Yes, your father can pay you. It is best that you enter into a written contract that describes the care, housing, and other services you will provide and how much he will pay.
In terms of how much he should pay, you will need to ask in your community what it would cost to hire someone to provide similar care. You probably won’t be comparing apples and apples, since someone coming into the house will probably be paid for all the hours they are there, while you will probably be caring on a more intermittent basis throughout the day, but do the best you can to figure out how much time you are actually caring for your father.
Finally, you will need to report the payments as income on your taxes since your father will be paying you like any other employee or contractor. If you follow all these steps and are able to document them, the payments should not be considered a gift by Medicaid, and you should not run into any problems.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.