Many people are willing to voluntarily care for a parent or loved one without any promise of compensation. Even so, a growing number of people are entering into caregiver contracts (also called personal service or personal care agreements) with their family members. Having such a contract has many benefits. It rewards the family member doing the work. It can help alleviate tension between family members by making sure the work is fairly compensated. In addition, it can be a be a key part of Medicaid planning, helping to spend down savings so that the senior might more easily be able to qualify for Medicaid long-term care coverage, if necessary.

The following are some things to keep in mind when drafting a caregiver contract:

Meet with your attorney.

It is important to get your attorney’s help in drafting the contract, especially if qualifying for Medicaid or VA benefits is a goal.

Caregiver’s duties.

The contract should set out the caregiver’s duties, which can be anything from driving to doctor’s appointments and attending doctor’s meetings to grocery shopping to help with paying bills. The length of the term of the contract is usually for the senior’s lifetime, so it is important to cover all possibilities, even if they are not currently needed. The contract can continue even if the senior enters a nursing home, with the caregiver acting as the senior’s advocate to ensure the best possible care.


Payment to the caregiver can either be weekly or monthly installments. For Medicaid purposes, it is very important that the pay not be excessive. Excessive pay could be viewed as a gift for Medicaid eligibility purposes. The pay should be similar to what other caregivers in the area are making, or less.


Keep in mind that there are tax consequences. The caregiver will have to pay taxes on the income he or she receives. The caregiver will also become the household employee of the individual.  So, it is a good idea to enlist the assistance of a CPA or payroll service to help with taxes.

Other sources of payment.

If the senior 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. In Indiana, family caregivers can be compensated through the self-directed care provisions of a Medicaid waiver.

Planning for Medicaid and navigating the Medicaid application process is complicated and can be daunting.  For expert assistance understanding Indiana Medicaid laws, contact Stinson Law Firm for assistance. Our Carmel Medicaid attorneys will guide you through the steps you should take to protect the family members you love.

How our Carmel Medicaid Attorneys Can Help

If you live in Carmel, IN, and need assistance handling the Medicaid process, the legal team at Stinson Law Firm can help. Our Carmel Medicaid Attorneys have helped hundreds of Indianapolis residents get through the Medicaid process. We can guide you through every step of your Medicaid process.

Let our Medicaid attorneys provide you peace of mind with care and compassion.

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