Family caregivers are now spending on average 20 percent of their income providing care to a family member or other loved one, according to a new AARP Research Report, “Family Caregiving and Out-of-Pocket Costs: 2016 Report.”
The situation is so dire that, the report said, caregivers may be putting “their own economic and retirement security at risk” by stepping up to help a loved one. Hardest hit are Latino and low-income family caregivers who are spending an average 44 percent of their total annual income to care for aging relatives.
On average, family caregivers spend $6,954 in out-of-pocket (OOP) expenses. The AARP report was based on a survey of 1,864 caregivers.
“As a nation, we need to do more to support America’s greatest support system. Passing the bipartisan Credit for Caring Act that provides a federal tax credit of up to $3,000 would give some sorely needed financial relief to eligible family caregivers,” said AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond. “Whether helping to pay for services or make home modifications, the costs can be enormous and may put their own economic and retirement security at risk.”
The report also found that family caregivers of adults with dementia reported nearly twice the OOP costs ($10,697) than those caring for adults without dementia. Long-distance family caregivers had the highest OOP costs at $11,923 compared with family caregivers living with or nearby their care recipients. Presumably this is because they must pay for outside services.
Family caregivers report dipping into savings, cutting back on personal spending, saving less for retirement, or taking out loans to make ends meet. More than half of family caregivers reported a work-related strain such as having to take unpaid time off.
While a tax credit would certainly be nice, much more help is needed ― including caregiver relief, medical training for the tasks family members now must do, and Social Security credits to make up for the loss of benefits resulting from when caregivers must drop out of the workplace.
And for those wondering, caregiving relief was barely discussed in the recent presidential election. On his website, President-elect Donald Trump said he would rewrite the tax code to allow workers “to deduct from their income taxes child care expenses for up to four children and elderly dependents.” And he would “allow parents to enroll in tax-free dependent care savings accounts for their children or elderly relatives.” That’s it, folks.