As your parents begin to age, you may be required to spend a good deal of your time overseeing and managing their care regimen. You may even want your loved one to come live with you so that their care can be more easily managed. One question that arises on a frequent basis is whether you should be compensated for the services that you provide to your sick parent. It is always wise to discuss any compensation strategy with all of your close family members, especially if you are dealing with your siblings.
In order to protect the distribution of funds from a parent for the services that you provide, it is wise to enter into a written agreement regarding these services. In this way, you can be certain that you will not be violating either the Medicaid rules or those rules which apply to the veteran's benefit known as aid and attendance. The care management agreement documents the payment to you as the caregiver which in turn substantiates the distribution to you for services rendered for fair market value. This agreement should delineate each and every service that you are to provide. This should include transportation, non professional medical services, daily living services, legal, banking and financial services. If in fact your parent is living with you, a portion of the agreement should deal with the use of specific space in your home. The fees that you charge must be reasonable! You should check with local service providers or in the alternative and assisted living facility to determine what they charge for their Lifecare. It is recommended that your compensation for services rendered should be less than those of the aforementioned service providers.
The amount that you are charging should be clearly stated. If your parent is unable to make a current payment, then you may wish to note that the compensation to which you are due will accrue to your benefit and can be paid at a point in time in the future when their home is sold or an asset is liquidated. Keep in mind that any compensation you receive will be subject to income taxes. The compensation is clearly unearned income. By saying that you are fairly compensated, it may make the caregiving duties more palatable. It will also clearly define what is a fair rate of compensation that has been agreed to among the family so that family discord can be avoided over the caregiving activity that you are providing.