For the 2 million grandparents in the United States tasked with the full-time job of raising their grandchildren, a potential change in Social Security regulations could offer substantial financial relief in an additional sum of $8,100, according to a study published Tuesday.
Adjusting the Social Security Administration's (SSA) rules to align with those of the Internal Revenue Service (IRS) could result in significant benefits for those caregiving grandparents, the Center for Retirement Research (CRR) at Boston College said in its study.
The Heart of the Matter
Many grandparents step in as full-time caregivers due to unforeseen circumstances such as a death or otherwise. Under the current SSA rules, however, Social Security child benefits are only available to legal dependents of Social Security beneficiaries.
That means most grandparents, who haven't legally adopted their grandchildren, but still shoulder the primary caregiving responsibilities, don't qualify.
In contrast, the IRS allows grandparents to claim a child as a dependent for tax purposes without requiring legal custody. The CRR suggests that if the SSA adopted similar guidelines, it would greatly assist that sector of grandparents.
"Since few beneficiary households have grandchildren who are already receiving Social Security benefits through a parent, close to half of grandparent caregiver households would qualify for child benefits if the eligibility criteria were aligned with the IRS rules," the study's authors, Siyan Liu and Laura Quinby said in the report.
The Financial Implications
The implications are steep if such an alignment were to occur. The CRR reports that the average eligible household would receive an additional $8,100 annually on top of their existing benefits. That additional income—amounting to $675 per month—can prove crucial for grandparents, as caregiving often leads to drained savings intended for bills and retirement.
The responsibilities of a grandparent taking care of a child full-time can also hinder their ability to work longer, possibly pushing them towards premature retirement without adequate financial resources.
Moving Forward
The CRR hypothesizes that modifying the Social Security child benefits could be a viable solution for alleviating the financial stress on grandparents. A logical step, the CRR said, would be replacing the SSA's adoption prerequisite with the existing IRS requirements.
It's important to note, however, that while the change would indeed assist many, a significant proportion of caregiving grandparents who haven't yet claimed their own Social Security benefits would still remain without the added support.
Grandparents raising grandchildren, especially those in historically disadvantaged communities, face immense challenges both emotionally and financially. While the proposed change in SSA guidelines isn't a panacea, it would be a crucial step in acknowledging and supporting the sacrifices those grandparents make every day.
Newsweek reached out to the SSA for comment via email.
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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