Assessment of the Use of Tax Credits for Families Who Provide Health Care to Disabled Elderly Relatives

Pursuant to a congressional request, GAO evaluated tax relief mechanisms which are used as a way of providing financial assistance to families who care for chronically ill elderly relatives. In considering tax credits as a means of providing financial support to these families, GAO examined: (1) those financial costs that families incur when caring for their elderly disabled relatives; (2) the effectiveness of tax relief programs that currently assist families which provide care; and (3) the issues which should be considered in assessing the merits of legislative proposals for tax credits.

GAO found that: (1) families are the predominant providers of long-term care for the elderly, but the information that is available is inadequate for a complete assessment of the financial costs of this care; and (2) several States have proposed tax relief legislation and Federal tax provisions exist to offset some expenses, although rigid eligibility requirements result in few families taking advantage of them. GAO stated that several issues that should be taken into account when assessing tax credit legislation are: who would benefit, what it would cost, what oversight problems can be expected, and what the problems are in evaluating the effect of tax credits.