ACQUIRING AND RETAINING CHILD CARE ASSISTANCEHelen Blank

National Women’s Law Center

January 2012

CHILD CARE ASSISTANCE HELPS PARENTS WORK AND HELPS CHILDREN LEARN

A family’s ability to obtain child care assistance depends on their state’s income eligibility limit.

A family with an income slightly above 150 percent of poverty ($27,795 a year for a family of three) cannot qualify for help in 13 states.

A family with an income at 200 percent of poverty ($37,060 a year for a family of three) cannot qualify for help in 35 states.

WAITING LISTS

In 2011, 22 states had waiting lists or frozen intake for at least some families applying for assistance.

Twelve states had longer waiting lists than in 2010.

Some were quite long – almost 68,000 children in Florida, almost 47,000 in North Carolina, and 14,000 in Arkansas.

WAITING LISTS AND GAPS CONTINUE

Maryland’s waiting list now includes over 7,900 families.

Massachusetts had 24,000 children on their waiting list this summer.

Mississippi cut off child care assistance to nearly 4,000 families last spring.

COPAYMENTS Unmanageable copayment levels make it

difficult for families. When parents can’t afford them, providers may be forced to absorb the lost income.

Parents may be discouraged from participating altogether.

Copayments were higher as a percentage of family income in 2011 than in 2001 in approximately two-fifths to three-fifths of the states, depending on income.

In over one-third to over one-half of the states, depending on income, a family was required to pay more in copayments than the nationwide average amount that families who pay for child care spent on child care.

REIMBURSEMENT RATES States are required to conduct surveys of

child care market rates every two years, but are not required to set rates at any particular level or update rates regularly.

Federal regulations recommend that rates be set at the 75th percentile of current market rates, a rate that is designed to allow families access to 75 percent of the providers in their communities.

In 2011, only three states set their reimbursement rates at the 75th percentile of current market rates, in contrast to 22 states in 2001.

RATES CONTINUED In 25 states, reimbursement rates for center-

based care for a four-year-old in 2011 were at least 20 percent below the 75th percentile of market rates compared to 21 states in 2010.

In 24 states reimbursement rates for center-based care for a one-year-old in 2011 were at least 20 percent below the 75th percentile of market rates compared to 21 states in 2010.

Thirty-nine states allowed child care providers to charge parents receiving child care assistance the difference between the state reimbursement rate and the fee that the providers charged private-paying parents, if the state reimbursement rate was lower.

TIERED RATES FOR HIGHER QUALITY Thirty-one states paid

higher reimbursement rates for high-quality care in 2010.

In approximately four-fifths of the 31 states with tiered rates in 2011, the reimbursement rate for center-based care for a four-year-old at the highest quality level was still below the 75th percentile of current market rates.

SEARCHING FOR A JOB Forty-six states allow

families receiving child care assistance to continue receiving it while a parent searches for a job.

Assistance ranges from less than one month to six months.

Seventeen states allow families not receiving child care assistance to qualify for help while a parent searches for a job.

ESTABLISH SUBSIDY POLICIES THAT CREATE MORE STABILITY FOR PARENTS AND CHILDREN

Most families don’t stay in the subsidy system for long periods of time.

Require eligibility redetermination only once per year.

Set a two tier eligibility level. Notify parents and providers about

redetermination deadlines. Reduce in-person visits required to obtain

and retain subsidies (mail, phone, fax). Minimize reporting requirements. Set longer periods for job searching.

ESTABLISH POLICIES THAT CREATE STABILITY CONTINUED Ensure caseworkers are

responsive. Establish non-traditional office

hours. Help TANF families navigate

between agencies. Minimize verification and

documentation requirements. Make accommodations for self-

employment, overtime, shift work. Provide adequate help to find child

care. Allow for retention of eligibility

during temporary changes in status.

ESTABLISH SUBSIDY POLICIES THAT CREATE MORE STABILITY FOR PROVIDERS AND PARENTS Use payment practices that reflect generally

accepted payment policies used for private-paying parents.

Make timely payments to providers. Notify providers of changes in parents’ status

that affect eligibility for subsidies. Allow a grace period and appeals process

when subsidies are terminated. Allow families to reapply without going on

the waiting list.

USE SUBSIDY POLICIES TO ENCOURAGE LINKAGES WITH PART DAY PROGRAMS

Pay full-day reimbursement for care provided at least 5 or 6 hours to encourage prekindergarten/Head Start – child care collaboration.

Allow child care programs with higher quality ratings to provide prekindergarten.

CONTACT

Helen BlankDirector of Leadership and Public PolicyNational Women’s Law Centerhblank@nwlc.org

For more information, visit: www.nwlc.org.