Posted on October 23, 2013 Issues: Child Care Child Care & Early Learning Child Care Assistance

(Washington, D.C.) Families in twenty-seven states are better off under one or more key child care policies in 2013 than in 2012, but have lost ground in twenty-four states, according to a report released today by the National Women’s Law Center (NWLC).  In 2012, families in twenty-seven states were worse off under one or more child care assistance policies, and in 2011, families in thirty-seven states were worse off.  Despite the recent improvement, the child care landscape is uneven at best:  just three states meet the federally recommended benchmark for paying child care providers, and long waiting lists prevent low-income families in many states from gaining access to affordable, good-quality care.

“It’s a pivotal moment for child care assistance,” said NWLC Co-President Nancy Duff Campbell.  “We can either build on this progress or squander the opportunity.  Automatic federal budget cuts from the sequester threaten these gains, but we can build on them if we end the sequester and step up our investments in child care, as proposed in President Obama’s early learning initiative.”  

NWLC’s state-by-state report, Pivot Point: State Child Care Assistance Policies 2013, examines five critical factors that determine the affordability, accessibility, and quality of assistance in each state: income eligibility, waiting lists for assistance, copayments required of parents receiving assistance, reimbursement rates for child care providers, and eligibility for parents searching for a job. The report, which examines these policies in all 50 states and the District of Columbia, compares data for February 2013 to data for February 2012 and 2001. 

Income Eligibility:    

A family’s access to child care assistance depends primarily on a state’s income eligibility limit.  The report reviews states’ income eligibility limits, including whether they have been properly adjusted for inflation.  A family whose income level has simply kept pace with inflation could lose eligibility if limits are not adjusted upward to account for inflation.

  • Two states increased their income eligibility limits by a dollar amount that exceeded inflation between 2012 and 2013.
  • Twenty-three states increased their income eligibility limits by a dollar amount to adjust for inflation between 2012 and 2013.
  • In nineteen states, the income eligibility limit was the same as a dollar amount in 2013 as in 2012.
  • In seven states, the income eligibility limit was lower as a dollar amount in 2013 than in 2012.
  • The income eligibility limit was above 100 percent of the federal poverty level ($19,530 a year for a family of three in 2013) in all states in 2013.  A family with an income above 150 percent of poverty ($29,295 a year for a family of three in 2013) could not qualify for child care assistance in fourteen states.  A family with an income above 200 percent of poverty ($39,060 a year for a family of three in 2013) could not qualify for assistance in thirty-eight states.  In most communities across the country, a family needs an income equal to at least 200 percent of poverty to meet its basic needs.

Waiting Lists:   

Even when families are eligible for assistance, they may not receive it.  Some families are placed on waiting lists for assistance, some remain on the list indefinitely, and some never receive financial help at all.

  • Nineteen states had waiting lists or turned away eligible families without adding their names to a waiting list in 2013, compared to twenty-three states in 2012, and twenty-one states in 2001. 
  • Of the fifteen states that had waiting lists in both 2012 and 2013 and for which comparable data are available, thirteen states had shorter waiting lists in 2013 than in 2012, and two states had longer waiting lists.

Copayments:

Copayment levels determine whether low-income families receiving child care assistance face significant out-of-pocket costs for care.  Most states require families to contribute to their child care costs based on a sliding scale, which is designed to charge progressively higher copayments to families at higher income levels. 

  • In eight states, copayments for a family of three at 150 percent of poverty increased as a percentage of income between 2012 and 2013.  In thirty-two states, copayments remained the same as a percentage of income.  In just three states, copayments decreased as a percentage of income.
  • In thirty states, the copayment for a family of three at 150 percent of the poverty level was above 7.2 percent of income ($176 per month)—the average percentage spent on child care among families who pay for child care—in 2013.  In an additional eight states, a family at this income level was not eligible for child care assistance.
  • In eighteen states, the copayment for a family of three at 100 percent of the poverty level was above 7.2 percent of income ($117 per month) in 2013. 

Reimbursement Rates:    

States determine reimbursement rates for providers who care for children receiving child care assistance. The rates can vary by region, the child’s age, type of care and other factors.  Low rates undermine providers’ ability to maintain their business, attract and retain qualified staff, and provide the equipment and materials needed to create a good learning environment. When reimbursement rates fall short, providers lack the necessary resources to offer high-quality care, and some providers may decide to stop serving families receiving assistance.

  • Only three states set reimbursement rates for child care providers at the federally recommended level in 2013, compared to one state in 2012 and twenty-two states in 2001.
  • In thirty-two states, reimbursement rates for center-based care for a four-year-old in 2013 were at least 20 percent below the federally recommended level.
  • In twenty-six states, reimbursement rates for center-based care for a one-year-old in 2013 were at least 20 percent below the federally recommended level.

“Success starts with highly qualified providers,” said Helen Blank, NWLC Director of Child Care and Early Learning. “By failing to pay them a fair and livable wage, we lose skilled providers and shortchange our country’s most vulnerable children who deserve a nurturing environment that will give them a strong start.”

Eligibility for Families with Parents Searching for a Job:  

Child care assistance given to parents searching for work allows them to hold onto child care until they secure a job, eases the demands and stress of the job search, and increases the likelihood of a smooth transition for both the parent and child once the parent starts a job.      

  • Forty-six states allowed families receiving child care assistance to continue receiving it while a parent searched for a job in 2013, the same as in 2012. 
  • Fifteen states allowed families to qualify for and begin receiving child care assistance while a parent searched for a job in 2013, one fewer state than in 2012.

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The National Women’s Law Center is a Washington, D.C.-based nonprofit organization working to expand opportunities and eliminate barriers for women and their families, with a major emphasis on women’s health, education and employment opportunities, and family economic security. For more information on the Center, visit: http://www.nwlc.org.