David Wick Law

Currently, the Star Tribune newspaper is running an occasional series of articles titled, “Aging Parents, Stressed Families”, to highlight the difficulties faced by an “immense and often overwhelming challenge” faced by the growing number of family members taking care of parents or other loved ones. According to the first of the series, Caregivers Wear Out, there are 35 million family caregivers who constitute an “invisible workforce that needs to be helped … and supported. They need a break, as if they were on a job.” In contrast to the demographic trend of aging baby boomers (by 2030, in Minnesota, which has one of the nation’s longest life expectancies, there will only be fewer than 3 family caregivers for each family member older than 80) and the smaller number of family caregivers, medical progress is helping all of us live longer and longer. These trends work against one another and will merely exacerbate the family caregiver’s challenges. Already, hospitals, nursing homes, and home-care agencies face a worker shortage. Three times more families need elder care than the workforce can support. The responsibility for care already falling heavily on friends and family will only increase the burden. In Minnesota, according to the Minnesota Board on Aging, 83% of the unpaid long-term care needs of older adults fall to family and friends.

In January, Congress passed legislation, which was signed into law, to develop a national strategy to support families in an aging America. Family caregivers have been described as the United States’ other Social Security. Nearly 60% of today’s family members do work once done by nurses, such as giving shots, providing wound care, and operating special medical equipment. In fact, they spend an average of $7,000 per year of their own money paying for the care of elderly family members. According to LaRhae Knatterud, director of aging transformation at the Minnesota Department of Human Services, “from a purely financial standpoint, we want as many unpaid caregivers as we can get from family and other volunteers.” Accordingly, the government is struggling, implementing, and studying appropriate policies to incentivize family caregivers to take on the caregiving burden without compensation.

After experiencing long-distance family caregiving for aging parents for several years, it is not right that governmental policy should encourage an unpaid and isolated workforce. When engaging in family caregiving which can be an overwhelming, all consuming responsibility, family caregivers’ own career and employment, and even money, is sacrificed. Often family caregivers use up vacation or paid leave offered by their employers to take care of failing loved ones. Working family caregivers are interrupted at work often by frantic parents dealing with daily tasks of living. Even if not contacted for such “emergencies”, family caregiver employees divide their attention between familial duties and employee responsibilities reducing productivity and adding to personal stress. Absenteeism and frequent tardiness also plague such workers. Some family caregivers even quit their employment so that they can devote time to fulfilling caregiving responsibilities.

Family caregivers suffer severe personal financial losses that are often irreparable. They lose out on career opportunity and often forsake promotions. They may lose out on accruing credit towards their own retirement and on accruing “quarters of coverage” for purposes of social security. They have lower “earned income” required to contribute to a retirement plan. They lose employee benefits like worker’s compensation and unemployment benefits. Adding insult to injury, they may even pay 1,000s of dollars of their own money to pay for their family member’s care. Once these kinds of losses occur, the benefits of such lost dollars are gone forever and cannot be made up for. Current governmental and policy perspective to increase the number of unpaid family caregivers is wrong-headed and may only increase future governmental burdens when such family caregivers need help in future years. Policy designed to incent family to provide unpaid care for loved ones is one more example of kicking the can down the road to future generations. Instead of passing on the cost of current caregiving to our children and grandchildren, we need to develop mechanisms to fairly compensate family caregivers now so that their future needs become unmanageable when they require care as a result of not being able to plan financially for themselves. Alternatives include: 1) prioritize adding governmental payments to family caregivers; or 2) provide tax incentives to family caregivers; or 3) count time spent engaging in family caregiving as “quarters of coverage” for social security and as the basis of tax-deductible contributions to qualified retirement plans as they currently exist.

Even under current law, reasonable “compensation” paid to family caregivers for care services rendered to “certified disabled” family members is permissible if certain requirements are met. The payment of such fees appropriately is not treated as an “uncompensated transfer” (i.e., a gift) that can otherwise be penalized under Minnesota’s current rules governing Medical Assistance.

If interested in learning whether the payment of penalty-free fees for care services to your family caregivers may work in your situation, please call or email us to set up an appointment. Readers who have other possible solutions to our family caregiving challenge should email their ideas to the author or contact their lawmakers.