Does Michigan Medicaid allow a child to be paid for taking care of a parent?

While the above video is out of date in part it stil has good information. And here is more:
First the Caution and disclaimer: this is a complicated area of law filled with rules and exceptions. If this is your situation see an Elder Law attorney about a caregiver contract. (You can contact us for a referral by calling 248.356.3500. 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 current Medicaid focused page see “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 investigates the costs of nursing home care for him and is shocked the monthly is over $13,000 per month. Daughter agrees to have Dad move into her house and she will quit her job to take care of him. He agrees to pay her a monthly room and board and for the personal assistance he needs, which is half the cost of a nursing home. What if some months later he needs to go into a nursing home and apply for Medicaid, will the Medicaid department consider the payments “divestment of assets”? The answer is “Yes.”

First the Michigan Medicaid program requires that agreements to pay for personal service will only be recognized if there is a “Personal Services contract in writing before the paid services are provided. The contract must be supported by a doctor’s statement stating that the services are necessary to prevent entry into a nursing home. The contract must be signed by the recipient, or the recipient’s “agent,” and the paid care provider. The contract must be notarized. Unless there is a legally binding contractual agreement the law presumes all service provided by the hypothetical daughter above will be considered rendered for free. You can read the requirements for Personal Care Contracts in the Michigan 2026 BEM 405, pp 7-9 Note however, that these requirements can be overridden by a probate court order. That means you must petition the probate court for a hearing and have the court rule providing for paid service. In this case the payments must be detailed in an accounting to the court. It is best to consult with an Elder Law attorney on the issue payments for services.

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.” In our hypothetical the Elder Law attorney will determine what is the hourly “current market rate” for home health agency services and draft a “personal service contract. Again, for more information see our page “Can I be Paid for Helping my Parents?”

We can easily see that in all of the above cases a written “contract” should be in place as soon as possible. The agreement should not written by the family. It is best to have an Elder Law Attorney to be sure it will be accepted with the Medicaid agency, Department of Health and Human Services.