A recent study found that a prospective adjustment in Social Security laws might provide much-needed financial relief in the form of an additional $8,100 for the 2 million grandparents in the United States raising their grandchildren full-time.
The study, published by the Center for Retirement Research (CRR) at Boston College, suggests that adjusting the rules of the Social Security Administration (SSA) to align with those of the Internal Revenue Service (IRS) could have a significant positive impact on caregiving grandparents.
Many grandparents find themselves in the role of full-time caregivers due to unforeseen circumstances such as the death of a parent.
Limitations on Grandparents’ Social Security Child Benefits
However, under the current SSA rules, Social Security child benefits are only available to legal dependents of Social Security beneficiaries.
This means that most grandparents who have yet to adopt their grandchildren legally but still bear the primary caregiving responsibilities do not qualify for these benefits.
In contrast, the IRS allows grandparents to claim a child as a dependent for tax purposes without requiring legal custody.
The CRR’s study suggests that if the SSA adopted similar guidelines, it would substantially support a significant portion of caregiving grandparents.
The study’s authors, Siyan Liu, and Laura Quinby, highlight that “close to half of the grandparent caregiver households would qualify for child benefits if the eligibility criteria were aligned with the IRS rules.”
This change could have far-reaching implications. The CRR reports that the average eligible household would receive an additional $8,100 annually, which translates to $675 monthly.
This extra income can be a lifeline for many grandparents, as caregiving often depletes their savings for bills and retirement.
The responsibilities of a grandparent caring for a child full-time can also limit their ability to work longer, potentially pushing them into early retirement without sufficient financial resources.
The CRR suggests that modifying the Social Security child benefits could be a viable solution for easing the financial burden on grandparents.
The logical step would be to replace the SSA’s adoption requirement with the existing IRS guidelines.
However, it’s important to note that while this change would benefit many, many caregiving grandparents who have yet to claim their Social Security benefits would remain without added support.
Grandparents who find themselves raising their grandchildren, especially those in historically disadvantaged communities, face tremendous challenges, both emotionally and financially.
While the proposed change in SSA guidelines may not be a panacea, it would represent a crucial step in recognizing and supporting the sacrifices that these grandparents make daily.
It could significantly improve the financial well-being of a vulnerable and often overlooked demographic.