'Paying caregivers cash for 24 hour care - Is this legal?' posted by Anonymous @ {post.created_at.to_s(:post_time)}

Anonymous — Mon, 14 Mar 2011 21:06:17 -0000

As I live in New Zealand I can only say what applies to our country which is keeping your caregiver hours under 30 per week which makes them self employed and responsible for their own tax. This way I don't have PAYE or ACC levies, can instantly dismiss etc. the same as a lawnmower person, a nannie, a gardener, housekeeper or carer.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by GertrudeCNA @ {post.created_at.to_s(:post_time)}

GertrudeCNA — Sun, 13 Mar 2011 21:50:27 -0000

Your state Workers Comp board usually has guidleines. For example in my state it sets out specific criteria (do you make the check out to me or my business - do I have a segregated business bank account - etc).

In general, regarding self-employed caregivers:

Quoting the IRS: "the general rule is that an individual is an independent contractor if (the person for whom the services are performed) has the right to control or direct only the result of the work, and not what will be done and how it will be done or method of accomplishing the result." Use a licensed professional who has the necessary training and experience to do the job.

Some additional, general notes on hiring private-duty care:

Consider using a licensed CNA.

When considering a CNA, ask for the caregiver's license number, and check it out with your state's Department of Health, either on-line or by phone.

Licensing. Exams for CNA's have become standardized across many states. State licensing also includes law enforcement checks, with FBI checks.... as appropriate. Many states maintain easily accessible databases of licensees. License holders also have continuing education (CE) requirements.

Insurance. Professional liability insurance is now available for individual caregivers. Check that the person you engage has a professional liability policy. If your favorite caregiver doesn't have a policy, you might suggest that she obtain one.

Internet resources. Most states have on-line databases of licensed professionals, which provide the licensee's status. For those who want a more current background check than provided by the state licensing board, there are numerous on-line services. These typically charge nominal search fees.

Spot-checking. One of my clients' families had a motion-sensor video security system installed in the foyer. If desired, comings and goings could be monitored, spot-checked, or even communicated by email. The added advantage of that system was that, combined with cell-phones, it could be an entertaining form of communication. Of course this is only appropriate if used with discretion.

Affiliations. If you are planning to use a CNA extensively, check that she has back-up resources available. Many independent CNA's have good networks, including caregivers with prior hospital or other institutional experience. Some private caregivers have close affiliations with RN's. This can be especially helpful in complex cases. As a further back-up, you could also research some local agencies for possible short-term coverage needs.

Long Term Care insurance eligibility. Licensed caregivers are eligible providers under many LTC policies (including the AARP-affiliated provider). Check with your agent or refer to your policy. Since the policy may have dollar limits, you may be able to get more 'bang for your buck' hiring directly.

Financial & Quality advantage. By engaging a caregiver directly you can sometimes get professionals of caliber that you might not have access to through an agency, and at significantly lower cost.

The result. For short-term needs, or in transitional situations, using an agency may make more sense. For longer-term situations, the key relationship is between the actual caregiver and the care recipient. With the developments in licensing, the availability of professional insurance, and advanced technologies, private hiring can be a rewarding alternative.

From my site: http://eldercarenotebook.blogspot.com/

Anyone interested in specifics on prevailing rates - hourly and daily - should email me off-board.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by Anonymous @ {post.created_at.to_s(:post_time)}

Anonymous — Thu, 10 Mar 2011 02:23:49 -0000

If you keep the hours employed under 30 per week they are self employed have an IR56 and are responsible for their own income tax declaration. I use payable to cash cheques as this lets the worker decide their own income bracket and I have no PAYE or ACC, This also applies to the gardener, the lawnmower man, the pool maintanance, nannies and home carers. I sought legal advise for this from my accountant, a tax expert, before starting home carers for my Alzheimer patient.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by McGee Homecare @ {post.created_at.to_s(:post_time)}

McGee Homecare — Sat, 17 Jul 2010 05:15:10 -0000

My reply as a 22 year nursing professional is...NO its not illegal but it is unsafe. What I mean by that is, if the customer falls, is injured, is a victim of theaft or fraud, having a 'payroll check reciept places liability of employment on the employee! Therefore, the employee becomes legally liable for ALL of his or her actions, or neglect ect.

Homecare patients are victomized as mush as 25% of the time accross the USA, its really hard to file a claim of liability for someone who can say they where NOT acting as a employee during the occurance but rather a quest in the clients home!

'Paying caregivers cash for 24 hour care - Is this legal?' posted by dfern @ {post.created_at.to_s(:post_time)}

dfern — Mon, 14 Jun 2010 22:30:02 -0000

You've received some excellent advice. The only additional piece of advice I would give to modify some of these comments is that if you hire a licensed professional, you don't necessarily have to withhold payroll taxes.

I hired a registered nurse last year to check on my mother, and I called both my CPA and the IRS before I did so (and I'm a financial planner/CFP). The CPA wasn't certain, but the IRS said that if the nurse was a licensed professional that I did not have to set up payroll for her. She would be responsible for reporting her own income and the relevant payroll taxes. (Just the same way my clients work with me, by the way).

This was a short-term hire and did not go over the $600 annual threshold for issuing 1099s.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by Chaplain @ {post.created_at.to_s(:post_time)}

Chaplain — Tue, 08 Jun 2010 15:19:07 -0000

Do Not pay "made out to cash". There are tax laws and if you employ someone they are either a contract worker or employee. There area specific rules you must follow. You can't arbitrarily decide someone will be a contract worker rather than an employee. You can go to IRS web site,ask a volunteer with SCORE or ask a CPA. If someone is an employee then you must pay their taxes. Record keeping is essential. If you hire an agency nurse the agency will take care of taxes, but otherwise if you hire someone you most likely must consider them your employee and you will be required to pay their taxes. If they ask for cash they are trying to avoid reporting income an d you both could get into trouble. In fact, ots fraud and a crime.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by Caregiver4u @ {post.created_at.to_s(:post_time)}

Caregiver4u — Mon, 08 Mar 2010 03:25:16 -0000

While caring for someone in their home and you receive a check made to cash,you are going to your bank or the clients bank and cashing it with a signature and photo I.D. even your drivers license number is posted on the check.This marks you with a transaction at a bank that can come back on you should you or the client ever get audited.They are required by law to provide you with a 1099 at the end of your services and for sure at the end of the year. When the family files their taxes and they are using the costs of their loved ones care, that 1099 is presented with the taxes they file and information as to the one that collected the funds is responsible to pay taxes on that money. I just went through this very thing. I made 20,000.00 for 8 months of homecare service. No taxes were taken and I pray that the government will me merciful when I file my income tax and all my deductions and credits work to my benefit and save me from a huge TAX DUE. Best thing is for your friend to get advise from a CPA or accountant. That is the best way to go..never assume you wont get a notice now or years down the road about his and all the penalties,interest and late fees dont come down on them. Good luck !! Blessings to those who care for the needy may your strength come from the heavens above. Peace.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by crsten06 @ {post.created_at.to_s(:post_time)}

crsten06 — Sat, 18 Apr 2009 17:02:01 -0000

I live in California and have been paid by check for three years to live in and care for a dear lady with Alzheimers, Parkinsons, and MSA. When I file my taxes, the family that pays me had requested that I file as self-employed and pay the IRS that way. Of course, the IRS told me the first year that I did this, that I was NOT self employed, but if I tried to not file there might be "repercussions" where I live....Of course, I chose the easy route and paid my own taxes. Anyway, now the family has chosen to move this lady to a skilled nursing facility as we are no longer able to meet her needs at home, and I am out of a home and the unemployment that I should be able to draw. I urge your friend to step up and take the high road, and pay for her care the proper way. Those friends or employees deserve that after all.

'Paying caregivers cash for 24 hour care - Is this legal?' posted by Anonymous @ {post.created_at.to_s(:post_time)}

Anonymous — Tue, 06 Jan 2009 17:37:36 -0000

I am trying to help an elderly friend of mine find out if the way she has been paying for her live in home care is legal.

Each week she simply gives the caregiver a check for cash and does nothing more....

Is it legal to do this withoug taking out federal taxes, ss taxes, state taxes etc???

She has become very worried about this and I would like to ease her mind if possible.

BTW - She is a Michigan resident.

Any advice would be greatly appreciated.

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