Imagine your parents are living well into their later years. And although they can spend some time alone, there will come a day you will need to make a choice; either decide to find assisted living—often transitioning to long-term care, or devise a plan to keep them home with the assistance of a health care agency or a team of health aides.
Such a decision is difficult; even reputable agencies may miss the mark on screening caregivers resulting in inadequately trained or the hiring of dishonest individuals. Then comes the expense; agencies are trying to run a business. Besides the cost of employees, their overhead is haunting, so the consumer is forced into an expensive proposition.
Many families will look for independent health care workers, often found online or through word of mouth. In some instances, these people have organized groups that share valuable experiences and knowledge; unfortunately, more often, their chats and associations breed the exchange of information and techniques for defrauding the tax collector and the families they are supposed to be helping.
I met with one such family who shared their story and experience of the mounting pressure they faced from caring for their parents. Feeling compelled to keep them home, they quickly learned that obtaining assistance was fraught with surprise and legal battles. For this story, we will refer to the couple as Bob and Jane.
“I am constantly having to attend to my parent’s needs, much of which they had been able to do up until recently,” Jane said with a touch of frustration. “It was at the point I was practically working full time on keeping them [mom and dad] safe, showered, and fed. However, my parents didn’t need me much at bedtime.” Bob agreed, “They didn’t need someone around the clock, maybe four or five hours, three or four days a week.”
The couple concluded it was time to find help. Like other families, they sought assistance from their local Counsel on Aging, networked, and called firms that provided services. Beyond that, they decided to follow the letter of the law. Bob and Jane discussed the matter with their Certified Public Accountant (CPA), only to discover they would inherit liability if they were not careful. To make matters worse, they quickly learned that many in the business of freelance health care are attempting to scam the system—right underneath the blind eye of the authorities.
Under Massachusetts law, if you hire an independent contractor to perform duties at your home, give them direction and allocate the time of service, you are responsible for paying payroll taxes, Social Security, Worker’s Compensation, and employer liability insurance. And, if you ignored the mandate and slipped them cash each week, they could report you, or if audited and asked about their earnings, they’d likely tell a revenue investigator they were an employee and that you were withholding taxes.
There have also been cases where individuals have reported questionable injuries while performing direct care or hurt due to a slip and fall or other trauma.
A family hiring a health care attendant becomes an employer. It is a well-known fact in the professional community that in about 99 percent of cases where the state finds an “under-the-table worker” avoiding taxes, it will focus its power and might on the employer, where they will be hit with penalties, fees, and back taxes. In addition, this violation could expand into an audit where other fiscal questions are unearthed about the employer.
Bob and Jane, wishing to avoid this trap, agreed they would pay all expenses, including the taxes owed by an employee too. They believed that the effort of finding someone would be simple by taking away all the tax-pain from a potential new hire and giving them a handsome salary.
The couple’s good feelings, to play by the rules and bring on reliable help, were trashed after months of searching and finally interviewing Sally.
She came with excellent references. “It seemed too good to be true; she [Sally] was agreeable, pleasant, and had a good base of knowledge; we felt comfortable with her coming into my parent’s home,” Jane explained.
During a lengthy interview, according to Bob, the hope of hiring Sally abruptly ended once compensation was put on the table. “I explained that we understood why many in her field don’t want to be bothered with taxes and reporting and we would take full responsibility for all taxes and insurance; all she had to do was provide services and get paid more than an agency would offer her.”
The couple suddenly realized they probably wouldn’t find anyone willing to work as a home health care worker under legal terms. It wasn’t due to the expense of being a legitimate taxpayer, but rather, Sally told them that everyone she knows only accepts cash because they are receiving state benefits, and if they exceed salary guidelines, they will be removed from various state-funded programs.
In the case of Sally, she was masterful at the scam, yet spilling some of the techniques she and others use regularly. She was enjoying a free college education, welfare payments, an EBT food stamp card for her and her children, drove a new car, and had a live-in boyfriend adding to the household income. Unashamed, she was proud to beat the system and wished the couple “Good luck.”
Sally’s starting rate was going to be $27 per hour with all expenses paid; it was shocking to the couple that she opted to “steal” from taxpayers rather than become self-sufficient.
Ironically, the state knows of this dishonest behavior and overlooks it; with an aging population and facts and figures that support the indulgence of independent health care, an investigation would stop the abuse within hours and right this wrong.
Jane, looking upset, said, “The authorities are going after everyone, and now the Biden administration wants to overhaul the ‘gig’ economy.” Yes, they will turn up plenty of money and abuse, but here we have a cottage industry, bilking taxpayers millions of dollars, and they [government officials] ignore the obvious.”
Bob added, “Sally was forthright in telling us we wouldn’t find what we want because the group she interacts with are keen on the system, and they know how to manipulate it…worse, we are probably on a list that indicated we won’t pay cash.”
This topic should concern every citizen; the fact that earnings aren’t being reported, taxes evaded, plus cases of abuse of government services are being ignored is reprehensible.
In practically every neighborhood—every day, a person performs health care services and can be seen entering and exiting homes. It makes sense to stop the illicit activity by setting a few examples of those using the system for personal gain and taking advantage of the elderly and their adult children. Because these “health care worker communities” are tightly knitted, it wouldn’t be long before the workers telegraph news that it isn’t safe to accept cash and get on the straight and narrow. Unfortunately, the State of Massachusetts, as with many, would rather ignore the easy-to-extinguish fraudulent activity and wait until a problem arises, so they can be guaranteed payments by financially secure citizens who were desperate to find care for their elderly parents. Word of advice; “Let the buyer beware.”