Why Should Elders Have a Personal Care Contract?

Short answer: Because Personal Care Contracts can offer big benefits! How, you wonder? Well, before we get to that, it’s important to note that most children are willing to voluntarily care for a parent without any thought of compensation. This is true despite the fact that the child providing care for a loved one oftentimes makes significant sacrifices. For instance, caregivers commonly give up a job and employment benefits to care for a parent. Now, if you or your loved one find yourself in this situation, a formal agreement between the two of you will provide a way to compensate the person providing care. You see, even though most children want to help their parents, caring for an elderly parent is a job that ordinarily requires heavy time commitments and responsibilities. So, what are child caregivers to do, especially if they can’t make ends meet?
That’s where a Personal Care Contract (“PCC”) comes into play. PCCs are an agreement between a elder who needs help with activities of daily living and another person (who need not necessarily be the parent’s child). PCCs should be carefully drafted to avoid the transfer of money being deemed a gift for public benefits purposes. Typically, that means the PCC must be in writing prior to the delivery of personal care services, it details out the services to be provided, is at a rate which compares to what other caregivers charge in the area, and is signed by both the elder needing care as well as the person agreeing to perform those services.
Still, what other reasons are there to set up a Personal Care Contract? Well, as highlighted above, PCCs compensate the child doing the caregiving, while alleviating tension between the caregiver and her or his siblings, by making sure that such work is fairly compensated. Without this contract, our firm has found that siblings generally wonder if mom and/or dad are leaving the caregiver child their estate. And perhaps surprisingly, (it may shock some to learn) parents do indeed occasionally leave their estate to just that caregiver child. Of course, this can quickly result in litigation which forever tears families apart. Aside from avoiding these potentially huge problems though, another significant benefit of PCCs is that these contracts may be the key component needed in order for an elder to obtain public benefits!
That is, the Veterans Administration generally allows veterans who served during a time of war – even if they didn’t serve in country – to deduct the annual cost of paying any person, such as a family member or hired caregivers when calculating their VA Pension Benefits. That means veterans and/or widows of veterans can frequently receive extra monies from the Veterans Administration, simply by creating a Personal Care Contract! For example, in 2017, a married veteran can receive up to $2,127 per month, while a widow of a veteran can get up to $1,153/month. These funds are “found money” to most, because Veteran’s Pension Benefits have nothing to do with being injured during a time of war.
Amazingly, we have found that the latter fact is a revelation to 99.9 percent of our veteran clients.
In addition to Veteran’s Benefits though, PCCs can also be extremely useful in obtaining Medi-Cal benefits. Actually, these contracts offer so many benefits, families who have a child providing care for an aging parent should seriously consider setting up a PCC. To set up a Personal Care Contract with your loved one, contact Randall F. Kaiden, Esq., of Kaiden Elder Law Group, at 661-247-8433, or via our website: www.kaidenelderlaw.com.