New Ideas for Supporting Caregivers

Posted by in Personal Finance.

caregiver financial assistance

People who commit their time, energy, love, and resources to care for a friend or relative are also sacrificing their own future retirement income. One congresswoman has proposed an amendment to the Social Security Act in an attempt to compensate our caregivers when they need it most.

Caregiving is deeply ingrained in the fabric of American culture. Here are a few stats from the CDC:

+ More than 34 million unpaid caregivers provide care to someone age 18 and older who is ill or has a disability (AARP, 2008).

+ Unpaid caregivers provide an estimated 90% of the long-term care (IOM, 2008).

+ The majority (83%) are family caregivers—unpaid persons such as family members, friends, and neighbors of all ages who are providing care for a relative (FCA, 2005)

+ The out-of-pocket costs for caregivers who are caring for someone who was age 50 or older averaged $5,531 in 2007. About 37% of caregivers for someone age 50 and older reduced their work hours or quit their job in 2007 (AARP, 2008).


Because Social Security benefits are tied to earnings, the lost income that caregivers incur in the present is compounded in the future.

Paula Span recently wrote about one congresswoman’s push to address this problem in The New York Times:

“Earlier this month Representative Nita M. Lowey, Democrat of New York, introduced what she’s calling the Social Security Caregiver Credit Act, intended to increase retirement income for middle-class citizens who must reduce their work hours or leave the work force because of caregiving duties.

The law would work this way: If you provide at least 80 hours a month of unpaid care for a “dependent relative,” you get a credit added to the earnings on which the Social Security Administration bases your future retirement benefits.

Span cites studies that show caregivers can forgo north of $144,000 in retirement benefits if they stop working to care for a loved one. Clearly, there is a need to help caregivers cope with their financial sacrifices, especially when there’s little anyone can do to help them emotionally and physically. Span worries that whether Rep. Lowey’s solution is a perfect one might not be worth debating; she doubts the bill will make it through the gridlocked House of Representatives. But there is no doubt that the need is there. It’s an issue that we should all consider, because caregiving will likely be a part of all of our lives at one stage or another.

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