Q: Grandmother was paying $14k/month to private homecare agency so I (grandson) moved in to take over her care before she ran out of savings. She has paid me $2,400/month for the same care, and I have reported the money on my taxes as income. She now needs to go to a nursing home, but will only be able to pay out of pocket for a few months. Over the 18 months I’ve cared for her, she has paid me a total of about $40k. I know that if she had just been giving me her money, we would not be eligible for Medicaid due to the transfer penalty. Is the transfer penalty still a risk given that she was paying me for a service that would have otherwise cost her much more? (Pittsburgh, PA)

A: Very possibly. Be careful. Caretaker payments to family members without proper documentation and receipts can raise red flags with Medicaid and yes can in fact be viewed as a transfer without consideration within five years of Medicaid eligibility. The fact that you reported the income on your tax return is important. You would be safer if you have a caretaker contract signed by grandmother in place that is the type of document approved by Medicaid. You should consult with an elder law or estate attorney before you do anything .