Georgia Nursing Home Medicaid: Using a Caregiver Contract

We know that over 44 million people provide unpaid care to family members and friends to help them deal with a chronic or debilitating illness. This care is worth about $375 billion, and many caregivers are sacrificing wages and financial security to help their loved ones.  It is likely that you are one of these caregivers.

Paying a Family Caregiver

When a family member spends time caring for a loved one, he/she loses an opportunity to earn a wage or to pursue personal interests. This could be detrimental to the caregiver’s financial or psychological well-being. With only 24-hours in a day, many family caregivers feel stretched thin between work, family and caregiving responsibilities. Receiving pay for the time spent caring for a loved one can reduce financial and psychological stressors on the family caregiver.

Using a Caregiver Contract

If a family member is going to become a paid caregiver, this relationship should include a well thought out Caregiver Contract. The family caregiver should be treated as an employee with a formal agreement. The Caregiver Contract can prevent family disagreements, as the contract will lay out expectations, pay rate, how the payment will be made and details for the dissolution of the contract. Having a legal, binding agreement can prevent misunderstandings and aid in resolving conflicts. Additionally, the contract can avert any resentment that may develop if a care receiver decides to bequeath a larger portion of his/her estate to the caregiver rather than to other family members. Other family members may feel slighted when that happens; compensating the caregiver at the time of caregiving may avoid such issues.

Protecting Access to Public Benefits

In addition to helping a caregiver, a Caregiver Contract could help an older adult plan for public benefits and protect their assets. In most cases, transfers to a family member would trigger a penalty because of the 60-month look-back period. Transferring money to an adult child or other family member is allowed if the money is being used to pay that family member for care.

However, these transfers must be done using a Caregiver Contract. In the Medicaid world, the presumption is that if there is no contract in place, the family caregiver is providing care out of “love and affection.” Therefore, absent a Caregiver Contract, any money being paid to a family caregiver would be considered a gift or a transfer of assets when applying for public benefits.

Currently, for every $6,768 given away, an applicant will be disqualified from receiving one month of payment for Medicaid nursing home care benefits. If money is transferred from an applicant to a family caregiver pursuant to a formal contract (that is, a Caregiver Contract), the money is not considered a gift; it is looked at as a payment for services. (Note: This applies to Georgia Medicaid only; other states may have different rules.) Using a Caregiver Contract allows money to be paid to a family caregiver and not be considered a gift to that family member for Medicaid purposes.

In addition to helping to plan for Medicaid, the use of a Caregiver Contract can show Unreimbursed Recurring Medical Expenses for VA benefits. The VA has a special pension for wartime veterans and surviving spouses of wartime veterans. This benefit requires that the applicant be spending money on care in order to be eligible for the pension, and paying a family caregiver could count as that care expense. For more on the VA special pension, visit our website

Understanding the Fine Print

Using a Caregiver Contract requires thoughtful consideration and analysis of the older person’s situation. It is the right tool for many families, but there are some things to keep in mind:

1. Taxes and Social Security contributions must be made by the caregiver. Some families may consider hiring an accountant or payroll service to handle these details.
2. The Caregiver Contract must be specific about:

• Expectations (what tasks will the family member be doing)
• Pay Rate
• Methods of Payment
• Dissolution of Contract

3. The Caregiver Contract must meet legal muster in order to comply with the state’s Medicaid regulations. Consulting an elder law attorney is recommended.
4. The Caregiver Contract must be agreed upon by the caregiver and by the care receiver. It is also a good idea to involve all potential parties so as to avoid misunderstandings or conflicts later.
5. Caregiver Contracts cannot be made between spouses. Apparently caring for one another is a part of the “in sickness” vow spouses usually make. Caregiver Contracts can be made between parents and adult children, or grandparents and grandchildren, or aunts/uncles and nieces/nephews, etc.

The experts at Hurley Elder Care Law can help you understand if a Caregiver Contract is right for you and your family. We will discuss the options, create a customized plan, and execute each part of the plan with you. To start this process, please call our office at (404) 843-0121 or contact us through our website