As policy makers wrestle with Social Security’s flagging finances, some are also looking for ways to make the program more generous to some family caregivers.
Democratic presidential nominee Hillary Clinton has proposed expanding Social Security for those “who took significant time out of the paid workforce to take care of their children, aging parents, or ailing family members,” according to her website. Caregivers’ time away from work reduces their future Social Security benefits, which are based on workers’ top 35 earning years.
Of course, any expansion of benefits would have to be funded. Clinton has proposed increasing taxes on the wealthiest Americans. Yet Social Security will need a cash infusion to maintain even current benefit levels starting in 2034, when the trust fund is expected to run dry.
“Whoever wins this election will face some big challenges,” says Steven Sass, an economist at the Center for Retirement Research at Boston College and the author of a recent study on Social Security family benefits.
But these challenges also offer an opportunity, Sass says. Changes to Social Security will require legislation. While Congress outlines steps to shore up the program’s finances, politicians could also address aspects of benefit design that penalize some caregivers.
When the Social Security Act was enacted in 1935, benefits were designed to serve a married couple in which the husband worked and the wife was a homemaker. Spousal and survivor benefits provide for homemakers by allowing them to claim on their working spouses’ work record. (Social Security benefits have been gender-neutral since the mid-1970s, and benefits today protect stay-at-home fathers the same as stay-at-home mothers.)
The dramatic increase in the number of women in the workforce has led Social Security to pay out less in family benefits in recent decades. More women are collecting benefits based on their own earnings.
“The structure was designed for a bygone era,” says Eugene Steuerle, an economist at the Urban Institute, author of Dead Men Ruling and a former deputy assistant secretary of the Treasury.
Lately there has been more talk of whether Social Security should be fortified to increase the safety net for other groups of Americans who take care of children or elders.
For instance, single mothers don’t have access to the spousal and survivor benefits that can benefit wives, even though they pay the same payroll taxes that help fund the program.
Women ages 65 to 74 who spent at least 10 years as a single mother were 55% more likely to be poor than continuously married mothers of similar education and ethnicity, according to a study quoted in Sass’s analysis. Single women’s caregiving responsibilities may eat into their earnings potential, lowering their future Social Security benefit.
One proposal outlined in Sass’s paper, which is rooted both in academic research and in analyses by the Social Security Administration, would create caregiving credits toward family benefits based on child-rearing status rather than marital status. Such a change would help unmarried mothers, including divorced mothers who were married for less than 10 years. (Those who were married for more than 10 years can file for benefits on their ex-spouse’s record, provided other conditions are met).
Clinton’s proposal would allow caregivers who exit the paid workforce to accrue Social Security credits while providing significant care for a loved one of any age.
While Clinton has shown herself open to certain changes in benefit design, it’s less clear what Donald Trump might do if elected president. He has said in the past that Social Security must honor the deal the program has made with beneficiaries who have paid into the system. Yet the recently adopted Republican Party platform rejects tax increases.
Whoever wins in November, it’s clear that something has got to give when it comes to Social Security, Sass says: “We’ll have to pay more or get less, and that’s not what the public likes.”