Tip – Caregiving children may want to consider a Personal Service
Agreement.
As elderly parents begin to need help with daily living, it’s often their adult children who step in. This support typically starts small — helping around the house, paying a few bills, picking up groceries, or preparing meals. To simplify financial management, many parents add an adult child to checking and savings accounts. Unfortunately, this arrangement often leads to poor record-keeping
and commingling of the parent’s and child’s funds.
When a parent is diagnosed with dementia or Alzheimer’s, care needs intensify, and so does the burden on the caregiving child. It’s common for that child to cut back work hours or leave a job entirely to provide care.
In these situations, most families don’t think they need a written agreement between parent and caregiving child — but that’s precisely what’s missing, if the parent transfers money to the caregiving child without a formal contract, it can jeopardize the parent’s Medicaid eligibility.
A Personal Service Agreement addresses these risks. Under the Idaho Administrative Procedures Act, payments to a child for personal care services will render the parent ineligible for Medicaid unless the arrangement meets these requirements:
• The written contract must be signed before any services are provided.
• Payment must be made only after services have been rendered.
• The contract must be dated, with signatures notarized.
• Either party must retain the right to terminate the agreement.
• The contract must be signed by the care recipient or their legally authorized representative (via power of attorney, guardianship, or conservatorship).
• If a representative signs on the parent’s behalf, that person cannot also be the one providing the caregiving services.
• Compensation must reflect fair market rates for comparable services.
Caregiving children should maintain thorough records of the care they provide and any expenses they incur. Together, a properly executed contract and careful documentation protect the caregiving child from exploitation claims while also demonstrating that any payments to the child complied with Medicaid requirements.
Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.
August 2026