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How Much Is A Homemaker Worth?

Now here is a subject that, if not handled properly, can get me into real trouble! My wife Beeb takes very good care of us. “Us” includes me, our four teenagers (two driving), our home, our two dogs, and two cats. I have often said that I would not want her job for any sum of money: she is “at work” from the time she gets up in the morning until she crawls back into bed around midnight. Clearly she is irreplaceable.

However, in our business we must routinely find ways to replace the irreplaceable because many claims involve the loss of services of a homemaker. As horrible as it is to consider, how do we quantify such a loss? To find out how much his or her services would net as individual professional careers, author Porcshe Moran examined some of the tasks that a homemaker might perform in her article in Investopedia, published January 16, 2012.(1) She only took into consideration tasks which have monetary value and used the lowest value for each calculation.

Private Chef
Meal preparation is one of the major tasks of most homemakers. From breakfast to dinner, there is plenty of meal planning and cooking to be done and grocery shopping is another chore that needs to be factored in. The American Personal Chef Association reports that its personal chefs make $200 to $500 a day. Add five bucks for grocery delivery. Total cost for services: $1,005 per five day work week x 52 weeks = $52,260 per year.

House Cleaner
Typical cleaning duties include vacuuming, dusting, sweeping, scrubbing sinks as well as loading the dishwasher and making beds. Professional maids or house cleaning service providers will charge by the hour, number of rooms, or square footage of the home. Total cost for services: $118 per week X 52 Weeks = $6,136 per year.

Child Care
Homemakers provide full-time, live-in child care. The International Nanny Association's 2011 survey found that nannies make $600 to $950 per week in gross wages, on average. Total cost for services: $600 a week plus perks/benefits x 52 Weeks = $31,200 per year.

Driver
A private car service might seem like a high-end luxury to most, but the beneficiaries of a homemaker get this service on a daily basis. Companies like Red Cap, which provides personal drivers that use the client's own car as the means of transportation, offer a glimpse into the cost of this homemaker task. Total cost for services: $1,000 per year + [(estimated miles driven 8000 miles / 50 MPH) x 60 min/hr x $0.33 per minute] = $4,168 total per year.

Laundry Service
Professional laundry services charge by the pound. For instance, Susie's Suds Home Laundry Service, Inc. in Texas charges 90 cents to $1.00 a pound to wash, dry, fold, hang and steam your clothes. Total cost for services: $0.90 per pound x 4 pounds of clothes per day x 5 days per weeks x 52 weeks = $936 total per year.

Lawn Maintenance
Basic maintenance of the exterior property is a less common, but possible duty of a homemaker. This could include things such as mowing, debris removal, edging and trimming the lawn. These services cost about $30 a week on average. Total cost for services: $30 per week x 52 weeks = $1,560 total per year.

Bottom Line
Total cost for a year of full homemaker services = $96,261 per year.

As you can see, the everyday services performed by a homemaker could result in a considerable wage if he or she took those skills to the marketplace or they could result in a considerable cost if they had to be replaced. The economic loss resulting from the inability of a homemaker to provide these services calculated over the remaining lifetime of 47-year-old (approximately 35 years) is $ 3,229,135. Please note this number is not indexed for inflation. Clearly, the services of the homemaker are not provided all at once but over time, in this case 35 years. What is the actual cost to replace a lifetime of homemaker services? Using today’s rates, we can provide a structured settlement annuity that pays out $ 91,261 per year in guaranteed tax free benefits for the life of a 47-year-old homemaker for a cost of $ 1,864,663. The use of a structured settlement reduced the cost to replace these household services by over 40% - quite a savings!

Of course, we all know that real live homemakers contribute much, much more to a home than merely the tasks that I or Ms. Moran have identified. To the affected family, no amount of money can replace real thing. Yet, when resolving a case, there are times when we simply must quantify such services in monetary form. Matching a specific stream of payments to clearly articulated needs is an exceptional way to resolve the issue. It doesn’t leave much room for argument.

Do you have a case involving the loss of household services as a component of damages? Need help calculating how much a Homemaker might be worth? Call Frank C. Kilcoyne, CSSC at 800-544-5533, I am here to help.

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(1) Moran, Porcshe. "How Much Is A Homemaker Worth?" Investopedia.com. Financialedge by Investopia.com, 16 Jan. 2012. Web. 09 Feb. 2012.