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Economic Challenges Facing Caregivers

Karren J Pope-Onwukwe


  • Elder Women's Financial Struggles: Many older women, often caregivers, face financial challenges with Social Security income below $800.
  • Historical Disadvantages: Caregivers, predominantly women, were excluded from economic safeguards like minimum wage and Social Security.
  • Advocacy for Change: Legislation like the Social Security Caregiver Credit Act aims to address caregivers' financial concerns.
Economic Challenges Facing Caregivers Vesalainen

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One of the most troubling realities of my practice as an elder law attorney is meeting with an older woman and discovering that her monthly Social Security income is less than $800. Usually this is a woman who served as a caregiver for relatives and friends.

According to the Family Caregiver Alliance (, approximately 75% of caregivers for friends and older family members are female. And of the 2.4 million grandparents who live with and are responsible for grandchildren, 63% are women. How does a woman wind up in a financial purgatory during the golden years of her life?

Caregivers have been historically left out of protections of minimum wage, paid sick leave, and Social Security because the government excluded them from these basic economic security safeguards. Under The New Deal, the Social Security Act of 1935, and the Fair Labor Standards Act, which created unemployment benefits, domestic and farm workers were excluded. This meant that domestic work and home caregiving which has largely been done by women (especially women of color) can leave older women impoverished even if they worked every day of their adult life.

As you work and your employer withholds and matches contributions, you earn Social Security credits. In 2021, you earn one credit for each $1,470 in earnings — up to a maximum of four credits per year. The amount of money needed to earn one credit usually goes up every year. Most people need 40 credits (10 years of work) to qualify for benefits.

If you work as a domestic or home caregiver, your income and credits are credited differently (, so you do not accumulate money at the same rate for your golden years. According to the Social Security Administration, “a household worker will earn Social Security credit only for earnings of at least $2,400 from each employer. For example, a household employee who worked for three employers and was paid $900, $1,100, and $2,400 respectively (a total of $4,400) would receive only one Social Security credit with $2,400 posted to their Social Security record.” What is even more egregious than the inequitable calculation of the household employee credit is the amount of family caregiving that is provided with no compensation and no Social Security credits earned.

In a report prepared for the Institute for Women’s Policy Research, Elaine Fultz, Ph.D., a consultant on Social Security, examined Pension Crediting for Caregivers (“PCC”) programs that are being used in seven countries. This program is most often provided to mothers of young children but also to fathers, adult children, grandparents, or unrelated caregivers. The goal is to increase one’s pension later in life by compensating for periods of unpaid work when the caregiver is not making any pension contributions. The countries examined were Canada, Japan, Finland, France, Germany, Sweden, and the United Kingdom.

While PCC is often touted as a way of compensating a woman for time spent out of the workforce, this report’s analysis points to strong advantages of allowing accrual of PCC even if the woman continues to work. This enables a caregiver to increase her family’s current income at the same time she increases her old age pension record by receiving PCC. This program or some type of Social Security reform is needed to recognize the value of unpaid work, the rearing of children, and informal care for the elderly or disabled, and to rectify the problem of mothers/caregivers living in a financial purgatory during their golden years.

In May 2021, U.S. Senator Chris Murphy (D-Conn.), a member of the U.S. Senate Health, Education, Labor, and Pensions Committee, reintroduced 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 workforce to care for their loved ones.

According to Senator Murphy, “…. [M]ore than 1 in 5 Americans are currently involved in family caregiving to loved ones who are ill, disabled, or elderly, and 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 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.

As the COVID-19 pandemic continues, the number of people in the American workforce who are jeopardizing their economic future is increasing exponentially. A new Bipartisan Policy Center and Morning Consult poll shows the COVID-19 pandemic continues to have a massive impact on the workforce as millions of workers have reduced their working hours or stopped working altogether due to caregiving responsibilities. Parents with young children, as well as Black and Hispanic caregivers, have been impacted the most. Caregivers who have access to paid family leave (PFL) benefits have been better able to manage work and caregiving.

The poll found that of people who stopped working during the pandemic, 15% – or 10.6 million workers – said that caregiving responsibilities was a cause. Among those who reduced their hours, 16% – 11.7 million workers – cited caregiving as a reason. 8 to 11% of workers who stopped working and did not look for new work cited caregiving as a cause. This data suggests that 3.4 to 4.6 million workers dropped out of the labor force during COVID-19 at least in part due to caregiving.

In the Spring 2021 issue of the NAELA Journal, published by the National Academy of Elder Law Attorneys, Aviv S. Bliwas wrote “Why We Are Failing Family Caregivers,” chronicling her caregiving experience, “In October 2009, I joined the ranks of approximately 1 in 5 American adults who serve as informal, unpaid family caregivers. First, I cared for my mother, who was dying of breast cancer. While I was caring for my mother, my father was diagnosed with cancer, complicated by pneumonia and multiple infections to which he eventually succumbed in March 2011. Becoming a caregiver for my parents at age 28 was like learning to swim by being tossed into the deep end of the pool. I spent that 16-month period trying to keep everything going minute by minute. There was absolutely no time to plan a course of action or figure out the next step; I was simply reacting to the next crisis. For both of my parents, caregiving started with a medical emergency that landed each in the hospital.”

Bliwas went on to write “The data is clear that informal family caregiving serves the public good. It saves our country money, it supplements our health care and caregiving industry with a much-needed labor force, and many families obtain emotional satisfaction from caring for a family member. It is in our national interest, therefore, to promote and support family caregivers. What we have now is not working; we must do something more.”

Her experience with family caregiving started out as most, a response to a family crisis. It was not until she had weathered her storm that she was able to look back on the experience and analyze it and make recommendations. Unfortunately, if she dropped out of the workforce to take care of her loved ones, the damage to her future economic security would not be evident until she is ready to retire.

Even women like Bliwas, who work in professions that pay into Social Security, lose money when they leave the workforce if they become pregnant, stop work to raise children, or stop work to provide caregiving for a family member. Women, particularly women of color, have suffered under this economic disadvantage in the American workforce since the days of The New Deal.

They have been systemically relegated to a loss of economic security and a pathway to a better life by working in jobs such as domestic workers and personal caregivers which were excluded from the Social Security system when it began and continues to be a weird subset of Social Security. Ironically, as a result of the global pandemic, there is a glimmer of hope that this inequity in our economy may be on the brink of being changed. Maybe it is true that every cloud has a silver lining.