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Floor Speech
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Ms. COLLINS. Madam President, I rise today to introduce two bills: the Improving Retirement Security for Family Caregiver Act and the Catching Up Family Caregivers Act. These bills, which I am introducing today with my colleague from Virginia, Senator Warner, would enable family caregivers to better save for retirement.
Family caregivers play an essential role in American society: caring for this Nation's children and elderly. While providing many vital services for their loved ones, these caregivers often suffer economically. According to a new study from the Edward Jones Grassroots Taskforce, 64 percent of women say their caregiving duties have negatively impacted their ability to save toward their long-term financial goals. In fact, an average 26-year-old female making $60,000 a year leaving the workforce for 5 years to raise her children will lose close to $1 million over her lifetime due to lost retirement assets and wage growth. Those taking care of an aging parent often face similar experiences. While it is difficult to put a dollar amount to the value of the devotion, time, and services that these caregivers provide, the Alzheimer's Association has estimated that in 2023, family caregivers provided $350 billion in uncompensated long-term care.
For this reason, the American retirement system needs to change to benefit family caregivers. Our legislation would enable family caregivers to contribute to their retirement funds without significant income. Currently, contributions are capped to Roth IRAs at $7,000 or yearly income, whichever is less; therefore a family caregiver earning less than $7,000 annually is severely limited in their ability to contribute to a retirement account. The Improving Retirement Security for Family Caregiver Act, would eliminate the income cap for family caregivers, enabling them to contribute to a Roth IRA through other savings accounts up to$7,000 annually.
In addition, our current retirement system allows those over the age of 50 to contribute more money to their retirement than the statutory limit, the idea being that those in their fifties have more discretionary income than they did when they were younger to put towards retirement. Using the same logic, the Catching Up Family Caregivers Act would give family caregivers extra years of maximum catch-up contributions for every year they were sidelined from the workforce to be a family caregiver. These complementary bills would allow family caregivers to invest more in their retirement funds now and later.
These complementary bills would allow family caregivers to invest more in their retirement funds now and later. They have earned to support of important stakeholder organizations that represent family caregivers, including the Alzheimer's Association and the Alzheimer's Impact Movement. In letters that support these bills, they write, ``Nearly half of all caregivers who provide help to older adults do so for someone living with Alzheimer's or another dementia. Alzheimer's takes a devastating toll on caregivers.'' I am grateful for the support of these groups who know how important these retirement reforms will be to the financial security of caregivers who sacrifice for their loved ones. I urge my colleagues to support our legislation.
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Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improving Retirement Security for Family Caregivers Act of 2024''. SEC. 2. ROTH IRA CONTRIBUTIONS FOR CERTAIN FAMILY CAREGIVERS.
(a) In General.--Subsection (c) of section 408A of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
``(7) Special rule for roth ira contributions of qualified family caregivers.--
``(A) In general.--In the case of an individual who is a qualified family caregiver as of the close of the taxable year, in applying section 219 for purposes of paragraph (2), the limitation of paragraph (1) of section 219(b) shall be equal to the dollar amount in effect under section 219(b)(1)(A) for the taxable year.
``(B) Qualified family caregiver.--For purposes of this paragraph--
``(i) In general.--The term `qualified family caregiver' means an individual who, during the taxable year--
``(I) has completed 500 or more hours as a family caregiver, and
``(II) has completed fewer than 500 hours of paid employment (including self-employment).
``(ii) Family caregiver.--The term `family caregiver' means an unpaid family member, a foster parent, or another unpaid adult, who is unemployed or severely underemployed (as determined by the Secretary) and who provides in-home care, monitoring, management, supervision, or treatment of--
``(I) a child, or
``(II) an adult with a special need (as defined in section 2901 of the Public Health Service Act), including an elderly adult who requires care or supervision due to an age-related condition.
``(iii) Hours.--An individual shall be treated as serving as a family caregiver during the hours in which the individual is engaged in caregiving tasks including assistance with bathing or grooming, dressing, laundry, food shopping or preparation, housekeeping, managing medications, transportation, and mobility assistance.
``(C) Coordination with spousal ira.--In the case of an individual to whom section 219(c)(1) applies for the taxable year, subparagraph (A) shall be applied notwithstanding such section.''.
(b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2024. S. 5149
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Catching Up Family Caregivers Act of 2024''. SEC. 2. ADDITIONAL CATCH-UP CONTRIBUTIONS FOR CERTAIN FAMILY CAREGIVERS.
(a) In General.--Subparagraph (A) of section 414(v)(5) of the Internal Revenue Code of 1986 is amended--
(1) by striking ``who would'' and inserting ``who--
``(i) would'',
(2) by adding ``or'' at the end, and
(3) by adding at the end the following new clause:
``(ii) is a qualified family caregiver as of the end of the taxable year,''.
(b) Qualified Family Caregiver.--Paragraph (6) of section 414(v) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
``(D) Qualified family caregiver.--
``(i) In general.--The term `qualified family caregiver' means an individual who has completed 500 or more hours as a family caregiver during any 1 taxable year.
``(ii) Limitation.--An individual shall be treated as a qualified family caregiver for not more than a total of, consecutively or nonconsecutively, the greater of--
``(I) 1 taxable year for each taxable year during which such individual completed 500 or more hours as a family caregiver, or
``(II) 5 taxable years.
``(iii) Hours.--For purposes of this subparagraph, the hours during which an individual was a family caregiver shall be determined by [to be supplied].
``(iv) Family caregiver.--The term `family caregiver' means an unpaid family member, a foster parent, or another unpaid adult, who is unemployed or severely underemployed (as determined by the Secretary) and who provides in-home care, monitoring, management, supervision, or treatment of--
``(I) a child, or
``(II) an adult with a special need (as defined in section 2901 of the Public Health Service Act), including an elderly adult who requires care or supervision due to an age-related condition.''.
(c) IRA Catch-up Contributions.--Clause (i) of section 219(b)(5) of the Internal Revenue Code of 1986 is amended by striking ``who has attained the age of 50 before the close of the taxable year, the deductible amount'' and inserting ``who--
``(I) has attained the age of 50 before the close of the taxable year, or
``(II) is a qualified family caregiver (as defined in section 414(v)(6)(D)) as of the close of the taxable year, the deductible amount''.
(d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2024. ______
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