About 40 million people in the U.S. are full or part time caregivers for a member of their family. Two thirds of these caregivers are women and half of these women are working outside the home to provide for their families.
Unfortunately these caregivers often have to reduce their working hours or quit their jobs to provide the care that a family member requires. As a result they often lose seniority or a reduction in their retirement or social security benefits because of their decision to leave the workforce.
AARP has reported that these family caregivers spend an average of $7000 per year on out of pocket expenses to care for their family member. . For patients with dementia the costs exceed $10,000 per year.
But there are alternatives for caregivers to get paid legally for providing care to an aging parent or other disabled family member. But the steps to initiate this process must be followed carefully to avoid problems with the I.R.S. or Medicaid qualification in the future.
- First the person receiving care must be of sound mind and have the financial resources to afford the cost of this care. If that person went to a professional agency to receive care they would likely pay $25/hour or more.
- Wages and paydays, schedules, sickdays, and respite care must be discussed between the parties realistically to avoid any misunderstandings in the future.
- A contract between the caregiver and their family member must be drawn up that details all of the above issues just as if it were with an unrelated professional.
- An eldercare attorney familiar with such arrangements should be consulted to review the contract to make sure it meets tax and legal requirements. If he or she recommends that FICA taxes be paid a payroll company should be hired to handle the details. Income to the caregiver must be reported as taxable income.
- The care recipient and caregiver should host a family meeting so all family members become familiar with the situation and can accept it. There is nothing like the grumblings of a dissident sibling to destroy a good working relationship.
- The caregiver and recipient should meet periodically to determine if the arrangement is working to the satisfaction of both parties.
If these steps are followed carefully aging parents can compensate their family caregivers legally for the time and effort they spend providing support.
Original article can be found here.