Family caregivers are financially penalized for providing care

November is National Family Caregiver Month. Currently over 40 million people work as unpaid family caregivers, and as the United States ages this number is expected to increase.

The U.S. Census Bureau reports that by 2030 the number of Americans aged 65 or older will exceed 70 million or 20 percent of the population, most of whom will be living with multiple chronic conditions.

The number of home-care workers available to provide care is insufficient to meet the demand. As a result, the tasks of care provision fall to family members.

As the debate about health-care expenditures takes center stage with looming presidential primaries, it seems that every day we read stories about the burden placed on families supporting loved ones with serious illnesses and disability within our broken health-care system.

One issue that has gotten far too little attention, however, is that family caregivers themselves are financially penalized for providing care in a variety of ways, some of which translate into increased expenditures for all of us.

Family caregivers, especially women, who comprise the majority of family caregivers– frequently suffer deterioration in their physical and mental health. This results in increased morbidity, including depression and anxiety, weakened immunity, chronic illness, obesity, and memory loss. 

Family caregivers typically pay roughly $7,000 per year, which is between 14 and 44 percent of their incomes, on providing care, but they do this with less income. Forgoing promotions and work-related opportunities for advancement may be a difficult choice facing caregivers, even with a supportive and understanding employer.

Those with little or no financial cushion typically also face the least flexibility in work hours, responsibilities and work location.

While family caregivers spend similar amounts on providing care, the financial strain is most pronounced for African-American and Hispanic family caregivers due to lower incomes and less job flexibility. Family caregivers frequently need to cut work hours or leave the workforce altogether for a significant period to provide care. 

As a result, family caregivers do not contribute to Social Security and pension programs during these work sabbaticals, resulting in reduced benefits when they begin collecting benefits of their own. The loss of income and benefits over the course of their lifetimes has been found to be approximately $300,000 — an amount far greater than the average retirement savings of most Americans.

As family caregivers age, their costs for care increase as well, but they have less money to pay for care than those who have not served as family caregivers.

They often take their benefits retirement early to assist with caregiving costs and their own daily living expenses. And when their previously expected retirement date arrives, their benefits may be depleted and their savings exhausted. The next generation of family members is left to step in and assist, paying for care for the previous generation, and the cycle continues.

Paid work leave for assisting family members would help, but that benefit would work best for someone caring for a person with recovery from surgery, for example. It would not make much of a dent in the expenses of someone caring for a person with long-term, chronic illness accompanied by round-the-clock care needs.

What can be done to help?

This past July, Sen. Christopher Murphy (D-Conn.) and Rep. Nita Lowey (D-N.Y.) introduced the Social Security Caregiver Credit Act of 2019. This bill allows family caregivers to receive Social Security credit for serving as caregivers of dependent relatives for up to five years of care provision. The bill earmarks particular funds available to cover the costs of these benefits. It also supports state medical training programs for family caregiver: something many family caregivers wish they had.

This initiative would go a long way toward eliminating a financial penalty for family members who provide care to others. In the words of Lowey, the bill’s co-sponsor and chair of the U.S. House of Representatives Appropriations Committee, “The bill recognizes that millions of hardworking Americans sacrifice their own economic well-being to take care of others and ensures that they are not financially punished for their services.”

Many of us, never thinking family caregiving would be a job that we would need to take on, find ourselves unexpectedly thrust into this onerous role. As former first lady Rosalynn Carter put it, “There are only four kinds of people in the world: those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.” Thousands of us, throughout our lifetimes, may be surprised to be all four.

Ellen Carbonell is program manager and clinical lead at Rush Caregiver Initiative, Rush University Medical Center, Social Work and Community Health. Angela Moss, Ph.D., RN, is assistant dean of faculty practice and assistant professor at Rush University College of Nursing. Barbara Shaw is an assistant professor of Community, Systems and Mental Health Nursing at Rush University College of Nursing. All three authors are Public Voices fellows.