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Yes! Absolutely!

A written contract spelling out your services and mother's payment will prevent this money from being considered a gift, if it is ever necessary to apply for Medicaid.
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Yes, it has to be medically necessary as determined by her doctor so it does not impact Medicaid eligibility if needed in the future. This is not a do it yourself project of preparing the care agreement. Get an elder law attorney to prepare it.
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It is legal and acceptable to be paid. Medicaid is the sticking point: how will they view it? If they view it as a transfer of money, rather than payment for services rendered, then they might seek to get that money paid back if your loved one goes into a nursing facility on Medicaid. We got an elder law attorney to draw up a service contract that lays out what services we provide -- room, cleaning, meals, personal hygiene, laundry, 24/7 onsite care -- in return for his payment. As the attorney said, we are the Gold Standard of elder care: at home, one on one care, meals fixed as he likes and served when he wants them, his own bed in his own room, lots of privacy and even a dog he likes a lot. He's getting a bargain; we're not spending down our retirement money to provide this care; and all of this is lots cheaper, thousands of dollars cheaper, than any NH. The state would rather he were being cared for here at home than taking up a bed.

The point of the contract is so the money we're being paid is looked at as an exchange for his benefit, not as a simple transfer of money for our benefit but that is not in his interest. His money; his benefit. And while that can be the case without a contract, that's harder to prove. "Well, you say it was for his care, but...." I've heard Medicaid can be picky about this kind of thing, which is why we went with a lawyer and a contract.
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Yes, if you have a contract signed by both of you.
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Are you sure, Glad? My son is a handy man for a living. He does a lot of things for me. He gives me a family discount, but I do pay him. Since I don't have a doctor's order that cleaning my gutters is a medical necessity, does that mean what I pay my son would be considered a gift if I need to apply for Medicaid? Seems odd. It wouldn't be considered a gift if I paid a different handy man firm.

And couldn't I pay my daughter to make meals or clean my house, even if I wasn't medically incapacitated? That medical necessity thing must just apply to certain services, huh? I guess that is where getting a lawyer comes in.
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