WASHINGTON—U.S. Senator Chris Murphy (D-Conn.), a member of the U.S. Senate Health, Education, Labor, and Pensions Committee, and U.S. Representative Nita Lowey (D-N.Y.), Chairwoman of the U.S. House of Representatives Appropriations Committee, on Tuesday introduced legislation that would allow caregivers to receive a social security credit. The Social Security Caregiver Credit Act would provide retirement compensation in the form of Social Security credits to individuals who left the workplace to care for their loved ones.
”Working less means fewer paychecks and not paying into Social Security, but that shouldn’t be the case for those who take time off to care for loved ones. Right now, the system is set up to penalize caregivers by docking their Social Security benefits putting them in a financial hole that’s tough to recover from,” said Murphy. “I’ve heard from families firsthand across Connecticut who struggle with this, and we must do better to support our caregivers who sacrifice so much. That’s what this legislation aims to do. It’s time we find a comprehensive approach to support aging people and start to see caregivers as a co-equal partner in this.”
“More than 60 million caregivers in the United States are forced to make the torturous choice of earning a paycheck or caring for a loved one. This penalty is especially troubling for women, who make up two-thirds of unpaid caregivers,” said Lowey. “I introduced the Social Security Caregiver Credit Act to prevent more Americans from having to jeopardize their financial security in order to care for a family member. This bill recognizes that millions of hardworking Americans sacrifice their own economic well-being to take care of others and ensures they are not financially punished for their services.”
Tens of millions of Americans leave the workforce entirely or reduce their hours significantly to care for loved ones at some point in their career. Studies indicate that, on average, income losses due to caregiving total more than $300,000, threatening retirement security. Women, who make up two-thirds of unpaid caregivers, are disproportionately impacted. More than half of Connecticut residents age 40 and older say they have provided care on an unpaid basis for an adult loved one.
The Social Security Caregiver Credit Act will create a credit that would be added to an individual’s earnings to calculate their future Social Security benefits. In order to qualify, caregivers must provide care for a minimum of 80 hours per month to a parent, spouse, domestic partner, sibling, child, grandparent, grandchild, aunt, or uncle who cannot perform daily living activities without assistance. The credit, which individuals can claim for up to 60 months, is progressive and would vary on an income-based sliding scale. A caregiver’s Social Security credit will decrease in value as the caregiver earns closer to the average national wage. The credit will phase out when the caregiver earns more than the average nation wage. Individuals who do not earn an income will receive a maximum credit equal to half of the average national wage.
In November 2017, Murphy introduced a report called “Supporting our Caregivers: Policies and resources for Connecticut families caring for a loved one.” This report cites mounting costs and increasing burdens—such as the Social Security tax—placed on family caregivers and makes it clear that congressional action is needed.
This legislation has been endorsed by the following organizations: The National Council on Aging, The National Organization for Women, The National Alliance for Caregiving, The Sibling Leadership Network, The National Association of Area Agencies on Aging, Social Security Works, Autism Speaks, Latinos for a Secure Retirement, and The Arc of the United States.