Help for Grandparents Raising Grandchildren





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Published on Apr 7, 2011

http://www.cambridge-credit.org/ -- Watch this week's webisode from Cambridge Credit Counseling Corp. to learn how to access resources and funding for Grandfamilies. Host: Community Outreach Director, Thomas Fox.

Hello, and welcome to Your Money 2.0. I’m Thomas Fox, Community Outreach Director at Cambridge Credit Counseling. As I’ve mentioned in previous episodes, I was raised by my grandparents. It wasn’t until I was older that I truly came to appreciate the sacrifices they made. Let’s face it, raising a child in your golden years may not seem like the ideal retirement, but family comes first – a sentiment that hundreds of thousands of grandparents share.

Nearly 3 million children in the United States are being raised by their grandparents, a figure that has risen substantially throughout the recession. Matters of the heart often trump financial foresight, and many grandparents’ first instinct is to open their homes to children who desperately need their care and guidance. However, the financial challenges grandparents face when they agree to become a caregiver for a young child can be substantial. There are education costs, clothing expenses, increased grocery and utility bills, and a host of new financial challenges that can compromise the budget of individuals living on a fixed income. According to a Pew Research Center report in 2008, almost 50% of grandparent caregivers have incomes that fall within 1 to 3 times the poverty level, and nearly 18% are living below the poverty level. At the time of the report, the poverty threshold for a family of two adults and two children was $21,834. Although the incomes of a majority of grandparents surpass the poverty level, it’s still very difficult to raise a child and manage your retirement.

Thankfully, there are resources to help grandparent caregivers. Most programs are contingent upon the caregiver establishing custody of their grandchild. Therefore, one of the first actions you should take is to consult an attorney to discuss legalizing your role as caregiver. In fact, grandparents may qualify for grants, child care assistance, healthcare, and tax breaks, depending on the form of your custody arrangement, income, assets, and the state where you reside. For instance, you may qualify for assistance from the federal Temporary Assistance for Needy Families program. Support can be provided by way of a monthly stipend, day care expense reimbursement, or a clothing allowance. Even if your household income is too high to qualify as a family, grandparents can apply for a child-only TANF grant based on the child's income. Recipients can also qualify for additional benefits, so be sure to ask about eligibility. If your grandchild has been placed with you as a result of a court order, you may qualify for assistance through the Kinship Foster Care program. This state-specific program pays subsidies to relatives who care for a child who’s been removed from the custody of their parents.

One of the biggest expenses in any household is healthcare. Children living with grandparents or other relatives may be eligible for Medicaid or the Children’s Health Insurance program. Medicaid is a state-administered program providing healthcare for low-income individuals and families without private health insurance. If your income exceeds the threshold for Medicaid, you can apply for the Children's Health Insurance Program, or CHIP. CHIP is a state-administered program offering low-cost health insurance coverage for children. CHIP covers checkups, inoculations, hospital care, and more.

Grandparents who meet income guidelines may also be eligible for the Child Tax Credit, a credit of up to $1,000 for children in your care who are under the age of 17. If you are a low-income earner or have a large family, you may qualify for an additional child tax break. The Dependant Exemption allows grandparents who meet income standards a tax deduction of up to $3,650 for each qualifying child under the age of 19. As always, discuss these and other tax related issues with a tax professional.

As you may have guessed by now, there are many more resources available than we can mention is this episode, so I encourage you to visit Goodpayer.com and access our Resources page. In our Grandfamilies section you’ll find links to websites and programs that will help ease your transition to a grandparent caregiver. As always, we welcome your feedback and ask for your thoughts and suggestions by e-mailing us at yourmoney2@cambridgecredit.org. Thank you for watching. Until next time, I’m Thomas Fox for Cambridge Credit Counseling.


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