Very few grandparent caregiver households claim Social Security child benefits, possibly due to the adoption requirement. Image: SasaStock/Shutterstock.com
By: FEDweek StaffGrandparents who take on the responsibilities of providing for the basic needs of their grandchildren “are often under great financial pressure” but typically they are not eligible for any type of financial support, says the Center for Retirement Research.
In those situations, commonly arising when the parents are unable to provide such care, the grandparents generally are outside the foster care system and do not legally adopt the children. They therefore “often do not receive the subsidies provided for foster parents, housing assistance, or Social Security child benefits,” it says.
That’s especially a concern, it said, because grandparents in that situation on average have lower net worth and lower incomes compared to those not providing such care. On average, a caregiver begins providing such care at age 60 and provides it for four years, it says.
“The demands of raising grandchildren can drain savings, while time-consuming caregiving responsibilities create barriers to working longer and may force grandparents to retire early. Unsurprisingly, given these circumstances, grandparent caregivers are particularly vulnerable financially,” it says.
It added that above half already are receiving Social Security benefits, in many cases because of disability. SSA can award benefits to children as a dependent of a grandparent beneficiary only if they are not already receiving survivor or child benefits through a parent; the grandparent formally adopts them; and the grandparent provides at least half of their support.
“However, very few grandparent caregiver households claim Social Security child benefits, possibly due to the adoption requirement,” it says.
The tax code, in contrast, allows grandparents to claim children dependents if the children live in the household for at least half the year and the grandparents provide at least half their sup¬port, with legal custody not required.
It said that for caregivers who are receiving Social Security benefits, loosening that program’s criteria to meet the IRS criteria would on average provide some $8,000 in child benefits on top of the average of $19,000 the caregivers are receiving as their own benefits. That would “notably improve” their financial situation.
“An important caveat is that a meaningful share of grandparent caregivers would still not be helped by such a policy change because they have not yet retired and claimed their own Social Security benefits,” it added.
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