Can I Be Paid to Care for Mom?
In times of crisis, families pull together. Long term care is no different. So much of the care is administered by family members. And it doesn’t take too long before the question is asked. “Can I be paid to care for my mom or dad?” A recent New Jersey case decided by the appellate court makes it clear how tricky that can be.
Mom was 97 years old and in a nursing home. Daughter entered into a caregiver contract with Mom to provide care and was paid the sum of $56,000. This amount was based on daughter performing 15 hours a week at a rate of $25 per hour for 2.9 years, the life expectancy of a 97 year old. The payment was made and within 5 years of that payment Mom applied for Medicaid. The State denied her application, counting the $56,000 as a transfer for less than fair value, not a payment for fair value received.
We use life care contracts often in the cases in our office. But, we also know that the State will scrutinize those contracts very closely because when the payments are going to family members the State assumes that these transfers are “for less than fair value”, what most people would call gifts. They will then impose a penalty period, or period of ineligibility.
For example, the contract can’t be retroactive. If I have been caring for Mom for the last 2 years and now we decide that it would be a good idea for her to pay me for that care, Medicaid will flag that transfer. I had no expectation that I would be paid when I performed the services so I can’t change that now. There must be a contract in place going forward. I also can’t be paid an outrageous sum of money. Mom can pay me no more than what are fair market rates for the services I will perform.
So why didn’t our 97 year old Mom get Medicaid? We’ll explain that in next week’s post.