Family Caregiver Agreements In PA

An adult child who may be providing care and other services for an elderly parent or relative may want to enter into a Family Caregiver Agreement with the family member. The family member agrees to provide compensation (monetary or otherwise) in exchange for services performed by the family member. These agreements are usually entered into by the older family member (or their agent under a power of attorney or legal guardian if the individual lacks capacity) and their adult child or another relative. The agreement may be terminated by either party, but will automatically terminate upon the death of the older family member.

There may be a certain level of reluctance for a child to enter into an employment relationship to care for a parent who cared for them when they were young. There are, however, several good reasons to consider this type of agreement. The care recipient may be able to stay at home, and not be institutionalized, for a longer period of time. The cost of a child caring for the recipient may be significantly less than an agency performing the care, and it may also bring greater peace of mind than would an agency. For the caregiver, it provides a way for their services to be recognized and rewarded. It may also be necessary to maintain the needed financial resources to continue the care that will allow the older family member to exercise their independence.

To be enforceable, a Caregiver Agreement should meet certain criteria. First, it should obviously be executed by the parties mentioned in the agreement. The agreement should also specify which specific services will be performed, and how much or for how long they will be performed. The form of compensation should also be specified.

An important factor to be aware of is the tax implication of Caregiver Agreements. Caregiver Agreements create a form of an employment relationship between the caregiver and the care recipient. Payments made must therefore be included on the Care Giver’s personal tax return. Some expenses may be deductible by the care recipient as health care expenses. Anyone considering drafting a Family Caregiver Agreement is strongly recommended to consult an accountant or tax preparer as part of their legal and health care team.

Contact our office if you are interested in obtaining a Family Caregiver Agreement today!

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