Spectrum of Financial Supports for Family Caregivers

Family caregivers are the backbone of the long-term services and supports (LTSS) system in the United States, providing care that is valued at $600 billion. This care includes social support, help with activities of daily living, and performing complex medical and nursing tasks that parallel those of paid LTSS providers. But family caregivers endure significant financial challenges, and an overwhelming majority of them cover the costs of care out of their own pockets, lose income and savings, and tap into their own savings.

This Spotlight report details the financial impact of caregiving on 48 million Americans. It includes data and findings from a range of sources, including survey research with caregivers themselves. It also features several first-person descriptions by individual family caregivers who have shared their stories with AARP that help illustrate the issues they face.  

Importantly, this report also proposes an agenda of promising policies that states and the federal government can enact to alleviate caregivers’ economic challenges. It describes some promising state-level solutions and notes that while states have taken the lead in enacting innovative taxation, employment, and LTSS policies and programs to meet caregivers’ financial needs, more needs to be done at the federal level.

Key Takeaways

Family caregivers bear many financial challenges because they provide essential care to millions of adults with complex health conditions and disabilities:

• Nearly 80 percent of family caregivers assume out-of-pocket care costs that average $7,200 a year. These costs lead to financial repercussions for caregivers’ financial security.
• The high cost of direct care workers, which ranged from $5,700 to $6,300 monthly in 2024, is often borne by caregivers.
• Caregivers who are younger, Hispanic or Latino, or African American or Black or have a lower household income feel the financial pressures more acutely.
• Working caregivers struggle to balance work and care, often leading to significant career disruptions and lost income and savings. Younger, African American or Black, Hispanic or Latino, and hourly wage employees face greater work impacts than others.

Promising Solutions

No single policy can meet the financial needs of all caregivers. Promising solutions to help alleviate the financial strain of caregivers include the following:

• Tax credits and grants to offset care expenses
• Health expense account provisions allowing account holders to pay for medical costs of parents or parents-in-law
• Opportunities for family caregivers to get paid for care via self-directed Medicaid programs
• Paid family and sick leave policies
• Employment antidiscrimination laws that include caregiving as a protected classification

Conclusion

Caregivers—like those featured throughout this report —need an agenda of solutions to address the substantial financial pressures they face. They shoulder substantial out-of-pocket costs, and working caregivers must make difficult choices between maintaining their employment and caring for family members and friends. A wide spectrum of state and federal solutions is available to begin better supporting this growing group of Americans.