Committee hears testimony on S.51 unpaid caregiver tax credit; tax department flags verification, fraud risk

The Finance Committee heard testimony on S.51, a bill to create a refundable tax credit for unpaid family caregivers. Caroline Hoff, a Middlebury College student, and Rebecca Samoroff, Deputy Commissioner at the Tax Department, provided the committee with data and administrative perspectives.

Hoff told the panel she remained concerned about the scale and financial toll of unpaid caregiving and urged support for the bill. "First, because of the numbers, the hours, the toll, the scale of unpaid caregiving, but also because I've come to understand that how we support caregivers directly impacts how well they can care for others," Hoff said, citing national surveys and state data used in the bill's findings.

Why it matters: Testimony combined personal and research-based claims that unpaid caregiving reduces workforce participation and imposes long-term financial harms on caregivers. The Tax Department warned that key design choices in S.51 — notably the requirement that caregiving be unpaid and verification of medical need and hours — raise compliance and fraud risks that could make administration difficult.

Committee discussion and evidence

Hoff summarized research the committee had already seen, including AARP and Family Caregivers Alliance findings, and noted several data points cited in the bill's findings: that 45% of caregivers nationally report at least one negative financial impact, one in four caregivers have taken on extra debt, 28% have stopped saving, and that caregivers aged 50 and older face elevated workforce exit rates. Hoff also questioned the commonly cited figure of 70,000 unpaid caregivers in Vermont, saying the AARP definition includes nonrelatives and short-term caregivers and that applying S.51’s narrower eligibility requirements would reduce the pool of eligible Vermonters.

Rebecca Samoroff outlined administrative concerns from the Tax Department. She said the bill's refundable-credit design is straightforward in concept but difficult to verify in practice when eligibility rests on an "unpaid" caregiving relationship and medical-need criteria. "The biggest stumble is verification. Without some way to verify, the risk of fraud increases exponentially," Samoroff said, noting that tax administration generally relies on a paper trail such as receipts or documented dependents.

Samoroff and committee members discussed potential verification mechanisms mentioned in the hearing: a medical attestation tied to activities-of-daily-living (ADL) assessments, limiting credit eligibility to caregivers of relatives by blood, marriage or adoption (as drafted in S.51), and exemptions for caregivers already paid through state or federal programs. A committee member said they had asked the Department of Aging and Independent Living to provide more information on existing programs that pay caregivers and on ADL scoring and documentation used in other state programs.

Points of contention and options raised

- Eligibility scope: Hoff and others highlighted that national estimates include friends and short-term caregivers who would not qualify under S.51’s family-only and duration thresholds, potentially reducing fiscal exposure.

- Verification and privacy: Samoroff warned that requiring staff to probe sensitive family medical details would be burdensome and invasive; she suggested medical attestation forms that mirror ADL assessments used in home-health or Medicaid contexts as a possible path.

- Hours and duration thresholds: Committee members noted the bill's 20-hours-per-week and 12-month thresholds could be difficult to verify and invite fraudulent claims; lawmakers discussed the possibility of narrowing eligibility or using income-based targeting to limit fiscal impact.

- Double-dipping: Tax staff and a committee member said the committee could exclude people receiving payment through existing programs (for example, some Medicaid or SSI-related caregiver payments) to avoid duplicate benefits.

Next steps and committee direction

The committee did not take a formal vote on S.51 during the recorded discussion. Members asked staff to gather additional information, including input from the Department of Aging and Independent Living on ADL certification and the identity of state or federal programs that pay caregivers. Members discussed the political and fiscal realities of advancing a sizable refundable credit in a tight revenue year and suggested considering a limited, verifiable pilot or narrower credit as alternatives.

Ending

The committee left the bill in discussion, with staff follow-up requested on verification options and related programs. No formal action or vote on S.51 was recorded in the transcript.