Personal Services Contracts

Personal Services Contracts

A Medicaid Planning Tool

Personal Services Contracts are also known as a Family Caregiver Agreement. These kinds of agreements are a popular Medicaid planning strategy. A personal services agreement is a contract between the Medicaid applicant and a designated caregiver for services not provided by a skilled nursing facility. The caregiver is usually a family member, but it can be anyone. The caregiver does not need formal caregiving training or experience. This kind of agreement is not just for residents of nursing homes. Personal service contracts can be for Medicaid recipients living with adult children who provide a majority of their care.

Why use a personal services contract?

Personal services contract can be used as a tool to help the Medicaid applicant legally spend-down their assets in order to qualify for Medicaid in a way that does not incur a penalty. Even though an adult child may be willing to help a parent out of love for no money, being a caregiver can take up a significant amount of time and be extremely difficult. Considering a personal services contract may enable them to work less to provide more hours for care or benefit the family in another way.

As a person ages and begins to need some help around the house and daily care, oftentimes they look to family members for assistance. It makes sense, they are comfortable with this person and trust that they will be cared for. Unfortunately, many times, these people have informal agreements with their caregiver which can have a negative impact on Medicaid eligibility. Having a formal agreement such as a Personal Services Contract will avoid this negative impact.

What are the benefits of a Medicaid personal services contract?

Medicaid applicant

If the Medicaid applicant were to give a lump sum payment to their caregiver, as happens under a personal services contract, Medicaid would consider this transfer as a gift. This gift would cause a penalty to be incurred, which can result in a hefty payment needing to be made to Medicaid. If this payment is made under a personal services contract Medicaid will not treat it as a gift.

We understand the elder care planning process is complex, Attorney Kelly Parks has decades of experience assisting seniors begin this process. We take the time to fully understand your wants and needs before developing a tailor-made plan suited for you. Call us today to get started.

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Attorney Kelly Parks

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