Should Mom pay for part of her living expenses?
My mom has been living with me for two years now and she receives a pension and a Social Security check. I need some help financially to keep her living here. Can she pay some of the monthly bills, or does it have to be a percentage of them? (ex: my husband, myself and Mom are the adults in the house.) Would it have to be a third of the bill or can she pay some of the bills entirely and I would pay the others entirely? What is best?
It is absolutely fine for your mother to pay rent for the right to live in your home. In instances such as this it is simpler to come up with a regular monthly amount that she pays rather than have the amount change from month to month with her paying a portion of the living expenses. It would also make sense to have a tenancy agreement whereby she would be a tenant at will on a monthly basis or a tenant through a lease for a period of a year or more. You should talk with a lawyer to have such an agreement drawn up. You also may wish to discuss the income tax ramifications of having your mother pay you to live there. I know this may sound like it is making it more complicated than it is worth, but it is always better to comply with the law now rather than face problems for not complying with the law later.
No offense to the term lawyer here, but our society makes it so costly just to do the correct thing in caregiving. Unless there are family members to contest (they should do all the caregiving then), why would it be wrong to have assistance in bills for the cost! If she lived in an assisted living situation, she would be paying more to strangers who may not care quite so much. Glad you are able to do what you are doing! God Bless.
Does this mean that we have to file taxes and contact an attorney before we can teach our teens about finances by having them pay a small room and board?
Does the daughter get paid for all the care she gives her mom?
Wait!!!! Where is the common sense here?
As an only child and one who had his mother with my family for 35 years (yes, I'm still married) I always asked Mom to contribute. She receives $1100 per month social security and $300 per month pension. Now, at 98+ we have placed her in a assisted living home. She will run out of funds next year and then it will be our challenge. In short, don't feel bad asking for support.
Many people are willing to voluntarily care for a parent or loved one without any promise of compensation. Even so, a growing number of people in Pennsylvania are entering into caregiver contracts (also called personal service or personal care agreements) with their family members. Having such a contract has many benefits. It rewards the family member doing the work. It can help alleviate tension between family members by making sure the work is fairly compensated. In addition, it can be a be a key part of Medicaid planning, helping to spend down savings so that the elder might more easily be able to qualify for Medicaid long-term care coverage, if necessary. Care contracts are also an important part of Veteran's benefits planning, as amounts paid under a care contract can be considered an "unreimbursed medical expense" that may help the Veteran or their widow qualify for Improved Pension benefits (Housebound pension and Aid and Attendance).
This is a much better idea and less complicated than having her pay you cash.
Payment to the caregiver can either be made with a lump-sum payment or in weekly or monthly installments. For Medicaid purposes, it is very important that the pay not be excessive. Excessive pay could be viewed as a gift for Medicaid eligibility purposes. The pay should be similar to what other caregivers in the area are making, or less.($15.00-$20.00 per hour)
Attorneys say that if set up properly, a caregiver contract shouldn't be considered as a gift to children, because the patient is receiving a true, real service in return.
TO (Mother living with you), Lets all remember that each family is different and each family settles it's own challenges in its own way. My Mother (78 yrs old)just moved in with my family a year ago, my father is in assisted living near by, my mother pays us $750 a month plus she paid to have her living quarters in our house renovated to the tune of $17,000. My father needs to pay $4,500 a month for his assisted living, half of which is paid for by a long term care insurance policy he took out many years ago. Practically speaking, if you can afford it and choose to do so, you can absorb all the costs of your mom living with you but in your case, it sounds like that's not the case. This is America, we are not a socialist country so things cost money and the way it was set up, we should be taking care of ourselves as much as possible, yes Mom should help defray the costs of her living with you, she could probably never live as cheaply if she lived on her own. When I was a kid and I turned 18 yrs old and was still living at home, my paretns taught me this valuable lesson at an early age and started charging me money (rent)to live in a house that, up until that point, I'd been receiving for free, that's one of lifes lessons I learned, that's what turning 18 and becoming an adult means, taking responsibility for yourself, no free lunches. Hope this helps. Cheers, Lancer in Tucson
I have a question. Is your mom's mind still functioning correctly? If so, I would think you could just talk with her and explaine the situation and come up with an agreement. Put the agreement down on paper and have all people involed sign and date the paper and give each person a copy. For legal purposes it may be a good thing to have it notarized. If her mind isn't functioning correctly then things get more difficult.
to anonymous, yep sounds like it. Once again the government runs our money. If your teenager pays rent, that is considered income. You would have to file long form to show your expenses and the fact that you really didn't make a profit off him! And if the daughter got paid for all the care, there again it is considered income! Any money coming into your household is income in the governments eyes. Kinda makes ya sick huh?? My dad has been with me over 2 years. I use some of his money to pay some of the expenses. If he lived in assisted living, or nursing home it would take all his income then they would claim it as income. It is all very tricky. And another way "The Government Rules"....
Mr. Weisman, Is what anonymous wrote correct about taxes. If I have a Care Agreement, do I need to count that as income? How can I then show how the money was spent to avoid taxes on it? Thanks.
The poster who said, "Once again the government runs our money." will feel differently once familiarity with govt. programs become necessary. It's a construed myth that the govt. is the enemy, after all, we're the ones doing the choosing. The govt. is on our side, protecting us with Medicare/Medicaid and the recent health care bill. Taxing income is part of our heritage. However, there are tax breaks included when caring for our elderly family members, take full advantage of them, which most of us are not doing. An accountant told me once that the tax code is written for the benefit of a moral code (that includes caretaking). Tho, that was years before and some changes have transpired, as we should be aware. But, today's govt. is doing it's best, for all of us.
Lanero1: I am in the process of doing what you are doing. However, I was told by a friend that I will need to report to the IRS the amount my moms gives me for rent and house expenses as income. Would you know if I need to report as income if my moms gives money towards the mortgage unde my name while she is living with me.
My mom was our live-in paid babysitter for years. Then she moved to live on her own. Mom moved back in with us a few years ago when I had to keep driving 50 miles to take her to doctor apptmts.
She pays us monthly and we have become full time care givers ever since mom's dementia diagnosis. We get virtually no participation from my brothers. I complained about the lack of participation, and my brother said we owe it to mom to be the only 1 of the 3 siblings to be the care provider because mom babysat for us all those years. I reminded him we paid her and gave her free room & board. It was a true win-win for our entire family because mom prospered by living with us. Prior to that she worked multiple jobs to pay her mortgage but while living with us, her renters allowed her to pay off her mortgage, buy a new car, and live a very comfortable life. We paid the going live in nanny rate so I don't see why my husband and I should be obliged to be the SOLE care takers.
When Mom moved back in a few years ago, she insisted on paying us monthly so we agreed.
I am glad to read the above Q&A and see it is common for mom's to pay room & board. Mom's generation believes once you are an adult, you pay your way.
You do not need to report to the IRS income received from a relative for living expenses especially if you are providing care to an elderly. I asked my CPA who is a named partner in an upscale Houston. TX CPA firm. My mother has been paying rent for 6+ years.
Yes, you can have your parent pay part of the expenses. If you don't, their money will sit in the bank and grow and if they need to go to a nursing home all the money will have to go to the nursing until you get it down to the resource limit before Medicaid will start paying the patients obligation to the nursing home. One-third of their income plus any expenses you incur for the parent is fair. If you go out to eat, pay for the parent's food out of their account. No matter where you take them, let their expenses be taken out of their account so that the account won't be growing.
Depending on the age of the parent might make a difference. My opinion will probably differ from most but my parents took care of me, fed me, clothed me for the first 18 years of my life. In no way could I ever repay what my parents did for me. The least I could do is provide a roof over their head in their aging years. If they wanted to help with food I could understand that but as for the house I could not ask them to help pay for the residence I am already living in. Not could I see myself buying a larger residence to accommodate them that I could not afford were they not living with me.
To the person asking if they have to declare income from their parent on their taxes, yes, you do. (And to the person who said their CPA says they don't--well, he's wrong). The caveat is, however, that you can ALSO deduct your caregiving expenses (keep records!). So mom might pay you $500 a month, but if you have 600 a month in expenses, it's probably going to be a wash. But you still have to report it.
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