Housing
It is the wish of most seniors to stay in their own home as long as is possible. Knowing what assistance is available to achieve this goal is an important part of making it happen.
The first step is to make a clear-eyed analysis of what you will need, what personal resources you have available, and what gaps exist between what you need and have. Of course, enough money can fill nearly every gap, but unless you are a Rockefeller, affording long term, around-the-clock private nursing isn't an option.
Assessing Needs
You need to assess your needs for both the short and long term. Did you break your arm and you just need help getting dressed until the cast comes off, or do your failing eyes mean you need to plan on how to remain independent without a car?
Is your house ready for you to age with it? Do you still need to climb a ladder each spring and fall to switch screens and storms? Is the number of stairs in your current home going to be an insurmountable barrier to you in the future? One smart step to take now is to install aids designed to prevent accidents in your house, particularly in the bathroom. Studies have shown that the majority of falls in the home happen in the bathroom. Pilot projects done by HMOs have found that spending money to retrofit all older HMO members' bathrooms with grab bars actually saved money in medical bills. If it worked for them it can work for you too. Preventing the broken hip or wrist will make it much easier to achieve your goal of remaining in your home.
When assistance in the home is needed, knowing how you can afford to pay for it becomes important. First, explore all services available through your insurance or through Medicare or Medicaid. As managed care becomes more widespread, the array of services available is changing dramatically. If providing you with physical therapy in your home for one hour a day can avoid the cost of future surgery, or a nursing home stay, the managed care provider may be interested in covering the physical therapy.
Resources Available
Second, explore what supplemental services are available through the senior services network. Some level of home health care, home delivered meals and home chore assistance is available across the state. Tap into the aging network by contacting your local senior center or Area Agency on Aging, to determine what is available to you in your community. Family, friends and others in your personal network can also help fill the gaps in support and services needed.
If gaps remain after pursuing the above resources, you need to determine if, and how long, you can afford to purchase the needed services. This decision is an ever-changing balance between the value of your independence and the cost of maintaining it. For some, maintaining a home, although perhaps not the same one, means a move to a condo, an apartment, or a smaller house. For others, staying in the familiar home is worth the comparative loss of independence that comes with depending on someone else for shopping and cleaning. Facing these choices and determining for yourself what you prefer is the best way to advance smartly on this very difficult decision.
Hiring Home Help
At the point of hiring help in the home, the smart consumer needs to take into consideration the following rules on employees versus independent contractors. If you hire help to provide housekeeping, personal needs or other services in your home you may be liable, as an employer, for employment taxes. Your liability depends on whether the worker is legally your employee or on his/her own. Generally, if you have the right to tell the worker what to do, how, when and where to do it, then the worker is considered an employee. Other points that help decide if the worker is your employee are: do you have the right to hire and fire, do you provide the tools and equipment for the worker to use, do you set the hours of work, and do you pay by the hour or week?
If the worker is employed by someone else to perform services in your home, you are not liable as the employer. For example, if you hire help through a temporary agency or home help agency, you are not considered the employer. Also, you are not considered the employer if the person working in your home is self-employed. It is not enough to say that the worker is a self-employed independent contractor. The facts must show the worker really is self-employed. Does the worker advertise to the general public? Does she work for more than one person at a time? Does she provide her own supplies, and receive payment on a job by job basis? If so, it is more likely that she is self employed. As a general rule, it is difficult to prove to the government that a household worker is self-employed. You take the risk that fines or penalties will be imposed for treating a worker as an independent contractor rather than an employee. To comply with the various laws you may need the assistance of an accountant.
If you are an employer you may be responsible for payment of the following:
- For 2006, all wages paid to an employee up to $94,200 per year, are subject to Social Security and Medicare Tax.
- FICA/Medicare Taxes. There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. The total amount is to be sent into the IRS every quarter. A W-2 form needs to be filed at the end of the year.
- Unemployment Taxes to both the state and the federal government.
Michigan. The state unemployment tax applies to employers who pay $1,000 or more to domestic workers in any quarter of the year. The tax is paid to the Michigan Unemployment Insurance Agency (UIA) of the Department of Labor and Economic Growth.
Federal. If you are a household employer, you must pay Federal Unemployment Tax (FUTA) on wages that you paid to your household employees only if you paid cash wages of $1,000 or more in any calendar quarter. To pay the tax, file form 940 with the IRS.
- Workers’ compensation insurance. Workers’ compensation insurance is required if you have at least one worker for 35 hours a week for at least 13 weeks a year. Workers’ compensation insurance is purchased from a private insurance company. If you do not need to provide workers’ compensation, you should still protect yourself by having coverage for injuries to a household worker under your homeowner's insurance policy. You should review your policy and check with your insurance agent. You can obtain information about workers’ compensation insurance by calling the Worker's Compensation Agency, (517) 322-1105.
- Citizenship/Legal Alien Status. Employers must verify that each new employee is legally eligible to work in the United States using form I-9 from the U.S. Citizenship and Immigration Service. The forms and instructions can be obtained from U.S. Citizenship and Immigration Service in Detroit at (313) 259-8560. Information and the forms can also be found on their website at: www.uscis.gov.
- Minimum Wage/Overtime state and federal government regulations.
Michigan. The Michigan minimum wage/overtime law may apply if you are exempt from federal law. State law applies if you have two or more employees at the same time within a calendar year. As of October 1, 2006, state law requires $6.95/hour minimum wage and time and a half for hours over 40 in a work week. Information is available from the Michigan Department of Labor and Economic Growth (517) 322-1825.
Federal. The federal law generally requires that household employees be paid the minimum wage of $5.15/hour and time and a half for hours over 40 in a work week. However there is an exception for companions (not trained professionals) hired to care for ill or aged individuals in the home. Information is available from the US Dept. of Labor at (866) 487-2365.
If you are subject to either the federal or state law there are specific record keeping requirements regarding employees’ hours and wages.
If you are paying an employee, you need to get the specific rules for collecting and paying the above taxes and insurance. These are available from the IRS: call (800) TAX FORM (829-3676) and request IRS Publication 926 and related forms.
To receive the instructions and forms for state unemployment taxes, request the booklet Employer's Guide to Unemployment Insurance Taxes from your local Michigan Unemployment Insurance Agency (UIA) office, or call the main office in Lansing at (800) 638-3994.
