The National Conversation on Caregiving

The New Administration’s Plan for Tackling the Caregiving Crisis

By Longevity Project Staff

The Biden Administration is the first to come into office with an explicit caregiving plan. Described as “Mobilizing American Talent and Heart to Create a 21st Century Caregiving and Education Workforce,” it envisions spending $755 billion over 10 years to improve care for both children and the elderly and to create better jobs for caregivers.

The proposal covers programs for paid and unpaid caregivers alike. For volunteer caregivers, the Biden plan focuses on three core benefits: (1) the provision of a tax credit of up to $5,000, (2) Social Security credits for people who must leave the workforce in order to care for their loved ones, and (3) an expansion of Medicaid that would require the program to allocate more resources to support home-based services.

Here are the details:

• Tax Credits for Caregivers

  • The Biden plan envisions an annual tax credit of up to $5,000 for volunteer caregivers, modeled on the bipartisan “Credit for Caring Act,” introduced in Congress in 2019. While the Biden Administration has not yet provided specifics, the Credit for Caring Act made allowances for a tax credit to compensate caregivers’ out-of-pocket expenses under the following conditions:

    • A health care practitioner would have to certify that the care recipient meets certain physical and cognitive needs.

    • The caregiver would have to document expenses, and the credit would be 30% of eligible expenses above $2,000.

  • Caregivers would not have to live with the individual they are assisting and would not have to be caring for a legal dependent in order to be eligible for the tax credit.

• Social Security Credits for Caregivers

  • The Biden plan would also give some caregivers Social Security credits for the time they spend outside of the work force caring for loved ones. This proposal is intended to reduce the cost of leaving the work force for caregiving and to strengthen the retirement position for family caregivers. The social security credit would be available to anyone who spends at least 80 hours a month caring for a dependent under the age of 12 or any chronically dependent individual for up to 60 months. This change would be most beneficial to lower-income workers, according to an Urban Institute analysis, as it would credit them with earnings equal to half the average national monthly wage, in addition to their other earnings, but would gradually phase down for families of higher income levels.

• Expanding Access to Home Care Services

  • Medicaid is the largest public payer for long-term care services, but it has historically funneled a majority of its funding to nursing homes rather than to home- and community-based services. It is estimated that around 800,000 people linger on state waiting lists for home care, and the Biden Administration has vowed to reduce the wait list by enhancing federal contributions for more home-based and community alternatives. The mechanism for this is a new Innovation Fund to be administered by the Center for Medicare and Medicaid Innovation, which was established by the Affordable Care Act to support innovations that improve health care while managing costs. The scale and timing for the Innovation Fund is not yet known but could be included in the President’s first budget proposal.

In addition, the $1.9 trillion coronavirus emergency relief package, which has been passed by the House and is now heading for a vote in the Senate, includes several measures designed to benefit caregivers, including extending stimulus payments to cover previously overlooked adult dependents and paid family and medical leave (over 14 weeks of it, in order to help parents with additional caregiving responsibilities when a child or loved one’s school or care center is closed). Some of these benefits would help family caregivers of all kinds, while others are designed to specifically aid those caring for people with Covid-19, those who are quarantining due to exposure to the virus, and those who need to take time off to get the vaccine.