I need help in determining a rate of pay for my nephew and his wife to take care of my elderly mother. My mother is 93 years old and in sound mind. She uses a walker to get around. She is on oxygen and has recently developed other major medical problems. She may need to be put on palliative care soon. She needs assistance with:
-Toiletry and bathing.
-Shopping and meal preparation
-Laundry and maintaining a clean house.
-Medication administered and health needs monitored.
-Communicating with doctors and tracking her medical needs.
-Communicating electronically for online doctor appointments
-Transportation to medical appointments.
-Carried downstairs out of the house in a wheelchair for appointments.
-At night she may need to wake up someone to help her with bathroom needs or need for additional pain or sleeping medication. This may occur 0-5 times a night depending upon her difficulties (Average is about once a night).
-Always have someone in the house in case of emergencies or care needs.
My mother wants my nephew and his wife to care for her at her house and they want to provide that care. The proposal would be that they would be living with my mother at her house rent free with a stipend paid to my nephew and his wife for personal health care and a budget to cover her food.
My mother is currently paying my nephew and his wife ( Medical Asst Training) $100 a day each. She is also paying my niece (Physical Therapist Assistant student) $50 a day. My nephew’s wife feels that they are being paid far less than the value that they are bringing to the quality of life and care for my mother. My niece-in-law went out to local “for-profit” home care providers to find out the rate they charge for home care. The rate she came up with was $20,000. A month. This is what she is asking to be compensated to care. She is requesting to be compensated at $5000 a month now and $15,000 a month from my mother’s estate when she passes. They are also asking $1000 a month to cover food costs.
Currently my mother is paying $250 a day and has 3 people caring for her ($200 day for nephew and wife). On average this works out to $7500 month, ($6000 month for nephew and wife). My mother is not a rich woman. But thanks to my late father’s investments has enough money to live comfortably. Her monthly income including social security, retirement funds, and dividends from investments totals to $5570 a month. We have had to supplement this amount by an additional $4000 a month from the stocks to cover her currently monthly expenses including the amount she pays for personal health care.
Being the Financial POA for my mother they presented this proposal to me. My mother does not want to upset anyone and is feeling caught in the middle. My brother and I both feel that the current rate of compensation is a generous amount. My sister (mother of nephew) feels for all that they are doing that they should be paid more than $100 a day each but does not know what the new rate should be. Everyone but my nephew’s wife agrees that $20,000 a month is an extraordinary amount to be compensated.
We cannot agree or move forward without a Personal Care Agreement that would include a fair rate of pay for personal health care, food compensation, and location where the care should take place.
What I need help with is:
-What a fair and reasonable rate of compensation for my nephew and his wife to take care of my mother full time.
-A reasonable rate to be recompensed for food cost.
-If she should pay for any additional outside services such as house cleaning, lawn maintenance, snow removal etc. Or should it be covered for what is paid for health care?
-If my mother is paying for personal health care, should she have the right to say where that care should take place.
Thanks for your help.
Same in this case, mom can ask to have nephew and his wife to care for her, but if they are not willing to take the job for what you offer in pay then they are NOT available. Tell mom they won't take the job, they are not available.
Take mom to tour a few AL places so she can see what they offer. Mom will have friends her age to socialize with.
If you offer less than what the nephew and wife ask, and they reluctantly accept, they will NOT be happy with less money and it will reflect in their care of your mom.
It is very common for employees who think they are underpaid to underwork, underperform and resort to stealing to get what they think they deserve.
I would not keep the nephew and wife as caregivers.
I do think that $20,000 which comes out to $240,000 a year is a lot, that's $120,000/per caregiver a year. But what you're paying is $36,000/yr per caregiver is low. Check the rates in your area to find out what caregivers make plus over-time and see what the reasonable amount should be.
It's best to find outsiders, and have formal employment contracts with them. If they don't perform the job satisfactorily, they can be let go. With relatives, if you fire them, you ruin the relationship as well.
Compensation:
Start with the basics. How many hours do they work and how much are they paid per hour?
Someone needs to be there 24/7. Most likely she doesn't have to pay for the caregiver's sleep hours unless they can't get at least 5 hours sleep straight.
What is the minimum wage? Given that she probably won't expect them to "work" during all work hours, starting your negotiation at minimum wage isn't unreasonable. You can consider what other perks she may be willing to offer.
An example: She needs 20 hours a day of paid coverage per day and the minimum wage in IL is $11.00 an hour. Live in caregivers cover 8 hours a day each. The other niece averages 4 hours a day over the week.
So:
Caregivers 1 & 2: 40 hours a week straight pay plus 16 hours overtime: $704 a week each. Payroll will have Mom pay her share of SS, Medicare, etc., so she is out of pocket something like $758 per week each or $8K a month for all three caregivers.
They will also deduct the caregiver's share and federal/state/local income tax withholding. I'm not going to try the tax withholding, but just taking out SS and Medicare give them a net of about $650.
Caregiver 3: 28 hours a week straight pay: $308 a week, with a net less than $285. Note that she works half the hours, but gets paid less than half as much because the other two get overtime for hours worked in excess of 40 per week.
The payroll service may be willing to run a few examples at various pay rates, or someone can pick up a payroll tax book at the library and build a spreadsheet.
Food costs
Would she prefer to set a weekly budget amount or review receipts? Give them access to a household account or use delivery/curbside from a store with a credit card on file? Is Mom on a special diet? Will she pay for beer or whatever pricey convenience foods she won't consume herself?
Outside services
These are negotiable. If she pays more or offers other perks, she should be able to expect more. For example, if they are able to work or study from home, they should be willing to visibly work for Mom too. If Mom is picky about how the work is done, she may prefer to keep her current providers. The caregivers need to be flexible about 10 minute tasks like changing a light bulb or picking fresh tomatoes from the yard, but may balk at a two hour project too many days in a row.
A few thoughts
Carrying her in her wheelchair downstairs doesn't sound safe to me. Is a ramp or assistive device feasible?
Spell out expectations. Will there be a probationary period to see if it works before they give up their current housing? How much personal property can they bring and what can they put outside of their room(s)? Can they have friends over? Do they have a pet or does Mom and will they agree on petcare rules? When/where can they drink/smoke/watch football?
Have an exit strategy. How will they know it isn't working anymore? How much notice does either side need to give? If they are "terminated for cause" do they have to get out right away, but if Mom passes or goes into care can they stay 90 days but have to pay for utilities and food?
Note: the wife may be extra cranky because she doesn't think her husband will do his half of their hours. So in my example she'd end up with all 32 overtime hours and he'd just do 40 hours a week.
If it makes Mom happy and she can afford it, I'd say build in opportunities for pay increases and respite care for time off. Keeping her in her home with 24 hour care may just cost more than institutional care.
- They are performing a job and should be getting paid for hours worked with benefits and full reporting to tax authorities in the quarter or year of work. That’s how employment works in the US.
- Your mom can in her will put in a bequest to them (or whomever she wants to) but there is no guarantee that mom will die with assets or with enough assets to do a distribution as per the terms of the will.
- Getting old in America is very $$$$ expensive. At 93, she’s outlived the actuarial tables, so she could live to 94 or 104. If, imho, she gets close to 100 she could outlive her money between the costs of care and costs to upkeep her home & other assets unless she has for sure 1M+ liquid. Otherwise there’s risk might not be $ left in the estate.
What your nephews wife wants (she’s driving this notion, isn’t she) is beyond egregious. $20k PLUS free room & board, right?
+ $1000 for food. Just u wait Lil Missy is gonna be asking for a car...
Lil Missy is not professionally degreed in anything, is she? FFS 10k a mo is what a MsRN makes. She either a blatant opportunist or is really dumb as a sm box of rocks. I’d suggest that your brother gets a private investigator to run a bkgrd on her to find out which one it is.
On the “for profit bills 20k a mo”.... well the for profit agency actually pays their workers maybe 40-55% of the 20large. The company does full FICA, workmans comp, retirement, health insurance and Covid compliance. They likely also do some type of training, like w Red Cross to have their staffing certified. For 20K, the agency is able to cover all shifts should a scheduled worker have their own emergency, like that morning they a running a temp of 100 so cannot work safely due to Covid concerns. Nephew & his wife provide NONE of this.
Again 20k a mo + free R&B + food $ is beyond egregious.
None of the trio are professionals or have licenses, they are baseline workers. In the private sector, I bet they would get paid $10 -$14 hr with benefits taken out from the $, $20-25k a yr. Its a low wage job. Home health companies are always looking for workers, you can probably easily go onto your states Dept of Employment Security and look at jobs posts as what hourly wage places like this are paying. Caregiving is basically viewed as low skill scut work w/low wages, unless your degreed or licensed. Right now at $100 day every day, they are both making 36k a year, that’s a decent income in the US especially as they have no rent to worry about.
Question for you..... for last year when Lil Missy & your nephew & the niece worked to care for your mom, did you - as your moms DPOA - report all in moms 2020 taxes? And did you as DPOA have all 3 do W-9 & maybe I-9s? Did mom pay FICA on the wages?
If not, you might, might be able to get past this for 2020 taxes, but for 2021 you as moms dPOA must do all the reporting and FICA quarterly payments as per IRS regulations. IRS rules on household workers as being employees and NOT as contract labor is pretty clear. Its not just an IRS issue but if your mom should find herself actually outliving her money (it happens) and mom needs to apply to Medicaid to pay for her room & board at a facility, cause shes now 96 and her needs are beyond staying at her home is feasible for, then all that $$$ paid to lil Missy, your nephew & niece will be viewed by Medicaid as “gifting” by mom and make her ineligible for Medicaid for a long penalty period. Mom has to have a legit caregiver agreement and proper payment with FICA & IRS reporting to get beyond this. Medicaid has a 5 year lookback.
I assume that you will take out taxes, pay SS, etc? Your mother becomes an employer and is responsible for maintaining Worker's Comp insurance and an adequate umbrella policy in case of injury.
You are, in essence, asking nephew and his wife to give up their lives and privacy. Are you sure they want to do this? Maybe they are asking this amount so that the answer will be no?
Find out what level of care mom needs from the local Area Agency on Aging (called a "needs assessment"). Is she at the point that she needs skilled nusing ($11k per month where I live) or Assisted Living with some add on services? Find out the cost for that. She would have better socialization in those settings.
The $15,000 from the estate looks dodgy. The caregivers should be paid as they go and not try to dodge payroll and income tax. The recipient may be able to deduct some medical related payments if she itemizes.
Using the for profit's $20,000 as a benchmark should also require matching their other assumptions:
- payroll processing
- payroll tax matching
- insurance (liability and workers comp)
- substitute caregiver pool
- no guests/pets in client's home; personal property allowed in bedroom if overnight
- meal prep may include eating with client depending on shift length
- light housekeeping, including client's personal laundry