As
of 2009, it was reported that only 8% of grandparents helping with childcare
received pay, according to the Wall
Street Journal article, “When Granny is Your Nanny.” For some working
grandparents the decision to quit paid employment to help out their own family,
may not be easy. Financial issues for working grandparents to consider include:
“income tax status, health insurance, … benefits associated with employment,”
according to About.com’s
article on Grandparents as Child Care Providers by Susan Adcox. Additional
issues raised in the same article are, missing the social aspects and
challenges of the workplace and whether a job will still exist if the
grandparent-retiree wishes to return to the workplace.
Accepting payment from children for the care of
grandchildren poses additional concerns for grandparent caregivers. According
to Ms.
Adcox, grandparents must consider their children’s financial habits,
consider if accepting payment will make them feel guilty, whether extra
expenses would be covered, and whether or not overtime would be paid. Ms. Adcox
even recommends putting together a written agreement or contract “before
embarking upon this commitment.” On the legal/accounting side, a financial
forum discussing
payment to grandparents, on FatWallet.com, recommends paying a salary that
grandparents can report on a schedule C to pay self employment (FICA) taxes on.
This allows the parent to claim a “child care deduction on your tax return for
the amount” paid to the grandparent.
About.com
did a survey of grandparents to see who would accept payment for caring for
their grandchildren. Although only 113 people responded, the results were
interesting. A total of 46% were willing to accept payment, while 51% were not.
Here’s how the numbers broke down:
·
16% “Yes, I would
expect to be paid like any other provider.”
·
30% “Yes, but I would
charge a reduced amount.”
·
14% “No, I would feel
guilty taking money from my children.
·
20% “No, I feel the
privilege of being with my grandchildren would make it worthwhile.
·
17% “No, but I would
accept gifts, outing or vacations as signs of appreciation.
From our personal experience, our grandparents never
accepted payment for our care. Most of our friend’s grandparents did not get
paid either. Most grandparents
lived in the same household, and thus rent and utilities were often included
for them by the parents. For other friends we knew who had grandparents that
lived nearby, they often prepared and shared meals with the family, which helped
to reduce their grocery needs.
In March of 2013, the website Grandparents.com asked
its members: “Should
grandparents be paid for babysitting?” They summed up many of the comments,
saying, “There's a huge difference, many of you pointed out, between doing
occasional date-night sitting and providing what amounts to no-cost daily
daycare. And while many of you agreed that caring for a child on a regular
basis warranted a paycheck, others said that they could never accept money from
their kids.”
Some of the most interesting responses of the
Grandparents.com survey were:
·
“They [the parents]
show their thanks in many ways.”
·
“The pleasure I get out
of watching them is worth more than the money."
·
"It seems strange
to be paid for a normal family responsibility. It's a privilege.”
·
“I told them I would
get paid, but half of my check would go into savings for the baby.”
·
"Our son and his
wife wanted me to quit my job and care for their son and insisted on paying my
husband and me. As retired people, we needed the income.”
While many grandparents seem to feel it’s their duty
to help out their children by being part of raising their grandchildren, the
financial constraints of retirees cannot be disregarded. It seems that most
families are able to work out childcare financial arrangements, whether actual
money is exchanged or gifts and favors are exchanged instead. As children
raised primarily by our grandparents, we believe in grandparents being closely
involved in their grandchildren’s lives. The time we spent together with our own
grandparents created a special bond that will continue to live on in our
hearts.
