As senior living adapts amid minimum wage pressures and families increasingly face tough financial choices related to senior care, one presidential candidate has vowed to reform tax policies to better support paid and unpaid caregivers alike.
U.S. Democratic presidential hopeful Hillary Clinton on Sunday proposed a set of initiatives aimed at caregiving families and workers, including a tax credit to offset up to $6,000 in costs associated with caring for elderly and disabled family members and an expansion of Social Security benefits to individuals acting as unpaid caregivers for loved ones.
The credit would max out at $1,200 for qualifying families each year, according to a fact sheet on the plan, while the Social Security expansion would allow Americans to accrue credit toward their Social Security benefits when they are out of the paid workforce due to caregiving requirements.
“That will help family budgets stretch, it will help seniors maintain independence,” Clinton said Sunday at a campaign stop in Iowa.
Clinton has also proposed an effort to address challenges faced by workers. Dubbed the Care Workers Initiative, it focuses on skill development, career advancement, wage reform and forums for workers to voice their opinions on the health care system.
Clinton’s plan comes on the heels of a new study that examines three new long-term care insurance options and simulates their costs and distributional effects. Given that families pay more than $100 billion annually in out-of-pocket caregiving expenses, the study explores how policy changes could expand the role of such insurance in the financing of long-term services and support.
“This is a critical issue that isn’t going away: the rising costs of care for an aging population that is living longer and that wants to stay in their own homes,” LeadingAge President and CEO Larry Minnix said in a prepared statement. “In fact, this is an issue that all presidential candidates should be talking about because we now know that there are real solutions for changing the way we finance long-term care.”
As a whole, the four-fold proposal involves:
- Tax Relief: Clinton wants to offer a 20% tax credit to reduce families’ caregiving costs by up to $6,000. Caregivers can claim up to $1,200 through this tax relief plan each year.
- Care Workers Initiative: Clinton’s concept to create a coordinated, government-wide initiative seeks to develop strategies to improve opportunities for caseworkers to garner necessary skills; increase paths to professionalize the workforce through career ladders and apprenticeships; improve rate-setting procedures to guarantee fair wages; and enhance matching services to connect home care workers and families.
- Expand Social Security: Clinton intends to extend Social Security benefits to those who take time off to care for a relative, a period during which they typically do not earn such benefits.
- Increase Caregiver Respite Program: Clinton plans to invest $100 million in the Lifespan Respite Care Act, which authorizes grants to improve respite care access for family caregivers.
The proposal is the latest effort in Clinton’s campaign to emphasize tax breaks for the middle class. She also pitched a tax cut geared toward curbing high health care costs on Friday in Tennessee, which would allow for a tax credit of $2,500 for an individual or $5,000 for a family to cover high health care costs.
Written by Kourtney Liepelt