Carl Smith via Getty Images
The Credit for Caring Act, introduced in Congress Friday, would give family caregivers a federal tax credit of up to $3,000 for doing what could otherwise cost the government and other taxpayers billions if they didn't.
The measure, introduced by U.S. Representatives Tom Reed (R-NY) and Linda Sanchez (D-CA), would reimburse caregivers' out-of-pocket expenses incurred while caring for an aging or disabled relative. Things like home care, adult day care, child care and respite care are included. And while it's a step in the right direction, it's just a baby step.
Caring for the sick and elderly can be a dirty job, but somebody has to do it. In light of the exorbitant expense of skilled nursing home care -- on average $81,000 a year for a semi-private room in 2012 -- and an average nursing home stay of 835 days, or more than two years, families tend to step up themselves to provide that care for their aging relatives. But doing so comes at great personal and financial toll.
America’s family caregivers provide 37 billion hours of unpaid care, valued at an estimated $470 billion annually, notes an AARP Public Policy Institute report. So if family members weren't providing that care, where would it come from?
Family caregivers (age 50 and older) who leave the workforce to care for a parent lose, on average, nearly $304,000 in wages and benefits over their lifetime, the study said. (The total estimated aggregate lost wages, pension, and Social Security benefits of people age 50+ providing parental caregiving is nearly $3 trillion, reported a MetLife study in 2011.) And it gets worse: Evidence suggests that assuming the role of caregiver for aging parents in your own midlife substantially increases your own risk of living in poverty in old age.
So while one hand may be clapping for the Credit for Caring Act -- $3,000 isn't something to scoff at, after all -- the other hand is still extended and asking for more help. Surely we can do better by the nation's 40 million people who are caring for their sick or elderly relatives. The CCA will bring a smidgen of relief. More is needed.
AARP, which supports this measure, offers a list of tax-saving tips for caregivers here.
Related
Before You Go
