Picture this… Your elderly parent or loved one has been living at home, but they cannot completely care for themselves. They might need help cooking, cleaning, bathing, and assistance with other activities of daily living. You and your loved one may have come to a verbal agreement that you would be compensated for your time and efforts, or maybe your loved one has been paying a family friend to look after them. You don’t need an actual written contract because you are family, or you have known that family friend for years, right? WRONG. Your loved one may eventually need a higher level of care in an assisted living or skilled nursing facility and they may need to apply for benefits to assist with the cost of care. Many of you may have heard of that ominous “Look-back Period”. During the look-back period, any payment to caregivers without having a written contract in place prior to services being provided, could disqualify them for benefits for a period of time. The contract must also meet certain requirements in order to be accepted by the Department of Social Services.
Let’s just say, for example, that Mom has been paying you $500/week for the last year to provide care and other services, which comes out to $26,000 for the year and you did not have a written contract in place. There is a formula used to calculate the penalty period and that $26,000 would result in roughly a 4-month penalty period. The penalty period means that your loved one would have to pay out of pocket for their cost of care in a facility for 4 months before their long-term care benefits would begin. But wait, it gets a little more complicated. That 4 month penalty period wouldn’t begin until Mom was “otherwise qualified” for benefits. That is a discussion for another time (perhaps at your hour-long, free consultation with one of our experienced attorneys). The average cost of care in a skilled nursing facility is around $7,500-$10,000, so at the very minimum, that $26,000 just cost Mom $30,000.
Navigating the qualification and application process for Long-Term Care benefits can be challenging and sometimes the policies just don’t seem fair or make sense, especially when you were just trying to care for your family. This is just one of the ways that could cause your loved to potentially incur a penalty period when applying for benefits.
The solution? Come speak to one of our experienced attorneys about drafting an inexpensive caregiver agreement that could save your loved one tens of thousands of dollars. Our attorney’s can advise you on how to avoid other penalty-incurring transactions, and how to best prepare for your or your loved one’s long term care needs.
If you or your loved one has questions we would be glad to extend a FREE CONSULT to answer those estate planning and elder law questions and get your affairs in order. Let the experienced attorneys at McIntyre Elder Law help. Call (704) 259-7040.
Firm Medicaid Director
McIntyre Elder Law
“We help seniors maintain their lifestyle and preserve their legacies.”
*Article proofed and approved by attorney, Gregory S. McIntyre.