Caregiver Contract

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Caregiver Contract

A Brief Introduction About the Caregiver Contract

A caregiver contract agreement is generally used as a way to hire a person or nurse to take care of some other person in exchange for payment. The caregiver could be a personal friend or family member, and determining the patient’s condition, is recommended for being a licensed nurse. The caregiver is, in general, required to give balanced meals, clean the room or home, housekeeping responsibilities, running everyday jobs, and personal care requirements. In case the patient is conscious of their surroundings, there is typically a companionship with faith that forms over time.

In case the caregiver that is being hired is a family member or a friend that shall be living in the same house, there might be tax advantages towards the employer. If the caregiver is hired to “look after” the patient and spends not more than 20% of their daily living actions caring for the patient, then the caregiver might not be eligible for minimum wage.

Thus, if someone is in the area that requires housing, and the patient requires only limited support, this could be an economical way to give care for an elderly family member.

Who Takes the Caregiver Contract?

A caregiver agreement is  made typically between a family member who agrees in the direction of providing caregiver services for a disabled or aging relative and the individual receiving care. This agreement can also be termed as personal care agreement, which is most commonly made between an adult child or and his or her parent, but other relatives might be involved, for example, an adult grandchild caring for a grandparent.

By making a caregiver agreement, it clarifies for a family what errands are expected in return for a stated payment. It could help avoid family conflicts about who shall provide care and how much money shall change hands. For this purpose, the agreement must be discussed with other family members to resolve any concerns before an agreement is drafted.

Purpose of the Caregiver Contract

A caregiver contract is also known as a personal care agreement, which makes certain that all the family members are on the same page when it is about a family caregiver’s duties. A caregiver contract generally protects and assists the families to avoid any future conflicts relating to care.

When contracting with a family member, it is advisable to treat the caregiver agreement as a legal document. In case your relative is receiving state-supported in-home care, the agreement shall show the state where the fund is going and for what kind of services. Also, a caregiver agreement could offset potential confusion amongst family members concerned relating to bequests to heirs, and avoid misunderstandings later over the lessening of the sum of money that might be inherited.

Contents of the Caregiver Contract

In your caregiver contract, you may probably want to discuss:

  • Work done: The bulk of your caregiver contract must discuss the work to be carried out by the caregiver. Consider each of the possible tasks that are or might become necessary to care for your elderly loved one. Driving towards the grocery store, cleaning laundry, cooking dinner, and administering prescription drugs are all general examples of work towards being completed by caregivers.
  • Caregiver’s responsibilities: The contract must specify the caregiver’s responsibilities, which could be anything from driving to doctor’s appointments as well as attending the doctor’s meetings to grocery shopping to assist with paying bills. The length of the term of the agreement is usually for the elder’s lifetime, so it is vital to cover all possibilities, even if they are not presently needed. The contract could continue even if the elder enters a nursing home, with the caregiver performing as the elder’s advocate to make certain the best possible care.
  • Compensation given: After the work potentials are established, you should consider how much compensation the caregiver must receive and at what intervals. Family members shall sometimes agree to minimal amounts of pay, but you must consider paying at least minimum wage to decrease the chances of a legal issue later.
  • Duration of care: A caregiver agreement consists of whether the caregiver is agreeing to take care of the elder until further notice, or will the contract end in a year or so.
  • Medical emergencies: A caregiver must be given specific instructions relating to how to react during a medical emergency concerning the elder. Failing to comply with those instructions may place liability on the caregiver if the matter escalates towards an injury claim later.
  • Taxes: You should keep in mind that there are tax consequences, as well. The caregiver would have to pay taxes on the income they receive.
  • Other sources of payment: In case the elder doesn’t have adequate money to pay his or her caregiver, there might be other sources of payment. For example, a long-term care insurance policy might cover family caregivers. Also, there might be state or federal government programs that pay compensation to family caregivers. 
  • You might also want to comprise language in your contract that discusses legal responsibility in accidents or unexpected incidents. Caregivers are generally immune to liability unless it could be shown that they acted negligently, irresponsibly, or maliciously while caring for their elder.

How to Draft the Caregiver Contract

The basic Components of a Caregiver Contract are;

A Caregiver Contract has three basic requirements for an individual to pay a family member for care:

  • The caregiver agreement should be in writing.
  • The payment should be for care provided in the future (not for services already carried out).
  • Compensation for care should be reasonable. This means it must not be above what would be paid towards a third party for the same care in your state or geographic area. Tasks carried out should must “reasonable” or “customary” fees usually charged for those services.

A properly drafted Caregiver Contract shall contain:

  • The effective date the care begins
  • Detailed description of services that shall be provided, for instance, transportation and tasks: driving to medical, dental, adult day-care, as well as other appointments, food preparation
  • How often services shall be provided (permit for flexibility in care requirements by using language like, “not less than 20 hours a week” or “up to 80 hours a month.”)
  • How much and when the caregiver shall be compensated (whether weekly or biweekly)
  • How long the agreement is going to be in effect (The agreement must set time, like a year or two years, or even over a person’s lifetime.)
  • A statement that the terms of the caregiver contract could be modified only through mutual agreement of the parties in writing
  • The location where services shall be provided (residence of elder/adult with disabilities, caregivers own home, or any other location.)
  • The contract must be signed by the individuals; also, the date of the agreement is required to be mentioned in the contract.

Negotiation Strategy

While numerous individuals are willing to voluntarily care for a loved one devoid of any promise of compensation, a rising number of families are entering into caregiver contract. This contract is a formal agreement made amongst family members to compensate for an individual providing care.

An appropriately drafted Caregiver agreement must contain provisions relating to the type of care, location of the care, terms as well as frequency of compensation, length of the contract, income tax reporting concerns, and provisions for modification or termination. Contracts, along with family members, are also considered as legal documents.

Benefits and Drawbacks of the Caregiver Contract

The benefits of a contract are;

  • Lower Cost: A considerable sum of money could be saved by using single live-in caregivers instead of 24-hour care provided through the way of two or three-shift personnel.
  • Easy Transitioning: The live-in program is perfect for recovering from wound or illness as it avoids the nervous periods during which shift changes are happening.
  • Better Communication: The care recipients’ family members like talking to a single caregiver when they call for updates on their loved one’s wellbeing
  • Greater Reliability: The live-in program consists of greater bonding amid the care providers as well as their patients. In the past, it was shown less turnover in caregivers than in live-out relationships.

The cost-savings acquired in live-in arrangements make in-home care a stronger, more dependable living option than assisted living facilities.

Drawbacks of a contract are;

There are several misconceptions relating to live-in care, which includes what is legal in terms of working hours as well as payment. Many individuals still adhere to the myth that they could get a caregiver, maybe a foreign student, who shall work for free room and board. Others consider a live-in caregiver must be at their beck and call day and night. Such circumstances and caregiving situations are illegal, and each state has dissimilar rules and regulations for live-in care.

The important thing you must consider that if you are hiring a live-in caregiver privately, most of the lawful regulations disappear. For the most part, policies impact home care as well as referral agencies.

In a few states, the time a caregiver spends resting and sleeping during the night is permitted to be deducted from the overall cost

Many caregivers could be employed to avoid paying overtime and lessen overall costs. This hiring practice, calls for the administration of several people, increased scheduling, and could cause greater confusion in patients.

What Happens in a Case of Violation?

In the contract, both parties can breach the contract and are required to give a certain amount of notice, as agreed upon. The law relating to family caregiving agreements is moderately new and complex, and failure to follow the law could result in the rejection of your Veterans’ benefits claim or potential Medicaid penalties.

Families looking towards entering into a Caregiver Contract are required to be aware that few states need caregivers to be state-certified in-home care aides. A legal representative who is familiar with elder law concerns must be consulted to discuss whether this kind of agreement is suitable under the circumstances, and help with the preparation of the agreement. If there is a failure to consult with an attorney and have a sound, lawful, written agreement ready may lead towards disastrous results in these situations.