Personal Caregiver Contracts With Family Members

Working as a caregiver for a parent or loved one takes more than just time and energy.

Caregivers must balance work life at their day jobs along with taking care of their loved ones. In some cases, caregivers have to sacrifice time at work—or working at all—to help their loved ones. This sort of sacrifice hurts the caregivers as this results in lower wages and also lowers social security and pensions when they return to the workforce.

Serving as a caregiver is noble and rewarding work. However, this service is often without compensation or recourse of any kind. The sacrifices coupled with the financial strain for the caregiver can cause extreme tension in his or her relationship with the recipient parent or loved one, which could negatively affect the caregiving dynamic.

One way to alleviate this stress is to draw up a personal caregiving contract between the caregiver and the parent. Such a contract would spell out all of the duties and expectations of a caregiver and include language regarding compensation, which would pave the way for the caregiver to receive some fashion of compensation for his or her time. A contract would also spell things out for the rest of the family—spouses, siblings, children—who may feel slighted or misunderstand the arrangement between caregiver and loved one. Some parents choose to reward their primary caregivers in their estate. However, this may cause tension between siblings or will contests.

Another good reason to have a legal contract is to help the older adult qualify for Medicaid. If the older adult is planning to pay the caregiver, and there is no agreement in place, the payments to the caregiver will be looked upon as gifts. This will slow down the process of qualifying for Medicaid. Making a contract might not be an easy thing. The child, or caregiver, might look at this as a labor of love and not think about accepting money, or the parent might believe it is the child's duty to serve as a caregiver. Frank conversations about caregiving may be difficult, but all involved may actually feel relieved once it is taken care of. A contract contains time periods, terms of service and compensation for service.

Caregivers should be explicit in the types of duties they will agree to perform, such as driving their loved ones to doctor visits, shopping, cooking, or bathing. How much the caregiver will be compensated needs to be included. To decide the amount, the caregiver should call around the local caregiving agencies to see what the current rates are. If the older adult does not have enough money to pay his or her caregiver, there may be other sources of payment. A long-term care insurance policy may cover family caregivers, for example. Also, there may be state or federal government programs that compensate family caregivers.