The United States relies on uncompensated family caregivers to provide most of the long-term care required by older adults as they age. But such care comes at a significant financial cost to these caregivers in the form of lower lifetime earnings and diminished (or even no) Social Security retirement benefits, ineligibility for Medicare coverage of their healthcare costs, and minimal retirement savings. To reduce the impact of uncompensated caregiving on the intergenerational transmission of poverty, this paper discusses three possible mechanisms of compensating family caregivers: public payments, deemed wage credits under Social Security, and income tax incentives.
S. C.Reinhardet al., AARP Public Policy Institute, Valuing the Invaluable: 2015 Update1 (2015), available at <http://www.aarp.org/content/dam/aarp/ppi/2015/valuing-the-invaluable-2015-update-new.pdf> (last visited July 10, 2018). See also A. V.Chariet al., “The Opportunity Costs of Informal Elder-Care in the United States: New Estimates from the American Time Use Survey,”Health Services Research50, no. 3 (2015): 871-882, at 878 (estimating the opportunity cost of such services at $552 billion per year).
Women caregivers have particular difficulty rejoining the compensated workforce after their informal caregiving responsibilities conclude. See E. K.Pavalko and J. E.Artis, “Women's Caregiving and Paid Work: Causal Relationships on Late Midlife,”Journal of Gerontology: Social Sciences52B, no. 4 (1997): s170-s179, at s177.
9.
See Journey of Caregiving, supra note 5, at 12. The comparable figure for a male caregiver was $284,000.
C.Wakabayashi and K. M.Donato, “Does Caregiving Increase Poverty among Women in Later Life? Evidence from the Health and Retirement Survey,”Journal of Health and Social Behavior47, no. 2 (2006): 258-274, at 268 (emphasis added).
23.
See N. L.Linsket al., Wages for Caring: Compensating Family Care of the Elderly (New York: Praeger, 1992): 253.
24.
See Journey of Caregiving, supra note 5, at 17 (noting that family caregivers enter that role “suddenly and unexpectedly, the result of a crisis”).
Cf. 38 U.S.C. § 1720G(a)(3)(C)(ii) (2012) (requiring that stipends paid to family caregivers of U.S. veterans be “not less than the monthly amount a commercial home health care entity would pay an individual in the geographic area of the eligible veteran to provide equivalent personal care services.”)
28.
See N. L. Linsk, supra note 23, at 190-191.
29.
See R. J.Newcomeret al., “Allowing Spouses to Be Paid Personal Care Providers: Spouse Availability and Effects on Medicaid-Funded Service Use and Expenditures,”The Gerontologist52, no. 4 (2012): 517-530, at 518.
30.
See U.S. Department of Health and Human Services, Understanding Medicaid Home and Community Services: A Primer132 (2000), available at <https://aspe.hhs.gov/system/files/pdf/73101/primer.pdf>(last visited July 10, 2018).
31.
Such benefits are exempt from federal income taxation as “difficulty-of-care” payments described in I.R.C. § 131(c). See I.R.S. Notice 2014-7, 2014-4 I.R.B. 445.
32.
See Caregivers and Veterans Omnibus Health Services Act of 2010, Pub. L. No. 111-163, § 101(a)(1), 124 Stat. 1130, 1133 (enacting 38 U.S.C. § 1720G(a)((3)(A)(ii)(V), (C)).
33.
S. 786, 114th Cong. §§ 5, 7 (2015).
34.
Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010).
35.
42 U.S.C. §§ 300ll to 300ll-9 (Supp. V 2011) (enacted as part of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 8002, 124 Stat. 119, 828-47 (2010)).
36.
42 U.S.C. § 300ll-4(g) (Supp. V 2011).
37.
42 U.S.C. §§ 300ll-1, 300ll-2, 300ll-4 (Supp. V 2011); see generally R. L.Kaplan, “Financing Long-Term Care After Health Care Reform,”Journal of Retirement Planning13, no. 4 (2010): 7-16, 43, at 7.
38.
See R. L.Kaplan, “Analyzing the Impact of the New Health Care Reform Legislation on Older Americans,”Elder Law Journal18, no. 2 (2011): 213-245, at 231.
AP Survey, supra note 1, at 11. See also “Poll: Women Age 50+ Want Social Security Beefed Up Now,”AARP Bulletin, September2016, at 4 (reporting that “2 out of 3 women believe that Social Security should be changed to create a credit for people who take time off from work for caregiving responsibilities.”).
48.
National Academies of Science, Engineering and Medicine, supra note 4, at 7-12.
49.
AP Survey, supra note 1, at 11.
50.
I.R.C. § 213(a), (d)(1).
51.
See id. § (d)(1)(C).
52.
See id. § 7702B(c)(1).
53.
See id. § 213(d)(11)(A).
54.
See id.
55.
M.Parisi, “Individual Income Tax Returns, Preliminary Data, Tax Year 2015,”Statistics of Income36, no. 4 (2017): 2-11, at 2.
56.
I.R.C. § 213(a). The applicable threshold for 2018 is 7.5% of adjusted gross income. Id. § 213(f).
57.
See R.L.Kaplan, “Federal Tax Policy and Family-Provided Care for Older Adults,”Virginia Tax Review25, no. 2 (2005): 509-562, at 551-559.
58.
Family Caregiver Relief Act of 2003, S. 1214, 108th Cong. (2003).
59.
Credit for Caring Act of 2017, H.R. 2505, 115th Cong. (2017); S. 1151, 115th Cong. (2017).
