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By capturing the actual costs associated with meeting basic needs, a new tool can measure the economic security of grandparents raising grandchildren.
In 2011, 7 million U.S. grandparent heads of households had a grandchild living with them. Approximately 3 million had primary responsibility for meeting their grandchildren's basic needs. In New England alone, 237,000 grandparents had grandchildren living with them, and 77,000 were the primary caregivers.
But grandparents over 65 often face financial challenges supporting an additional dependent on a retirement income without financial help from the child's parents. Financial hardships can have an impact on the emotional, mental, and physical well-being of both grandparent and grandchildren. Nationally, more than one in four grandparent caregivers lives in overcrowded conditions, more than one in six pays over half their income in rent, and 60 percent who qualify for rent subsidies do not receive any. As for the grandchildren, although 48 percent of those living with grandparents experience some food insecurity, only about 43 percent receive food stamps.
The Federal Poverty Guidelines (Federal Poverty Levels, FPL) are the official measure of the minimum income needed to meet the basic needs of individuals and families. The amounts are often used to set eligibility and benefits for public programs. But numerous studies have documented that the FPL is an outdated and inaccurate reflection of the actual incomes families need. It is also a poor metric to identify the economic needs of custodial grandparents.
The Supplemental Poverty Measure (SPM) was developed to address FPL shortcomings, but being based on individuals' current spending, it doesn't necessarily measure actual need. It includes people who spend only $100 on food per month, but that amount may represent food insecurity. A better way to measure economic security is to capture the actual costs associated with basic needs, such as shelter, food, health care, and transportation.
Enter the Elder Economic Security Standard Index, an evidence-based measure of economic security that reflects the current actual cost of basic needs at the county level for retired adults age 65 and over who receive no public assistance. The index was developed by Wider Opportunities for Women and the University of Massachusetts, Boston, Gerontology Institute to address the failings of the FPL for older adults. The UCLA Center for Health Policy Research and the Insight Center for Community Economic Development adapted the index and calculated it for California. As of September 2011, California law requires Area Agencies on Aging to use the index for program and planning purposes.