As much as you might like, we can’t ignore clients paying mom/dad’s home health aides “off the books.” Trusted advisors might be inclined to let slide the comment: “Mom’s/Dad’s aide is being paid in cash (a.k.a. “off the books”) but you do so at your peril.” Clients need to be told that times are changing; aides need to be paid on the books, taxes taken out, and unemployment, disability and social security paid.

Why?

Times changed; my sense is that with the IRS cracking down on “independent contractors”, household aides are an easy target. I know of instances where the senior, or his/her son or daughter, paid the aide and tried to claim a health exemption. Bad move. Even if taxes are not an issue, disability, social security and personal liability are an issue for the “employer” who pays “off the books.”

Unlike other household employees, aides’ relationships with families is often of short duration. Aides may want to get paid in cash and the family feels they have no choice. Or, the family is already stressed and tells the aide, “I can’t handle more paper work.”

Further, back injuries incurred while lifting and turning patients are common and not covered by homeowner’s insurance. The injury is not covered by homeowner’s policies and the client is stuck with a hospital bill and government troubles. If all goes well during the senior’s life, the problems of unpaid taxes, social security, disability, and the like can arise during probate.

Ask yourself: if you fail to counsel the client properly, are you putting yourself and the client at risk? In my opinion, it’s too risky to let the comment pass… when a client says they are “paying off the books,” take care!