Aging parents, stressed families: A possible solution to the caregiver dilemma

The June 4 article "On double duty: Some face a stark choice between caregiving, career," part of an occasional series on aging and caregivers, identified the overwhelming dilemma related to unpaid family caregiving that faces Minnesota and the United States. The article clearly articulated that unless policymakers make it easier in the coming years to balance work and family caregiving, adult children will either continue to reduce hours and drop out of the labor market, or more frail elders will receive insufficient care.

Rather than only two policy choices, however, there is a third (as illustrated by a quote in an earlier article in the same series): Governmental policy currently relies on — as LaRhae Knatterud, director of aging transformation at the Minnesota Department of Human Services, stated — "as many unpaid caregivers as we can get from family and other volunteers." It is true that existing policies, called our "other Social Security," rely on uneven and unpaid family care, thereby saving the government from making immediate outlays for care provided by unpaid caregivers. The current system, however, is merely "kicking the can" down the road to future generations. Today's unpaid caregivers suffer career and income losses and are unable to accumulate their own retirement benefits or their own savings for long-term care. When they need help in the future, the system will have to pay more in future dollars for the care they need. Obviously, we cannot stay the course.

Tax incentives or enhanced social programs paid with higher taxes seem to be the viable alternatives.

With regard to enhanced social programs, Minnesota already has a program of consumer-directed grants under which family caregivers may receive compensation for caregiving services rendered to a loved one. It provides government grant money, subject to a cap on the extent of the grant, for individuals who otherwise qualify for Medical Assistance. Although a start, these grants do not go far enough to recognize the value that family caregivers provide for their loved ones, as the cap on the grant is limited to $5,000 per year.

Tax incentives, another alternative for compensating family caregivers, should not be limited to offering employers incentives to provide paid family leave as an employee benefit. Lawmakers should also consider incentivizing such intimate personal care by family caregivers on a personal income tax level. Similar to net operating loss credits for businesses, it should be possible to craft a similar type of "family caregiving credit" for qualifying family caregivers who substantiate valid caregiving services for family members. After this credit is accrued during the years when actual caregiving services are performed, the policy could permit the caregiver to amend prior years' income tax returns to obtain refunds equal to some amount based on a market rate for the types of services that they performed. In this way, taxes already paid could fund the "compensation" to the caregiver.

Alternatively, the family caregiver could be allowed to carry over the credit (calculated in the same manner) to offset future years' income taxes on income earned in the future following the end of caregiving duties. This concept merely illustrates that imagination could and should be used to design workable tax solutions that are practical, easy to implement and verifiable.

David W. Wick practices law in Minneapolis, representing seniors and their caregivers. He and his partner, Gretchen Messenger, have also established Who's Watching Mom?, a nonprofit that educates and consults with people planning for, or dealing with, disability and their caregivers.