An article in the Summer 2014 issue of Communities and Banking identifies a new tool to measure the economic security of grandparents raising grandchildren.
According to the article, in 2011, over 3 million grandparents were primary caregivers for their grandchildren. Typically, grandparents over age 65 must support their grandchildren on a retirement income without financial help from the child’s parents. The resulting financial hardships often negatively affect both grandparents’ and grandchildren’s emotional, mental, and physical health.
Historically, federal poverty levels (FPL) have been used to set eligibility and benefits for public assistance programs. However, many studies have deemed the FPL as outdated and inaccurate. The Supplemental Poverty Measure (SPM) was created to address issues with the FPL, but because SPM is based on a person’s current spending, it does not measure actual need.
To address these shortcomings, Wilder Opportunities for Women and the University of Massachusetts developed the “Elder Economic Security Standard Index.” The index measures the current actual cost of the basic needs of retirees age 65 and older who are not receiving public assistance. The authors cite the index as an accurate measure of economic security and the income grandparents need to meet unexpected basic living expenses.
California adapted the index, and now requires its Area Agencies on Aging to use it to plan and implement aging programs.
