If you have taken up the role of being a caregiver of your parents, you will soon realize how it affects the rest of your life. When you have a full-time job to maintain and a family of your own to take care of, being a caregiver to a parent can become difficult. As a caregiver, you have to make a huge sacrifice. You will have to extend full-time care to your parents that will only be possible if you give up your current job. Your entire day will be about carrying out commitments, which is why it is natural to wonder about compensation.

If you are wondering whether it is possible for the caregiver to get compensation in exchange for the services, the answer is yes. Compensating the caregiver is done through a formal agreement that exists with the approval of all the family members. Such an agreement protects the interests of the caregiver and has many names such as elder care contract or family care contract.  However, the most common name of the contract is the personal care agreement. In this article, we will introduce the reader to the details of drafting a personal care agreement and why it is important.

What is in the Personal Care Agreement?

A personal care agreement usually exists between the caregiver and the elderly receiving his/her care. While children usually take up the role of a caregiver, it can also be a separate individual such as a grandchild. The personal care agreement is similar to a usual contract. When drawing up the contract, it is recommended to seek the opinion of all the immediate family members. This ensures there are no unusual expectations for the future. The agreement includes all the roles and responsibilities of the caregiver to enhance clarity.

Why is a Personal Care Agreement Important?

The first and foremost reason why a personal care agreement must be in place is to benefit the caregiver. Most of the caregivers do not get any compensation for their years of service. This factor can lead to dissatisfaction and financial troubles in the life of the caregiver. As a result, the caregiver might give up on providing such support, which will be a difficult situation for the entire family. Moreover, if there is no personal care agreement in place, you end up hurting the elderly individual’s Medicaid eligibility.

Also, if compensation occurs without an agreement, the reduced inheritance at the end of the care receiver’s life could bring forward unexpected responses from the other family members. Therefore, a written agreement will protect the caregiver and create an understanding between all the people in the family.

What Does The Personal Care Agreement Include?

This agreement does not include a compensation plan for the services already rendered. Instead, the payment agreed upon in the document is for the future services. It is also important that the compensation is at a reasonable rate. The rate should not go beyond the fee that a professional caretaker would charge. It is recommended to treat the document as a legal agreement, which includes the following components:

  1. Details and descriptions of all the tasks that will be carried out by the caregiver
  2. The timings and frequency of the provision of services
  3. Compensation details of the caregiver (how much money the caregiver will make and how often)
  4. The duration of the agreement
  5. Conditions for modification
  6. Location where the caregiver should extend these services
  7. The date of the agreement’s creation, along with all the parties’ signatures

Other than these critical components, it is also advisable to add a termination clause, which gives the parties flexibility.

Moreover, rather than strict clauses, give room for flexibility so that both parties can make changes after reaching an agreement. You can also assign a backup caregiver in case you go on a vacation or make a commitment. All of these details are extremely important, as without them Medicaid might refuse to pay for any care services by regarding them as a “gift.” However, the terms of Medicaid vary across different states for which you might need help from a lawyer.

Benefits of Having a Personal Care Agreement

Many people feel there is no need to have an agreement in writing. When in reality, having a personal care agreement protects the right and interests of all the individuals. Apart from explicitly mentioning the terms and conditions of the agreement, a personal care document also has the following benefits: 

1.     Compensation

When you receive compensation as a caregiver, the sacrifices that you make for the role do not wear you down. You have the satisfaction that your family will receive a financial benefit out of this service. Even though many family members feel passionate about caring for their elders, they cannot take up the role of a caregiver. The role of a caregiver requires you to make huge sacrifices. Therefore, it is better to designate the role of a caregiver to one member and grant him/her compensation.

2.     Ease of Understanding

An integral part of the personal care agreement is the definition of the roles and responsibilities of the caregiver. With this precise definition of your role, you will be able to extend care in the best possible manner. You will know exactly how many hours a day/week you need to give to your new role. You can also suggest more terms that you want to add to the legal agreement. The personal care agreement defines boundaries, and the caregiver gains clarity regarding the expectations of him/her.

3.     Peaceful Relationships

Without a personal care agreement, siblings regularly fight over who is responsible for caregiving to their parents. Since such a document designates the responsibility to one individual and clarifies his/her role, many disagreements go away. The siblings understand the role of the caregiver and therefore do not feel the need to instruct. Also, since the caregiver gets compensation, he/she does not feel dissatisfaction over being the only one caring for the parents/grandparents.

4.     The Benefit of the Family

In cases wherein there are no caregivers, families hire outside professionals. However, if you choose to become a caregiver for your parents, you keep the money within the family. Moreover, it is also beneficial for the other family members to know that one of their own is responsible for the care of their parents/grandparents. Having a Personal Care Agreement is, therefore, a win-win situation that provides mutual benefit.

Useful Tips for Families

There is no doubt that the discussion of appointing a member of the family and compensating him/her can be difficult. However, instead of delaying the discussion, it is better to hold a family meeting to discuss all the relevant details. To organize a fruitful meeting, you must:

  1. Make sure that all the family members are present in the discussion.
  2. Decide beforehand if the elderly parent/grandparent will attend the meeting. You should do this after considering their mental health. If you feel that the discussion might upset them, it is better to carry out the meeting without their presence.
  3. Give importance to every family member’s opinion and thoughts.
  4. Decide whether you should take consultation with a health professional.
  5. Respect the wishes of the elderly parent/grandparent.
  6. Clarify how the compensation to the caregiver will affect the inheritance distribution.
  7. Arrange all relevant documents including:
  • Medical records of the parent/grandparent
  • Financial statements and documents
  • Compensation Plan for the professional caregivers in the same area
  • Care Assessment documents filed by a physician reflecting the level of attention required
  • Important Legal paperwork

One meeting might not be enough to reach a decision and draft a Personal Care Agreement. Therefore, one person should take up the responsibility of organizing such meetings. You can also choose to get the services of a facilitator from outside if there is no family member available. Having outside help can also prove to be beneficial since he/she is a neutral party. Family members might be more open towards agreeing to a date set by a facilitator. Hence, if issues are prevailing between the members of the family, hire a third party.

Bottom Line

Ensuring appropriate care for elderly parents is the responsibility of every child. Cases in which a higher level of care is necessary, appointing a caregiver becomes worthy of consideration. By compensating the caregiver, families can avoid a lot of confusion and reach a mutually beneficial situation. However, it is important to carry out the whole process in the right manner. Drafting a Personal Care Agreement is a way to protect the interests of the caregiver and clarifying everybody’s expectations. You can also seek help from a professional elder law attorney to help you come up with an agreement that protects all the parties.

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