Instead of transferring money to a relative and incur a disqualification period, a potential Medicaid applicant may consider transferring the money to someone who is taking care of them as a compensation for their services.
A caregiver contract is proper only when the person receiving money is actually taking care of the Medicaid applicant. Caregiver contracts work because although one is not allowed to transfer assets to qualify for New York Medicaid, but one is allowed to pay people to take care of them.
To work, this arrangement must be documented in a legally enforceable caregiver contract which describes among other things the services provided, the hourly compensation and the amount of hours worked per month.
Because this arrangement will be treated like a regular contract, a person must report the money received from the Medicaid applicant as income on a tax return.
A caregiver contract must be drafted by an experienced Medicaid attorney; otherwise it might be rejected by Medicaid.
Albert Gurevich, Esq.