Last week we discussed family members coming in to take care of Mom or Dad in their home when they are unable to care for themselves. But what if you are the primary caregiver and can’t quit work to care for Mom or Dad?
And you do not have any other family members willing or able to step up to the plate and help out, even though they are more than willing to tell you what to do. You need to hire someone. Who are you going to choose?
You’ve heard about some people who are looking for a job. These individuals would be happy to help out in Mom or Dad’s home and will work for cheap. There are, however, some downfalls about hiring someone directly to take care of Mom or Dad instead of through a home care service agency.
Firstly, if you hire an individual, she generally does not have backups. If she gets sick, has car problems or has family issues, then you may end up having to take a vacation or personal day to care for Mom or Dad.
Secondly, many homeowners insurance policies have special exclusions for injuries to workers in the home because those injuries generally should be covered by a workers compensation policy. So if the caregiver has a slip and fall in the home and the homeowners insurance does not cover it, Mom, Dad or maybe even you, could be personally liable for the medical and other costs of the injury, unless you purchase a workers compensation policy.
Thirdly, if you do not complete criminal, credit, background and driving records checks, the caregiver that you hire may not be the most trustworthy. She may have a history of physical or sexual abuse. If she is not bonded and she steals anything from Mom or Dad or takes Mom or Dad to the bank to withdraw funds, you may not be able to recover the stolen amounts.
Fourthly, if you do not verify the caregiver’s eligibility to work in the United States, it could cost you. All employers are required to complete Immigration Form I-9 Employment Eligibility Verification. If you fail to complete the form and/or hire persons ineligible to work in the United States, you could be subject to criminal penalties and thousands of dollars in fines.
Lastly, most in-home caregivers you hire directly are considered household employees under the Internal Revenue Code. As such, you may be required to withhold Social Security, Medicare, and Federal, State and local income taxes from their paychecks and/or pay the withholdings over to the taxing authorities on a regular basis. You may also have to pay employer payroll taxes including Social Security and Medicare to the tune of 7.65% of their gross pay. Federal and State unemployment insurance may also have to be paid, so when the caregivers are no longer working for you because they are either laid off or terminated, they can collect unemployment.
And if you don’t treat them as employees when you should, they may be able to come back years later to report you to the IRS and/or sue you for payroll taxes and withholdings that you failed to withhold or pay over on their behalf. In addition, there could be penalties and interest that the IRS would be more than happy to assess.
In many instances, the best and safest thing to do, and likely the most economical in the long run, would be to hire a home care service agency to care for Mom or Dad. Most agencies do extensive background checks and bond their employees. If the scheduled caregiver is unable to make it, the agencies have backup staff that can fill in at a moment’s notice and are on call 24/7.
These caregivers are not your employees. They are employees of the service. You do not have to carry workers compensation or unemployment insurance or do withholdings or incur payroll taxes. You generally just pay a set fee to the service and they take care of all employer expenses so that you don’t have to. All you have to worry about is Mom or Dad’s care. In addition, many long-term care insurance policies will pay for some if not all of these services.
There are a variety of services that you can hire out to these homecare agencies. These services could include:
- grooming and dressing
- light housekeeping
- recreational activities
- handyman services
- respite for family caregivers
- teeth brushing
- caring for houseplants
- medication reminders
- companionship
- bathing or showering
- meal preparation
- incontinent care
- errands and shopping
- transportation services
- reading emails, letters, books, papers and magazines
- overseeing home deliveries
- laundry and ironing
It is estimated that there are over 120 agencies providing home care services in St. Clair County. Get referrals. Pick a few agencies. Investigate them. Interview them. Get fee schedules. Are they local? Do they have a local office? Do they hire local people? Do they have a stake in our community? Find out which ones would be the best fit for Mom or Dad. With what services do you need assistance? Some agencies are better in some service areas than others.
By finding the appropriate caregivers to provide the appropriate services, you can keep Mom and Dad happier in their own home for a longer period of time.
By: Matthew M. Wallace, CPA, JD
Published edited July 28, 2013 in The Times Herald, Port Huron, Michigan as: Hiring caregivers in the home