You may be surprised to hear that giving up your life to care for an aging parent is becoming more common these days. For many, this is a time-honored tradition and duty, and people are living longer placing more families in a caregiving role.
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However, there are consequences to this decision, with a loss of income being the most serious and damaging over the long run. A Harvard University study found that of the employees surveyed, “about 32 percent of employees reported voluntarily leaving a job due to caregiving responsibilities.”
Multiple studies have shown that once someone leaves the workforce, they are hit financially and are unable to return to work with ease. For families that can afford it, paying a family member while providing care for an aging parent or grandparent makes sense.
One of the best ways to do so is by creating a personal care agreement. Having a personal care agreement formalizes the arrangement and provides other benefits as well. If you are considering developing this type of agreement, below we share tips on what you should look for in the contract.
What is a Personal Care Agreement?
A personal care agreement is a written contract between two people, one who provides care for someone and the other who is paying for that care. The person receiving care is often a family member, but not necessarily. The agreement could be between a private caregiver and care recipient. A personal care agreement is important for several reasons:
- It protects both the caregiver and recipient in case of disagreement or litigation.
- Many family caregivers give up careers or quit their jobs to care for someone. A care agreement offers compensation for their services and acknowledges the sacrifices they are making.
- Without an agreement, payment can be considered a “gift,” which can affect Medicaid eligibility.
- An agreement specifies tasks so that there are no misunderstandings.
The other significant advantage of a personal care agreement is that it can help alleviate conflict and discord in the family. While having long-term care planning in place can prevent this, resentment and disagreement is a common issue in regards to caregiving.
Many potential disagreements can be avoided by having a contract in place. Even with the agreement that specifies tasks, there may still be caregiver responsibilities that other family members have agreed to. It can be beneficial to put these in writing or on an online scheduling app to clarify other unpaid responsibilities.
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9 Things Caregivers Should Look for in a Personal Care Agreement
You are not required to hire an attorney to draw up a personal care agreement. That being said, if you are uncertain about certain legal aspects of the contract, it is worth it to have them review your suggestions.
Consider searching for an elder law attorney as they will be most familiar with the type of contract you are looking to create. If you don’t want to incur the cost of attorney’s fees, we have some tips on the things you should look for in the agreement. You can find personal care agreement templates and caregiver resources online to give you a head start. As a precaution, ask an attorney to review the one you choose.
1. The contract must be in writing
As they say in the healthcare profession if it isn’t in writing, it didn’t happen! As obvious as this might sound, the contract must be in writing. A contract is to protect you, and the client. A formal agreement of payment is necessary for tax purposes, liability, and Medicaid protection.
2. Services to be provided
The services that you are to provide to the person you are caring for should be spelled out. If you are unclear about what you need to do, ask for an evaluation by a geriatric care manager or home health agency. Getting this kind of assessment is like getting a home inspection. You don’t want to find out after starting that there are problems you were unaware of.
Meet with the family and the care recipient to go over all care concerns. Discuss legal documents such as advance directives and a living will. You certainly don’t want to be in a position of initiating life-saving procedures if that contradicts a “Do Not Resuscitate” (DNR) order. Be as specific as possible.
Ask what kinds of personal care responsibilities you will be handling, such as bathing, toileting, grooming, and dressing. If you are asked to provide complex medical tasks and aren’t comfortable with those, make sure you discuss the issue. Some states don’t allow professional caregivers to perform catheter changes, insulin checks, track vital signs, or give injections. State restrictions don’t necessarily apply to family caregivers, but you want to have a comfort level if you are asked to do some of them.
You will also want to ask your family members or the client about transportation to medical appointments. It is important to double-check regarding compensation for gas and mileage, and if you will be using your own car for these trips. It’ll save you a lot of discomfort later on.
Another important thing to consider is duties related to running the household. Will you be expected to manage finances and pay bills? If so, how will you gain access? Also, are you expected to do housekeeping, laundry, or even yard work?
Lastly, ask about managing medications. You may want to check whether your state even allows professional caregivers to set up medications. In the event you are asked to do so, make sure you are comfortable with the process. Older adults sometimes have multiple medications with complicated instructions.
3. Hours and schedule
Realistically, there needs to be some flexibility built into the hours and schedule since care needs could change. The best way to handle this is to indicate the minimum and maximum hours of service. If it looks as though caregiving hours are going to exceed what is agreed upon, let the family know so you can discuss options.
At that point, the cost of caregiving might exceed the cost of assisted living placement. A schedule of days and hours protects you and gives you time to pursue other things in your life that are important.
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4. Compensation and taxes
This part of the contract should cover your payment. Consider the hourly rate for professional caregiving in your area so that your compensation doesn’t exceed that or fall far short.
Discuss other compensation such as paid sick time, vacation pay, and any bonuses. How and when will you be paid? Also, who is responsible for taxes? If you are hired as an independent contractor, you will be responsible for social security and other taxes. If the person hiring you decides to be your employer, they will take tax payments out of your paycheck. If necessary, contact a tax accountant and discuss what would be the best scenario for you.
If you are living with the person you are caring for what is the agreement for room and board? Is room and board considered part of your compensation or are you expected to pay separately for that?
5. Back-up plan
A back-up plan must be in place if you are ill or can’t make your shift for some other reason. There are a couple of possible solutions. One is to discuss having another family member on call in the event you can’t make it. The other is to contract with a personal care agency to provide a fill-in caregiver.
Agencies are used to filling in with caregivers. Provide the agency with as much information as possible about the person who needs care so that a new caregiver will know what to do.
6. Termination or modification clause
Termination or modification are two separate issues, and the conditions upon which they are each used should be spelled out.
Typically, if either party wishes to terminate the contract, they have that right and can do so. If the contract is to be modified (for example, changing caregiving tasks, hours, or compensation), then both parties must agree.
7. Sign, date, and notarize
Don’t forget to have all parties sign and date the agreement. Some states require that the contract be notarized so check to see if this is the case where you live. Remember that your compensation starts when the contract is in place and you begin to provide care. You can’t be paid retroactively.
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8. Keep a care log
It is hard to overestimate the importance of this. Yes, it takes extra time, but consider it as part of your compensated caregiving time and note that on your log. You can even include the fact that you will do this in the contract.
The reasons to keep careful notes are many, but include the following:
- If there is any disagreement about what you did or didn’t do each day, keeping a detailed log with help. You may not even remember without writing down what task you provided.
- A log should also include not just what you did but the demeanor, mood, and cognition of the person you are caring for. This information can be invaluable for other family members who might be tracking medical and cognitive decline.
- If a family or other caregiver needs to fill in, they can review your notes to make a seamless transition.
9. Look up insurance options for legal issues
If you are a private caregiver hired by a family, you will want to ensure that they have liability insurance. Unfortunately, problems can and do occur.
You might be accused of stealing or abuse. It is worth investigating liability, workman’s compensation insurance, and disability insurance for yourself if this looks like a long-term job.
Drawing Up A Personal Care Agreement
A personal care agreement can be a win-win for everyone. You know what is expected of you, and the family can be confident that you will take good care of a loved one. Having an agreement in place doesn’t take the heart out of your caregiving role. In fact, it helps to honor you for the important work that you are doing and providing due diligence to track progress or changes.
- “How to Compensate a Family Member for Providing Care (Personal Care Agreement).” The Alzheimer’s Association, www.alz.org/media/greatermissouri/personal_care_agreement_(how_to_compensate_a_family_member_for_providing_care).pdf
- “How Personal Services Contracts Serve as a Planning Tool for Long-Term Care Medicaid Eligibility.” The American Council on Aging, www.medicaidplanningassistance.org/personal-care-agreements/
- “Creating a Personal Caregiver Agreement as a Family Caregiver.” AARP, www.aarp.org/caregiving/financial-legal/info-2019/personal-care-agreement.html
- “Personal Care Agreements.” Family Caregiver Alliance, www.caregiver.org/personal-care-agreements
- Fuller, Joseph and Manjari Raman. “How employers can help employees manage their caregiving responsibilities—while reducing costs and increasing productivity.” Harvard Business School, 17 January 2019, www.hbs.edu/managing-the-future-of-work/Documents/The_Caring_Company.pdf