The National Organization for Women has advocated for many years for policies that would value women’s unpaid caregiving work, either raising children or caring for dependent adults. We now have legislation that would credit caregiving years taken out of the paid workforce – by either sex – and allow for improved benefits to be calculated under Social Security. The caregiver credit would increase women’s economic security in retirement and it could fundamentally alter the way women are treated both in an out of the paid workforce. NOW has set adoption of caregiver credit legislation as a top priority in our larger effort to improve benefits and gain long-term financial solvency for Social Security.
Introduced recently in the House by Rep. Nita Lowey (D-N.Y.) and 33 co-sponsors, the Social Security Caregiver Credit Act of 2014 (H.R. 5024) would create a credit that would be added to earnings to calculate the total deemed wages, which would then to be used to determine benefits. The credit is progressive and is correlated with an income-based sliding scale; so lower-income earning workers would have a proportionately larger credit. Anyone who spends at least 80 hours per month providing care to a dependent relative under the age of 12 or a chronically dependent individual, for up to 60 months, would be eligible.
On average, caregivers spend 4.6 years removed from the labor market which ultimately leads to serious financial burdens later in life. Since it is primarily women (approximately 66 percent) who tend to fall into these categories – this credit not only would allow them to receive higher benefits in retirement, but would help keep many older women above the poverty line.
Since the 1950s, the number of women in the workforce has increased significantly, yet many women live out their retirement years on very modest incomes – many do not have pensions and have not been able to acquire sufficient savings. The average annual Social Security income in 2012 for women aged 65 and older was $11,999 versus $16,295 for men. A significant factor in women’s lower retirement income relates to their unpaid caregiving years. No longer should they be penalized for years spent caring for a dependent relative and foregoing paid full-time or even part-time work. This is important because Social Security calculates retirement benefits based on 35 years of work history.
An illustrative case example is that of Sara Moore, a resident of Chicago, Illinois where she has worked her whole life. Moore balanced multiple jobs during her time in the paid workforce, serving as a waitress, administration assistant at the Humane Society, and as a certified nurse. During this long period, she left the workforce twice, first to care for her two children and again to care for her elderly father. With a total of 30 years in the paid workforce and 10 years put of the paid workforce caring for family, Sara is now receiving a modest Social Security benefit of $953 a month. This is unacceptable. The way our caregivers are taken for granted is inexcusable, and we must work to reaffirm the rights of all individuals to be valued as contributing members of the workforce. Sara’s story highlights the struggles of too many women in this country, and this is something the United States must make a priority.
Sara’s story is taken from a new report by the Older Women’s Economic Security Task Force of the National Council of Women’s Organizations and the Center for Community Change, Expanding Social Security Benefits for Financially Vulnerable Populations. According to the report, which was prepared with the assistance of the Institute for Women’s Policy Research (IWPR co-chairs the Older Women’s Economic Security Task Force with NOW), the discrepancies in retirement income between men and women only highlight the need for caregiver credits which will help close the retirement income gap and modernize the current Social Security system. The caregiver credit would have another important outcome in reducing poverty among older women.
What’s also important to note are the wide array of social benefits this credit could help generate. Already countries such as France, Germany, Canada, Japan, and Sweden have a caregiver-type credit and the benefits cited in those countries include the prevention and alleviation of elder poverty, raising women’s employment levels, encouraging higher birth rates, and improving gender equality.
Looking holistically at the caregiver credit a very important consequence would be the valuation and promotion of caregiving as legitimate and beneficial work for society. Without this credit, the vital work of caregivers is left unrecognized and unappreciated. In order to truly allow men and women to be seen as equals within our capitalist society, we must not devalue the precious work of caregivers. The long- term benefits of this bill extend far beyond mitigating financial disparities and have the potential to mediate the biased gender norms which permeate our society.
In recognizing the undeniable benefits of this proposed policy to women and low-income families, the National Organization for Women, the Center for Community Change and many other organizations are advocating for the adoption of such a credit. Costing only an additional $1.21 per week for an average worker, the caregiver credit would provide a tangible value to women while simultaneously integrating the work of millions of caregivers into our formal labor market. Already women earn significantly less than men in Social Security benefits, and the inclusion of this credit will help mitigate this inequality. Rather than perpetuating a cycle of pay disparity and devaluing the work of caregivers, the Social Security Caregiver Credit Act would help establish credibility for caregivers while also strengthening the funds available to the Social Security program as a whole.
 Center for Community Change, Expanding Social Security Benefits for Financially Vulnerable Populations, (October 2013), 9
 National Alliance for Caregiving and AARP. 2009 Caregiving in the U.S. Bethesda, MD
 Expanding Social Security Benefits for Financially Vulnerable Populations, 3
 Ibid, 10
 Ibid, 11
 Fultz, Elaine. 2011. Pension Crediting for Caregivers: Policies in Finland, France, Germany, Sweden, the United Kingdom, Canada, and Japan. Washington, DC: Institute for Women’s Policy Research.