Melissa, I am spending roughly 25 hours per week at my mother’s house caring for her, which means I am only able to work about 20 hours per week at my regular job. Twenty hours per week is not enough income. Can my mom pay me to care for her? – Laura
Laura, you are not alone in your struggle to try to be a caretaker for your mom while still needing to earn an income. My first piece of advice is that Mom should not start paying you until you and Mom have signed a Care Contract, also known as a Caregiver Agreement.
The second thing is that once a Care Contract is in place, you must follow the terms of the contract. If Mom pays you without a Care Contract or if you have a contract and do not follow the terms, then every payment Mom makes to you could be counted as a gift and cause Mom not to be eligible for Medicaid.
To prevent payments from being counted as gifts, the Care Contract needs to contain the following terms: (1) How many hours will you work each week in exchange for pay? (2) What is your hourly rate? (3) What duties will you perform? For example, meal preparation, transportation to doctor appointments, assistance with bathing. Finally, when Mom pays you under the Care Contract, you need to report these payments as income on your income tax return, just as you would if you earned the money at your regular job.
If Mom later needs Medicaid, a copy of your income tax return would be further evidence that these were payments in exchange for caretaking and were not gifts. We have years of experience in preparing Care Contracts and advising families how to navigate these challenging times.
Call today to set up a no-charge strategy session to find out how we can help with issues like this. To learn more, check out our website, ElrodFirm.com.