Hiring Caregiver for Elderly Parents Privately (Without Using an Agency)

[Mo Money]

My elderly parents will soon need some assistance at home.

Ideally, I'd like to start with a part-time caregiver who works a couple of hours a day.

The local caregiving agencies have staff available for a minimum of 3 hours per day. They may be willing to charge a one-client rate of $20/hour, but that's iffy, since the both parents arguably need some care. If both parents get care, that's $40/hour. With a three-hour minimum, that's $120/day, or $3360/month.

Meanwhile, a local woman with references and caregiving experience is willing to be a caregiver for both parents for 2 hours a day, for $20/hour. That's $1120/month. But she is asking for cash, and I fear problems if my parents file for Medicaid. I also fear insurance issues and tax-witholding problems.

For this reason, I am leaning toward using the local caregiving agencies, though they are more expensive.

Question: Has anyone ever privately hired a caregiver and had it be totally above-board, with taxes withheld, insurance coverage purchased, etc.? I ask this question because I'm wondering if it would be worth it to pay her an agreed rate (say, $25/hour to watch both parents) while arranging tax reporting and insurance coverage. But I'm wondering how expensive such an arrangement might be. In the end, it would likely only last a year or two, then more extensive caregiving might be needed from one of the agencies. (This private caregiver would be unwilling to work more than a couple of hours per day.)

I'm hoping that I might find a local accountant to handle the tax filings and withholding paperwork. I'm also hoping my parents' insurance company might add a caregiver as an additional insured under their home and auto policies.

Any insights or advice would be appreciated.

 

[MichaelB]

I hired caregivers for my mum for about 3 1/2 years. Even though the cost of agency help was hefty I used it for two reasons. Employment issues, being able to fire the caregiver if it didn’t work out. Liability issues at home - the normal homeowner and liability policies don’t cover employees.

From a workload perspective you probably don’t need two caregivers. If the folks need any personal assistance, though, such as bathing, dressing or hygiene, you probably would.

 

[Texas Proud]

We hired a separate caregiver for maybe 5 years... she did not insist on cash but gave us a bill each time...


We allowed her to buy stuff and would reimburse her for those things..


We treated her as a independent contractor since she had other clients and we were a bit lose about directing her activities.... IOW, we said that she need to take mom to the gym 3 days a week for water aerobics... she determined how to get that accomplished...


When she left we used an agency... that was more difficult as they wanted 4 hours for 4 days minimum... and that was after we talked them down from 20 min... most want a 40 hour week...

 

[Lakewood90712]

IIRC there may be a recent thread on this.

My 2 cents, unless you are willing to go as an employer ,setting up payroll deductions , getting a workers comp insurance policy, it is risky to use a cash paid caregiver. Injuries do occur lifting , and helping the elderly.

$ 20 - $22 is about the going rate from a service in metro areas. Cash under the table is more like $12. This is risky for anyone with income or assets. Homeowners insurance will probably not cover this . That being said , a lot do go the cash under the table route.

I don't buy the need for 2 caregivers just because the client is a couple. The services I have contracted with for my dad would have 2 only for a very heavy client that could not be safely moved with lifting aids.

 

[Mo Money]

Thanks, Lakewood. A clarification: The rate is double ($40) for one caregiver to look after two people. If I decide to use the commercial agency, I think I'm going to say: "You want the work, it's $20 an hour for my Dad, and you may have to assist my Mom once in a while."

 

[Lakewood90712]

If you did become a direct employer , you will only save about 20% off the service provider rate, and that assumes paying min wage to the worker , all payroll taxes and workers comp ( be prepared to pay $25 dollars per $100 of pay just for w/c insurrance , with a minimum premium of $5,000 ).

Workers comp is why I never hire cash workers or 1099 workers.

 

[GrayHare]

The liability concern is an important one that's addressed by an agency, and one reason an agency's rate is higher.

 

[orchid55]

I looked into getting a caregiver for my MIL in Santa Cruz California.. I spoke to the local Alzheimer's Association and was given some interesting info. At least in the Santa Cruz area the agencies charge about $25 an hour but the caregiver is only paid $12 or $13 an hour. Consequently the quality of the caregivers from the agencies was quite low, as $12 or $13 is not much for that area. The Alzheimer's spokesman said that hiring privately and paying $20 or $25 an hour would result in a better quality caregiver.

However, the points about workman's comp and taxes are valid as well. It is a tough decision.

 

[NYEXPAT]

My dad paid through his CCRC $22/hr for someone to do his grocery shopping. The person received $8/hr. This was in central Florida.

It is amazing here in Peru for 10 hrs/day, 5 1/2 days per week, I only pay $1.68 /hr. for an amazing young girl. No insurance necessary although we do pay for her HI, medicine,etc. Also, she gets 3 weeks paid vacation, two months salary bonus each year and 1 month per year worked in severance pay. Also, we take her on vacations and dining out and my wife gives her presents and buys her clothes. We will be letting her go at the end of the year and have also offered her our furniture/appliances/toys. Even with all that, I feel that we need to do more! I have learned over the years that good employees are priceless!

Many expats bring their parents down here for that very reason. I tried to bring my Father down several years before he passed, but my sisters nixed it.

 

[Mo Money]

Thanks for the replies on whether to hire a parental caregiver privately, or go with a commercial agency. Given the risk of blowing Medicaid eligibility, and liability issues (e.g., caregiver falls), and also given the expense of comp insurance and the pain of tax withholding, I think we will just bite the bullet and hire a commercial agency rather than hire privately.

I think the significant expense of hiring an ageny might be reduced by (a) insisting that only one parent needs care (arguably yes in our situation), thus reducing the hourly rate by half; and (b) lawfully separating parents' assets using an eldercare lawyer, such that the most-ill parent using the caregiver goes broke earlier, enabling that parent to get Medicaid.

Any other thoughts or suggestions are welcome. I knew that dealing with aging parents was going to be a challenge. But knowing that the wave was coming is not the same as actually swimming in it now that it has arrived, all the while trying not to be overwhelmed and drowned by it...

 

[skipro33]

I have a question about hiring an individual and all the tax/liability implications. I've hired plumbers, carpenters, electricians and didn't need to do any of what is being said I'd have to do to hire a care giver. Why is that? Those trades are contractors. Can a care giver get a contractor license and would then be an independent business person who manages their own tax and insurance requirements? I imagine that's all these high cost agencies are doing; hiring people under their license. But I would think an individual could attain their own license and go independent just like any other trade worker can.

And if you supplied a living quarters during their employ, are there renter rights if you need to let them go and bring in another contractor/caregiver, or would that just be considered part of the wage compensation and can also be terminated without going through the renter rights rodeo?

One last question; why do caregivers for elderly cost so much more than a caregiver for a child? I've taken in my father for over 1.5 years and he's much easier than a child under the age of 9 or 10 I'd say. (Having grand kids, Dad is much easier than any of them at any age.)

 

[skipro33]

To the OP; if the agency charges double for two people, I'd insist there be two caregivers then as well and have them do the housekeeping, cooking, shopping, laundry, etc. It's not a baby sitting service, it's an all inclusive caregiving service. Oh, and bathing and bathroom cleaning. The hardest part of Dad living with us is his occasional 'accidents'.

 

[youbet]

lawfully separating parents' assets using an eldercare lawyer, such that the most-ill parent using the caregiver goes broke earlier, enabling that parent to get Medicaid.

Let us know how that works out. I asked about it here in Illinois as was told it's not possible to split assets between a couple so that one appears asset-less for Medicaid purposes.

 

[Mo Money]

Skipro33: Will bargain hard with the agency; I have a strong feeling there is a fair amount that is negotiable.

Youbet: Will keep you posted.

Per other threads I've posted, I have installed Nest cams at the suggestion of other ER.org posters, as well as Echo Dots. These gadgets give my brother and I some comfort that we can keep tabs on my parents (and any eventual caregivers). (I dare the caregivers or their employers to object to the cams....)

I am also going to strip the house of valuables and put them in a safe deposit box.

Doing all of this is an (unpaid) part-time job at this point. But hey, they were wonderful raising us. Sadly, in some ways, it's as if the parents I knew are already gone. But that doesn't diminish my desire to help them along as they gradually shuffle off this mortal coil...

 

[Sue J]

DH and his siblings used a Home Health Care agency for their Mom. It was $27/hr in the Denver area. One advantage of using an agency is that if Mom, or the sister who was running things, didn't like one of the home health aides they could ask that she/he not be sent back. Over the first few weeks they found a number of very good ones and just a couple who were not scheduled again.

This was very expensive. Mom had the money and she was adamant that she wanted to die at home, never at a nursing home. And that's how it went.

With my Dad, we used the same home health aide that took care of my brother-in-laws parents. She was hired privately, $15/hr, paid by personal check. My Dad did not get along with her personally, but he said she took very good care him and he appreciated her cooking. As for employer/employee payroll issues he said that was her problem, he assumed she claimed it and he never asked. He got tired of paying for her and moved willingly to a nice assisted living facility.

 

[firemediceric]

As alluded to in post #7, an agency provides employees which are covered by workers comp and have taxes withheld. A registry is just a list of certified providers, no workers comp or taxes provided through the registry.

 

[TrvlBug]

I did both for DF almost 20 years ago. Private hire paying prevailing wage and room and board. Brought in an agency caregiver on day off as well as when needed in emergency. Used Paychex (I think that was the name of the company) to handle payroll. After 2 that didn't last 6 months, I gave up and hired through an agency. Very expensive but DF had the funds. That didn't work out either and he then was moved into a great local board & care home until he passed 8 years later.

The advice I was given and strongly encourage anyone bringing in caregivers is strip home of valuables AND don't allow access to funds. DF was a sucker for a sob story and kept "loaning" money to the agency caregivers. We're not talking $10 or $20 bucks, but hundreds up to a thousand+ dollars! When I found out, I complained, money was re-paid immediately and supposedly the caregiver was fired.

Good luck...it's a challenge.

 

[Texas Proud]

I have a question about hiring an individual and all the tax/liability implications. I've hired plumbers, carpenters, electricians and didn't need to do any of what is being said I'd have to do to hire a care giver. Why is that? Those trades are contractors. Can a care giver get a contractor license and would then be an independent business person who manages their own tax and insurance requirements? I imagine that's all these high cost agencies are doing; hiring people under their license. But I would think an individual could attain their own license and go independent just like any other trade worker can.

And if you supplied a living quarters during their employ, are there renter rights if you need to let them go and bring in another contractor/caregiver, or would that just be considered part of the wage compensation and can also be terminated without going through the renter rights rodeo?

One last question; why do caregivers for elderly cost so much more than a caregiver for a child? I've taken in my father for over 1.5 years and he's much easier than a child under the age of 9 or 10 I'd say. (Having grand kids, Dad is much easier than any of them at any age.)

A few things... a plumber or other trade that you mentioned comes in and does one job.... you tell them to do X... then they decide how to do X... you are not directing them... contractor...


If on the other hand you have a plumber come over every day and tell them what to do and how to do it all the time.... not contractor...


There is a difference in having a parent live at home and having one that requires help... and that help can be extensive... getting them dressed, helping with toilet, bathing etc... cooking... and they are much larger than a young kid...

 

[Lakewood90712]

I have a question about hiring an individual and all the tax/liability implications. I've hired plumbers, carpenters, electricians and didn't need to do any of what is being said I'd have to do to hire a care giver. Why is that? Those trades are contractors. Can a care giver get a contractor license and would then be an independent business person who manages their own tax and insurance requirements? I imagine that's all these high cost agencies are doing; hiring people under their license. But I would think an individual could attain their own license and go independent just like any other trade worker can.

And if you supplied a living quarters during their employ, are there renter rights if you need to let them go and bring in another contractor/caregiver, or would that just be considered part of the wage compensation and can also be terminated without going through the renter rights rodeo?

One last question; why do caregivers for elderly cost so much more than a caregiver for a child? I've taken in my father for over 1.5 years and he's much easier than a child under the age of 9 or 10 I'd say. (Having grand kids, Dad is much easier than any of them at any age.)

If a eldercare worker wants to be an agency as the only employee, no problem, they can supply you with an employer ID number and bill you with an invoice. You better verify that employer ID # with IRS and FTB ( in CA). Issue them a 1099 to back it up. To an employer # not a SS #

Trades in CA. Anyone offering or doing construction work as a service, not your employee is required in CA to be a lic contractor ( work under $ 500 is exempt.

That being said, most sole proprietor construction contractors in CA can and do claim exemption from W/C when they have no employees.

Here is the kicker. You can hire a CA Lic construction contractor who has no employees, does the work himself, claims exemption from w/c as is allowed. You have no obligation to have him covered by w/c, however, the kicker is if injured on your property , he can require you to pay medical bills and disability. Sounds crazy ? It is. It is a loophole that should be plugged.

Roofing contractors in CA are the only classification not able to claim exempt from W/C even if no employees.

Your homeowners policy does not cover construction tradesmen or handymen.

When I hire a sole proprietor contractor, I insist he has a W/C policy to cover himself , or I pass and use a more $ who does.

If you are hiring unlicensed trades for your property in CA , you become the employer, period. Usually works out ok, but when it goes bad, it goes really bad.

Back to eldercare workers. If you have been around nursing homes much, you will find some unbelievably difficult and abusive patients . And lifting a 9 or 10 year old to change a diaper isn't going to happen, Lifting a 90 year old to change a diaper is a frequent thing.

 

[Mo Money]

Thanks for your input. Again, on balance, I'm leaning toward just hiring an agency to supply caregivers for one (not both) of my parents. I believe the private caregiver is only going to want to do cash, and will likely balk at any above-board arrangement. Moreover, I don't want such a proposed all-cash arrangement to create IRS and SS and workers comp and liability and Medicaid issues.

Appropos of nothing, but somehow, maybe appropos after all: A friend in his 60s died suddenly in his sleep yesterday. If only we were all wired to have that happen.