By Jim Schuster, Certified Elder Law Attorney,
First the Caution and disclaimer: this is a complicated are of law filled with rules and exceptions. If this is your situation see an elder law attorney about a caregiver contract. The statements in this blog cannot considered legal advice. Second, this page covers the general law relating to children being paid to help a parent. For a more specific Medicaid focused page see “Can I be Paid for Helping my Parents?” http://www.jimschuster.com/can-i-be-paid-for-helping-my-parents/
Can a child be paid for helping an aging parent? Yes, but. Let’s first understand the general law on the subject. The law presumes a child renders all services to a parent for free. That means the services are of NO legal value.
Example: Mom has died and Dad cannot live at home anymore due to dementia, it might be Alzheimer’s. The family finds that senior living communities will take him on an “assisted living” basis. The cost will be in the neighborhood of $4,000 per month and some facilities charge much more. So what if the oldest daughter offers to have Dad move into her home?
It often happens that a child takes care of a parent for some years before the parent must go to a nursing home. Then the family receives a shock – the cost is almost $8,000 per month! A second jolt comes when they see that daughter took much better care of Dad. With Dad rapidly running out of money and Michigan Medicaid on the horizon, the family asks: “Can Dad now pay daughter for those years of ‘assisted living’ service?” After all, she saved him more than $4,000 per month.
The surprising answer is “No.”
Unless there is a contractual agreement in place the law presumes all service was rendered for free. It was given gratuitously. If the family now tries to take payment out of his savings they could be charged with elder abuse and when they apply to Medicaid, Medicaid will not pay due to “divestment” of the money.
The presumption of gratuitous service may be rebutted by proof of an agreement to pay. If it is not in writing proof of such an agreement may be difficult to impossible with a key party – Dad – in a nursing home with advanced dementia. There may be only one way to prove the contractual agreement and that is by hiring an attorney and going to court. Even that route provides no guarantee of success.
If a case is filed in court, there is a limited exception to the rule of “no contract, no pay” and that is the theory of “quantum meruit.” Where the proof can be made that a person received a product or service that was of significant commercial value and where there was an understanding that there should be payment, then the law allows the provider to make a claim for the fair commercial value for the product or service. In Michigan this theory has been applied to family situations. A caution is in order: this kind of case can be very hard to prove. A lawyer is needed to prosecute a claim under this theory. The cost will be in the thousands of dollars.
We can easily see that in all of the above cases a written “contract” should be in place as soon as possible. But, there are yet more pitfalls. Not just any “contract” will do. Government benefits programs, Veterans Pension with Aid and Attendance and Medicaid being the most common in the elder context, have their own requirements. That is another subject all by itself, but the point is any contractual agreement must be complete in all necessary requirements.
And so, finally, the answer to the posed question is qualified “yes.” Yes a child can be paid IF all necessary requirements are met. And that means, you need an attorney.