[Congressional Record Volume 151, Number 46 (Monday, April 18, 2005)]
[Senate]
[Pages S3831-S3832]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CRAIG (for himself and Mr. Burns):
  S. 835. A bill to amend the Internal Revenue Code of 1986 to allow a 
nonrefundable tax credit for elder care expenses; to the Committee on 
Finance.
  Mr. CRAIG. Mr. President, today I am introducing the Senior Elder 
Care Relief and Empowerment Act--the SECURE Act.
  The SECURE Act would provide eligible taxpayers with a nonrefundable 
tax credit equal to 50 percent of qualified expenses incurred on behalf 
of senior citizens above a $1,000 spending floor.
  The Senate Special Committee on Aging, which I chaired in the 108th 
Congress and of which I remain a member, held several hearings over the 
last couple years on different facets of the growing long-term care 
crisis in this country. A major concern of mine is that the Federal 
long-term care policy mix may not have the right incentives--especially 
when it comes to the tough choices faced by families who want to care 
for their frail and aging relatives.
  More and more families are facing the stress and financial 
difficulties that come with caring for their aging parents.
  It is critical to note that families, not government, provide 80 
percent of long-term care for older persons in the United States. This 
is an enormous strength of our long-term care system. The U.S. 
Administration on Aging reports that about 22 million people serve as 
informal caregivers for seniors with at least one limitation on their 
activities of daily living.
  These caregivers often face extreme stress and financial burden--
especially those we call the sandwich generation. The sandwich 
generation refers to those sandwiched between caring for their aging 
parents and caring for their own children.
  It is difficult for families to balance caring for children and 
saving or paying for college, while at the same time struggling with 
financing care for frail and aging parents.
  Many caregivers forgo job promotions, reduce their hours on the job, 
cut back to part-time, or take extended leaves of absence to stay at 
home and care for their aging family members. Direct expenses include 
the cost of prescription drugs, durable medical equipment, home 
modifications, and physical therapy.
  Caregivers also endure emotional and personal health strains.
  The average age of a caregiver is 57, with one-third over age 65 
themselves. Caregivers suffer from higher rates of depression or 
anxiety. These conditions often lead to higher risk of heart disease, 
cancer, diabetes, or other chronic conditions.
  For many families, the nursing home is the only solution for 
providing long-term care, and that can be a good choice. For other 
families, keeping aging and vulnerable relatives in their own home or 
in the caregiver's home makes sense.
  Family caregiving for aging and vulnerable relatives requires a 
flexible national response to ensure seniors and their families have 
the most appropriate high quality choices.
  That is why I am introducing the SECURE Act. This legislation would 
help reduce the financial strain and related emotional and medical 
stress faced by family caregivers, as they care for their frail and 
aging parents, by providing much-needed tax relief for qualified 
expenses.
  The SECURE Act would increase the eldercare choices available to 
families and has the potential to reduce the number of seniors forced 
to spend down their nest-egg in order to qualify for Medicaid services.
  Qualified expenses include costs that are not reimbursable--those not 
covered by Medicare or other insurance--for physical assistance with 
essential daily activities to prevent injury; long-term care expenses, 
including normal household services; architectural expenses necessary 
to modify the senior's residence; respite care; adult daycare; assisted 
living services that are non-housing related expenses; independent 
living; home care; and home health care.
  Seniors with long-term care needs also would be able to use the tax 
credit on their own behalf.

[[Page S3832]]

  The SECURE Act should not preclude seniors or those near retirement 
from purchasing long-term care insurance. The Act would provide tax 
relief for high-risk seniors who cannot qualify for long-term care 
insurance policies.
  I invite my colleagues to cosponsor this compassionate legislation.
  I ask unanimous consent that the text of the bill and a brief 
description be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 835

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Senior Elder Care Relief and 
     Empowerment (SECURE) Act''.

     SEC. 2. CREDIT FOR ELDER CARE.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 25B the following new section:

     ``SEC. 25C. ELDER CARE EXPENSES.

       ``(a) Allowance of Credit.--In the case of an individual, 
     there shall be allowed as a credit against the tax imposed by 
     this chapter 50 percent of so much of the qualified elder 
     care expenses paid or incurred by the taxpayer with respect 
     to each qualified senior citizen as exceeds $1,000.
       ``(b) Qualified Senior Citizen.--For purposes of this 
     section, the term `qualified senior citizen' means an 
     individual--
       ``(1) who has attained normal retirement age (as determined 
     under section 216 of the Social Security Act) before the 
     close of the taxable year,
       ``(2) who is a chronically ill individual (within the 
     meaning of section 7702B(c)(2)(B)), and
       ``(3) who is--
       ``(A) the taxpayer,
       ``(B) a family member (within the meaning of section 
     529(e)(2)) of the taxpayer, or
       ``(C) a dependent (within the meaning of section 152) of 
     the taxpayer.
       ``(c) Qualified Elder Care Expenses.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified elder care expenses' 
     means expenses paid or incurred by the taxpayer with respect 
     to the qualified senior citizen for--
       ``(A) qualified long-term care services (as defined in 
     section 7702B(c)),
       ``(B) respite care, or
       ``(C) adult day care.
       ``(2) Exceptions.--The term `qualified elder care expenses' 
     does not include--
       ``(A) any expense to the extent such expense is compensated 
     for by insurance or otherwise, and
       ``(B) any expense paid to a nursing facility (as defined in 
     section 1919 of the Social Security Act).
       ``(d) Other Definitions and Special Rules.--
       ``(1) Adult day care.--The term `adult day care' means care 
     provided for a qualified senior citizen through a structured, 
     community-based group program which provides health, social, 
     and other related support services on a less than 16-hour per 
     day basis.
       ``(2) Respite care.--The term `respite care' means planned 
     or emergency care provided to a qualified senior citizen in 
     order to provide temporary relief to a caregiver of such 
     senior citizen.
       ``(3) Married individuals.--Rules similar to the rules of 
     paragraphs (2), (3), and (4) of section 21(e) shall apply for 
     purposes of this section.
       ``(4) No double benefit.--No deduction or other credit 
     under this chapter shall take into account any expense taken 
     into account for purposes of determining the credit under 
     this section.
       ``(5) Identifying information required with respect to 
     service provider.--No credit shall be allowed under 
     subsection (a) for any amount paid to any person unless--
       ``(A) the name, address, and taxpayer identification number 
     of such person are included on the return claiming the 
     credit, or
       ``(B) if such person is an organization described in 
     section 501(c)(3) and exempt from tax under section 501(a), 
     the name and address of such person are included on the 
     return claiming the credit.

     In the case of a failure to provide the information required 
     under the preceding sentence, the preceding sentence shall 
     not apply if it is shown that the taxpayer exercised due 
     diligence in attempting to provide the information so 
     required.
       ``(6) Identifying information required with respect to 
     qualified senior citizens.--No credit shall be allowed under 
     this section with respect to any qualified senior citizen 
     unless the TIN of such senior citizen is included on the 
     return claiming the credit.''.
       (b) Conforming Amendments.--
       (1) Section 6213(g)(2)(H) of the Internal Revenue Code of 
     1986 (relating to mathematical or clerical error) is amended 
     by inserting ``, section 25C (relating to elder care 
     expenses),'' after ``employment)''.
       (2) The table of sections for subpart A of part IV of 
     subchapter A of chapter 1 of such Code is amended by 
     inserting after the item relating to section 25B the 
     following new item:

``Sec. 25C Elder care expenses.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to expenses incurred in taxable years beginning 
     after December 31, 2004.

         Senior Elder Care Relief and Empowerment (Secure) Act


                      brief summary of provisions

                               April 2005

       How is the tax credit structured?
       50% tax credit rate for qualified expenses for elder care 
     provided to a qualified senior citizen with long-term care 
     needs, for all qualified expenses above a ``floor'' of $1,000 
     already provided by the taxpayer (for example: $500 credit on 
     first $2,000 spent; $10,000 credit on first $21,000 spent).
       What are the qualifications for beneficiaries of the tax 
     credit?
       Must have reached at least normal retirement age under 
     Social Security (currently age 65), Certification by a 
     licensed physician that the cared-for senior is unable to 
     perform at least two basic activities of daily living.
       Who can claim the credit?
       Senior for his/her own care, Taxpaying family member, Any 
     taxpaying family claiming the cared-for senior as a 
     dependent.
       What are the qualified expenses?
       Un-reimbursable costs (those not covered by Medicare or 
     other insurance), Physical assistance with essential daily 
     activities to prevent injury, Long-term care expenses 
     including normal household services, Architectural expenses 
     necessary to modify the senior's residence, Respite care, 
     Adult daycare, Assisted living services (non-housing related 
     expenses), Independent living, Home care, Home health care.

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