Is Paying My Son to Build Me a Ramp “OK”?

Let’s set the scene: Archie is 89 years old. He and his wife, Edith, have been living in their home for the past 65 years. Recently, Archie has been struggling physically, and his dementia has significantly progressed. Their son-in-law, Mike, built a ramp so Edith could safely help Archie into the house. Their daughter, Gloria, has been helping with Archie’s personal care because Archie won’t allow Edith to. Now, all of the family has come together and decided it’s time to ask for help through the Family Care Program to have professional providers assist because Archie’s temper has scared Edith too many times. Archie and Edith believe they financially qualify for Wisconsin’s Long-Term Care Medicaid benefits, but when they apply the Medicaid caseworker asks about the $5,000 check to Mike and the various checks wrote out to Gloria because they think these should be considered “divestments.” Edith calls Gloria in a panic asking what to do!

Paying relatives for services is a topic of concern for many individuals looking to utilize Wisconsin’s Long-Term Care Medicaid benefits. Whether it’s paying one child for personal care or another child for their handy-man skills, the simple answer to whether or not that is “OK” is often “yes.” That said, there is a caveat to that answer. When applying for Medicaid benefits in Wisconsin – including in-home, assisted living, and nursing home care – payments to family are highly scrutinized as to whether or not they are considered a “divestment.” Well, what does that scary word mean? According to the current Wisconsin Medicaid Eligibility Handbook, divestment is the act of transferring ownership of assets or income and receiving less than fair market value in return. Most often, the simple way to describe this is that it’s a gift. You give the gift and you get nothing (or less than the gifts’ value) in return. Divestments (or gifts) result in penalty periods which are periods of time that Medicaid will not pay for your long-term care despite the fact that you need it. 

To avoid Medicaid caseworkers deeming services or care provided by family as a divestment, proactive steps, such as consulting with an elder law attorney, should be taken before the service or care occurs. If, like Archie and Edith, payments are identified after the fact, there still may be hope if the amount of the payments falls under a certain threshold and don’t exceed reasonable compensation for the services that were provided.   

If you or your family are in a situation like Archie and Edith, or you have questions or concerns related to Wisconsin’s Long-Term Care Medicaid benefits or other elder law issues, contact our office to schedule a time to talk to one of our elder law attorneys. We are here to help.

*** LINK TO MEH CITATIONS

For Divestment:

https://www.emhandbooks.wisconsin.gov/meh-ebd/meh.htm#t=policy_files%2F17%2F17.1.htm

For the Exception:

https://www.emhandbooks.wisconsin.gov/meh-ebd/meh.htm#t=policy_files%2F17%2F17.2.htm