A personal assistance agreement is a type of personal services agreement in healthcare where caregivers provide specific services to people with health problems or the elderly at home in exchange for money. Written agreements are preferred to demonstrate the exchange of money for services. The caregiver can be a professional or a family member, and a written agreement can support compensation arrangements. A written agreement can also reduce the net worth of the service recipient, allowing them to qualify for income-limited government benefits. The agreement should define the scope of services, compensation, payment method and frequency, responsibility for labor fees, and cancellation terms.
A personal assistance agreement, also called a service contract, is a type of personal services agreement in the healthcare industry. Caregivers are engaged in providing specific services to people with health problems or the elderly, usually at home, in exchange for money. These types of agreements can be oral, although written agreements are preferred for a variety of reasons. Most often, the person receiving the services is elderly and a written agreement is the easiest way to demonstrate that the exchange of money for the services has been initiated without undue influence or coercion.
Often, older adults or those with health problems may wish to remain in their homes, rather than incur the expense and inconvenience of living in a managed care facility. This is especially true with the elderly, who may not be able to meet their daily needs at home without help. Caregivers provide a range of services under this type of contract, from house cleaning and shopping to running errands and personal care.
Virtually anyone can be a caregiver with a personal care agreement. The caregiver may be a professional, such as a nurse or home helper, or a family member. When the caregiver is a family member, the existence of a written personal assistance agreement can support any compensation arrangements that may exist in exchange for the help. For example, an aging parent might pay a lump sum or leave more of his estate to a child who agrees to take care of him. If there is a dispute between siblings about the legality of the transfer of assets, a written personal assistance agreement can go a long way in establishing the parties’ intent.
There are a number of benefits to implementing a written personal care agreement, even if the agreement is between family members. Putting the terms in writing creates a formal expense that reduces the net worth of the service recipient. For an older person, this expense may allow them to qualify for income-limited government benefits, such as the Medicaid program in the United States. However, once the agreement has been formalized under a personal care agreement, the caregiver could be considered an employee. In that case, both parties are subject to labor taxes.
A suitable personal care agreement should be put in writing before the arrangement begins. The document should define the scope of the caregiver’s services and specifically detail the compensation package. The method and frequency of payment must be indicated, as well as indicating who will be responsible for paying the labor fees. Most importantly, the agreement should state when and how the agreement will end and under what circumstances the agreement can be canceled by either party.
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