W-2 form.

Cost. Attorneys often draw up caregiver contracts as part of an estate plan, which can run several thousand dollars. If done individually, the charge for such a contract would be in the $750 to $1,500 range, says Mullen.

Payment. Like other employees, caregivers may be paid on a weekly or monthly basis. In some states, they can receive a large up-front lump sum payment based on expected earnings over the elder's lifetime according in IRS life expectancy tables or other independent source.

Experts stress that for Medicaid purposes it's important to pay no more than what a qualified professional would receive for the same services. Mullen recommends an amount comparable to what a private home care provider would charge, usually in the $20 to $35 an hour range, less a slight discount to be on the safe side. Compensation could be higher if a child is a registered nurse or other qualified medical professional and provides more expensive services.

While some legislators have attacked large lump sum payments as a loophole for spending down assets quickly, Morris says they are a valid form of compensation allowed under Florida Medicaid rules. "This is a valid contract for consideration in which the caregiver may receive far less than if payments had been made gradually. And the elderly person knows that care will be given for life."

In addition to personal savings families sometimes turn to state or federal programs that compensate caregivers. A growing number use long-term care policies, although such policies typically do not cover non-medical caregiver duties such as housekeeping.

Documentation. Mullen says it's a good idea to have an independent party such as a geriatric care manager come in one a month to verify that the caregiver is living up to the expectations of the contract. Caregivers should also maintain a daily diary of the duties they perform.

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I take care of my mother while my fathers is at work during the week. I earn my living from watching my nieces and nephews at my parents house and my parents pay for my insurances. It's a good trade and my mother gets to see the grandkids everyday. The big bonus is that I get to wear my pajamas all day. :) Although I could be making more money somewhere else, being able to be with the kids everyday is a true joy. I'm like the only person who gets excited to back to work on Mondays.

June 17 2011 at 4:24 PM Report abuse rate up rate down Reply

I think this is a great idea I worked for 15 years in home care and saw the BIGGEST NEED was the elderly or handicapped sure can use HELP familys work they have children they love there parents but it is a burden after a long time unless you are at the point where you are so fragile and can not do it all you need to stop putting this down ,

June 17 2011 at 2:32 PM Report abuse rate up rate down Reply

There appears to be a fine line between legitimately compensating family members who may lose a job to helping provide for an elderly relaive, and Medicaid fraud. Medicaid was supposed to help with people who did NOT have family help. I have MAJOR reservations about such activities, esp. if we are talking about people who are already on MediCARE, whether paying down assets to qualify for MediCAID is either legal or moral. And, as someone else has pointed out, this is one of those benefits only the relatively well-to-do can avail themselves of, by falsely rendering themselves poorer than they are. It seems, then, in large measure CONTEMPTIBLE if not actually illegal.

June 17 2011 at 1:38 PM Report abuse rate up rate down Reply

I am taking care of my dad who is 82 my mom passed almost 2 years ago. Dad had a stroke in 2001 and cannot drive, shakes so bad he has trouble with everyday tasks. He cannot make out monthly bills and draws only a little over 1000. mth. I quit to come to this small town to help them and then mom got sick. No jobs here my husband is legally blind and will one day completely loosehis site I take care of both of them and trust me wish I could make some money. We are living on combined income I have no health insurance and my husband and dad have medicare. I have my own health issues, diabetes, thyroid cancer and I talked to the va rep at the Lexington va and they told me my dad has to qualify for travel pay to get the aid and attendance. So I am at a loss at who to talk to. SS, VA, elder care it is hard to know where to go lol.

June 17 2011 at 1:35 PM Report abuse rate up rate down Reply

There is a program for veterans or spouses that send them checks to do with however they want to spend it ( home repairs, ramps for the home, pay for caregivers family or not) its to help the poor that served our country to keep them out of nursing homes, as you know most people on SS are under the poverty level or just at it. But whats hard is getting the right info you need (military ID #) and we dont have that it was lost in a house fire 40 years ago and getting it is hard, been trying for 8 months now

June 17 2011 at 12:01 PM Report abuse rate up rate down Reply

Sounds good... However, if you have Long Term Insurance, paying a relative with it is illegal
(at least in Cali).

June 17 2011 at 11:27 AM Report abuse rate up rate down Reply

You know ? a whole lot of the financial problems Americans are having today can be linked to the world globle market the experts told all of us here in America that to survive financially we would all have to succumb to whether we liked it or not ,but actually what it really was and is a way for the worlds richest filth is to sell less for alot more .Have'nt you noticed over the years how products you buy at the stores seem to get smaller and smaller for instance coffee used to be sold by the pound and then all of a sudden they announce coffee and other products will be sold by the ounce . If you remember this was years ago and it shows they had been planning this for years and then in 1998 or 99 President Bill Clinton signed N.A.F.T.A. into law and everything has gone to HELL EVER SINCE!. to make a long story short your government took your money and gave it to the filthy rich and the rich took all the jobs and your money and invested it all over seas in other countries to make them selves and the crooket government politicians who sold you and me out to the corporations alot richer. Corporations are no longer satisfied in just making a profit their more in line to make what is known in the South as a KILLING thats a hell of lot higher than a profit.example; Do you think the big oil corporations are making a profit or a Killing from their gasoline sales ? YOU DECIDE.

June 17 2011 at 11:14 AM Report abuse rate up rate down Reply
1 reply to rjturner313's comment

Small point: NAFTA was negotiated by George H.W. Bush and signed by Clinton. Its aim was to provide jobs in Mexico to keep Mexicans from flooding over the border.

June 17 2011 at 1:31 PM Report abuse rate up rate down Reply

Thanks all I'll look into this if just to help the sister that lives with mom, my other sister and I take a day every other weekend to stay with mom to help the one that lives with her. We want to stay with mom and DO NOT want her to go to a nursing home, she loves being at home and loves to just look at her flowers even if she cant tend them anymore, she has 14 grandchildren and they come and do yard work and any repairs that may need doing so this saves her lots of money.

June 17 2011 at 11:02 AM Report abuse +1 rate up rate down Reply

I've been a Home Care Provider for a number of 'clients' over the years. These people have come to depend upon people like me. Often, we go above and beyond the usual chores that need to be done...and often, we get caught up in the middle of family disputes. I try very hard to avoid these. Sometimes too, I see their family members take advantage of them, mainly by moving in and in turn getting them evicted. This tees me off no end.
However, there are those that come to truly depend upon our services and I for one will do the best I can to give my clients (and friends) the best possible care that I can give, no matter who they are.


June 17 2011 at 10:42 AM Report abuse rate up rate down Reply
1 reply to ldybg44's comment

I can understand where your coming from but like my sister ( age 63 )that lives with mom who's 80, My sister was working full time before this happened and now she is down to 20 hours a week she's very lucky her employers understand (she is a home care provider , private) my mom owns her home another lucky thing, my other sister and myself are paying for our homes and have young grandchildren that I help take care of. I lost my job in November for days missed due to caring for my mom, and no its not a burden we want to do it but the financial strain is wearing on everybody, as for homecare providers coming in to help with mom, her and dad have well paid for it both worked and dad served 2 tours of duty for his country. So what my mom draws is nothing compared to what they paid in.

June 17 2011 at 11:17 AM Report abuse rate up rate down Reply

to edwh001 -
If you haven't done so already, contact your local veterans services representative to see if they can help get your mom's VA benefits going. My sis-in-law is a Vet Rep & so many people don't know her assistance and expertise are available to them. Go to and click on your state - then find the Vet Center nearest you. Call or go to the Center where you will find a Vet Rep who can help you navigate the system. It's always better to have someone who knows the system in your/your mom's corner - and maybe can get things moving on her behalf. Your mom is lucky to have the 3 of you available & willing to care for her. Good luck.

June 17 2011 at 10:03 AM Report abuse +1 rate up rate down Reply

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