My family has been paying my cousin to take care of my grandmother 24-7 , she lives in the house with her. She has been getting paid 5,000 a month for doing this with the reverse mortgage we took out, We are going to have to put her in a home and now some people have told us we should have paid her taxes and ssn, and we had agreed she would take care of this like it was her own business. Should we have been paying these. We also had someone tell us that if we payed her and she claims her own taxes that we have to supply workmans compensation insurance. Should we have been doing this as well?
Hospicevsfamily, please note that the vast majority of grown children are not paid to be caregivers unless the elder can pay from their own retirement fund. Usually this is our first rodeo where a paid caregiver normally has a lot of experience and is knowledgeable on such matters as dementia.
This being said, Jeannegibbs' "bigger picture" question is a good one. For all of you who think there is any chance you may need to apply for Medicaid down the road on behalf of a loved one, it is essential that your loved one (or, more likely, you, on his/her behalf) keep METICULOUS financial records to justify payments (not gifts) from your loved one to any family member.
I'm not an elder law attorney, and I agree that it would be a good idea to consult one ... but in terms of keeping records, common sense suggests that it would be wise to include the following:
- receipts for anything you bought for your loved one that they reimbursed you for;
- bank statements (in the case of a paid caregiver, showing regular, fixed payments);
- cashed checks or copies of same (preferably with the reason for those payments written on the memo line);
- your personal tax returns and/or a copy of the 1099s you've filed showing that you reported the money paid as income to the recipient (preferably at the end of each year that services/payment occurred, not all at once in a bunch just before applying for Medicaid);
- a written account of what all money paid to a family member was used for (i.e., "live-in caregiving service for grandma"); and
- possibly even a signed contract/agreement between you and the family member being paid laying out your agreement as to what services he/she will be providing and how he/she will be remunerated for those services.
I'd also anticipate that the government might want to review the tax returns of the paid family member to ensure that he/she reported the money paid as "income," and possibly even that he/she listed his/her professional occupation (or one of them) as "caregiver."
Basically, be very sure AS YOU GO that you are doing everything you can to distinguish "gifts" from either payment for services or repayment of monies expended on your loved one's behalf (with the understanding that these would be repaid). Even then, I don't know how Medicaid will view such expenditures ... but protect yourself and your loved one as best you can; don't assume you can just "explain" later with no documentation.
I think that seeing an attorney who specializes in Elder Law would be a good bet at this point.