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Washington D.C. ─ Congresswoman Sheila Cherfilus-McCormick (FL-20) joined a bipartisan group of colleagues, Congressman Josh Gottheimer (NJ-5), Congressman Mike Lawler (NY-17), and Congressman Juan Ciscomani (AZ-6), in introducing new legislation to provide financial relief to caregivers. The Caregiver Financial Relief Act would provide an extra layer of financial support to caregivers by waiving the 10% early withdrawal penalty from retirement accounts when used for family caregiving expenses. 

Approximately 43.5 million Americans are providing unpaid caregiving services to a loved one in the U.S. today. Caregiving expenses, on average, can cost a family $7,000 annually, and a survey of caregivers found that 47% are “financially burden[ed]” by caregiving. 

“It is unconscionable that Americans must choose between working to afford basic necessities or caring for a loved one,” said Congresswoman Cherfilus-McCormick. “This National Family Caregivers Month, we must resolve to do more to aid our hidden workforce of caregivers who contribute more than $1 trillion to our economy every year. I am proud to stand with my colleagues in introducing this critical, bipartisan piece of legislation that will materially benefit our constituents.” 

“Family caregivers are there to help with everything from preparing meals, to putting on clothes, to coordinating medical care while advocating on behalf of those in need. They’re on it – and, while it’s the right thing to do, aside from the emotional toll, it comes at a huge cost.” said Congressman Josh Gottheimer. “This new bipartisan legislation, which I’m introducing will ensure that family caregivers are no longer financially punished for the vital care they provide.” 

“Families shouldn’t be penalized for dipping into retirement savings to care for family members in need,” said Congressman Mike Lawler. “Our new legislation will make sure they aren’t. This bill is common sense and will help countless families who need it the most.” 

Background: 

The Caregiver Financial Relief Act waives early withdrawal penalties from retirement accounts used for family caregiving expenses. Currently, early withdrawals from retirement accounts (e.g. 401(K) or Roth IRA) are subject to both federal income tax and a 10 percent early withdrawal penalty. This penalty further strains family caregivers who often have no choice but to dip into their savings to make ends meet. Furthermore, the bill would align caregiving expenses with other existing 10 percent early withdrawal penalty exemptions for education, first-time home purchases, and birth/adoption costs.  

Read the full text of the bill here.