Monday, July 28, 2014

U.S. House Bill proposed to help caregivers avoid an impoverished old age

From the New York Times, "Addressing Caregivers’ Loss of Retirement Income" by Paula Span, 7/25/2014:

"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."

Passage of the bill is a long shot, but it offers one solution to the financial toll that caregivers pay to take care of a dependent family member. According to the article:

"A MetLife study in 2011, ...estimated that men who reduced work hours to provide care for parents received almost $38,000 less in Social Security benefits. If they stopped working, they gave up more than $144,000.

"The damage from cutting back on work was worse for women: they lost more than $64,000 in Social Security benefits. Leaving the work force to care for a parent cost them more than $131,000 in addition to the lost wages (and, sometimes, pension contributions) themselves."

Caregiver credits would apply to people who earn no more than the national average wage ($44,320 in 2012).

According to Chris Bigelow, Lowey's legislative director, "someone not working at all would get $22,000 recorded as his or her earnings that year; someone working part-time at an annual $33,000 salary gets an additional $5,500 credited. Caregivers could qualify for the credit for 60 months and wouldn’t have to use them consecutively. You could take care of your mother for a year, get a credit, return to work, then later get credit if you cared for your father."

A "dependent relative" includes adult children who are "chronically dependent" and need assistance with activities of daily living.

No comments: