When family is paid for care

In many families, care of an elder relative falls predominately to one person. This typically begins with assisting occasionally for a few hours, and it can be a very loving connection. But as the needs increase, so do the hours. While the care may be given willingly, it does eat into the care provider’s personal time and may force a cutback in his or her work hours.

Time is a scarce resource! It is fair and appropriate to compensate members of the family who provide reliable care.

The wisest course is to draw up an agreement. Putting everything in writing can go a long way toward preventing family discord or misunderstanding.

Elements to include

  • Types of tasks to be performed. Cooking, cleaning, transportation? What about intimate care, such as bathing or toileting?
  • A start date. Don’t arrange to pay someone for work done in the past. Decide on a start date and begin payments going forward.
  • Documentation of hours worked. And expenses, mileage driven, etc.
  • Rate of pay. How much and how often the family caregiver will be paid.
  • Clarification about time off. Is there vacation pay? What about sick pay? Who will provide care when the caregiver isn’t there?
  • A termination clause. How much notice will be given?

Taxes. The IRS says that a paid caregiver—even a relative—is an employee. See our March 2016 article about taxes when hiring a family member.

Consult with an elder law attorney. He or she can help clarify the issues and make sure that decisions made now do not jeopardize future government benefits.

Hiring a relative can be awkward. Be sure the risks to the family relationship are worth the benefits or convenience of hiring a relative. Remember the old adage, “Don’t hire someone you can’t fire.”