Including Homemakers in Social Security

Abstract

For some time, many people have felt that homemaking and/or childcare duties should be classified as “work,” and as such, these people should be included in social security systems. This paper analyzes the current provision for homemakers in the Canada and Québec Pension Plans (C/QPP), along with three other methods aimed at improving C/QPP benefits for homemakers. It concludes that splitting incomes between married couples on a voluntary basis has several desirable characteristics. However, due to a reduction in income taxes payable, the Canadian government(s) would likely reject this approach. To analyze further alternatives, the paper also reviews a study presented by the U.S. Subcommittee on Social Security that looked at various earnings sharing schemes within the Old Age, Survivors and Disability Insurance (OASDI) scheme. Due to the complexity of OASDI, it would not be possible to modify benefits for homemakers without affecting other groups (such as divorced persons and widow(er)s). As such, the subcommittee had several standards for analyzing any potential modifications to OASDI. However, none of the plans presented ccomplished all of the goals set out by the subcommittee. In addition, there would be vast administrative difficulties associated with implementing any of the earnings sharing schemes. Even if these problems could be overcome, the two national security systems are very different, so proposed solutions under the U.S. system might not be appropriate to the Canadian system.