Our Ask An Angel correspondent is Arlene Petersen, Life Care Navigation Specialist in the area of senior home care.
Q. I am going to hire a caregiver and a neighbor suggested someone to use. My neighbor told me that this will be cheaper than hiring someone from an agency. I have a few concerns and want to do the right thing. What do you recommend?
A. Itâs not illegal to hire someone privately, although if you do that, you need to understand your risks and then weigh out if they are worth the potential savings.
There are very important considerations to examine when hiring a caregiver, and what your neighbor is suggesting is called paying someone privately. Essentially in those situations you become the employer, and the person you hire privately is technically your employee.
Typically, when someone is hired privately, there are no withholdings taken from their earnings. Be careful though, because the IRS still holds you responsible to report the caregiverâs earnings and pay their tax withholdings. If you still choose to work with someone in this fashion, I highly recommend speaking with your accountant to set up the proper path for tax reporting, such as filing a 1099 on their behalf or W-2. Consider future ramifications that could take place, especially if your caregiver files for unemployment or Social Security benefits and lists you as an employer.
You must also consider any disability claims that might occur while a caregiver is working for you. For instance, what if that private person you hired hurts themselves in your home? What if they cut their finger preparing dinner or perhaps hurt their back if they try to transfer you in or out of the shower or car? Would your homeownerâs insurance cover that incident?
Many might believe that the homeowners insurance would cover that, but it may not. Once you âhireâ someone privately you are now wearing the employer hat and that incident or injury in your home might not be covered by a basic homeownerâs policy. You may have to consider investing in additional homeownerâs coverage or workerâs compensation insurance to protect yourself in those situations of a hurt employee on your property.
I would recommend you check with your insurance company to obtain information on your own policy protection. And since you have your insurance company on the phone, also inquire about your theft protection coverage to make sure you are protected. These are small yet significant things you have to think about if you hire privately, whereas a reputable caregiving agency would already have these things in place to protect you.
Have a question for our angel correspondent? You can send our angel an email to apetersen@visitingangels.com or send your question via mail to Ask An Angel, 65 Woodbury St., South Elgin, IL 60177.
