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Help for Grandparents Raising Grandchildren


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 [email protected] Thank you for watching. Until next time, I’m
Thomas Fox for Cambridge Credit Counseling.

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2 thoughts on “Help for Grandparents Raising Grandchildren

  1. I feel less alone after viewing this video. I currently live in NYC and would like to relocate to another state to raise my granddaughter. I have considered Delaware. A friend of mine told me it was tax friendly. I need more infor about schools, especially for a special needs child who is hyperactive and has sensory issues.
    Any suggestions on resources, cost of living costs, etc.? I receive a small pension and SS which is not much.

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