Posted on October 22, 2014 Issues: Child Care & Early Learning

(Washington, D.C.)—Families in thirty-three states are better off under one or more key child care policies in 2014 than in 2013, but have lost ground in thirteen states, according to a report released today by the National Women’s Law Center (NWLC). The state-by-state report, Turning the Corner: State Child Care Assistance Policies 2014, examines five critical factors that determine the affordability, accessibility and quality of assistance for all fifty states and the District of Columbia.

The report marks the second year in a row in which NWLC found that the situations for families improved under child care policies in more states than it worsened, demonstrating a turnaround from previous years. However, many of these improvements were modest, and too many families still cannot receive the help they need to obtain reliable, high-quality care. For example, only one state pays child care providers who serve families receiving child care assistance at the federally recommended reimbursement rate, and long waiting lists prevent low-income families in many states from getting assistance at all.  

“We can make this a turning point for the families that need assistance,” said NWLC Co-President Nancy Duff Campbell. “States have started to make progress in some areas, but this is no time to pull back on efforts. There are still too many parents who cannot afford the child care they need to work and ensure economic stability for their families, and too many children who cannot obtain the high-quality care they need to learn and develop.”

Turning the Corner: State Child Care Assistance Policies 2014 compares data for February 2014 to data for February 2013 and 2001 on the critical measures of 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. 

Key Indicators

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 2013 and 2014.
  • Thirty-four states increased their income eligibility limits by a dollar amount to adjust for inflation between 2013 and 2014.
  • Twelve states had the same income eligibility limits in 2014 as in 2013.
  • Three states had income eligibility limits that were lower in 2014 than in 2013.
  • The income eligibility limit was above 100 percent of the federal poverty level ($19,790 a year for a family of three in 2014) in all but one state in 2014. A family with an income above 150 percent of poverty ($29,685 a year for a family of three in 2014) could not qualify for child care assistance in fifteen states. A family with an income above 200 percent of poverty ($39,580 a year for a family of three in 2014) 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.

  • Eighteen states had waiting lists or turned away eligible families without adding their names to a waiting list in 2014, a slight decrease from nineteen states in 2013, and twenty-one states in 2001. 
  • Of the thirteen states that had waiting lists in both 2013 and 2014 and for which comparable data are available, ten states had shorter waiting lists in 2014 than in 2013, and three 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 income, using a sliding scale that is designed to charge progressively higher copayments to families at higher income levels. 

  • In most states, families receiving child care assistance paid the same percentage of their income in copayments in 2014 as in 2013. Copayments decreased as a percentage of income for a family at 150 percent of poverty in four states, and for a family at 100 percent of poverty in five states. Copayments increased as a percentage of income for a family at 150 percent of poverty in only two states, and for a family at 100 percent of poverty in only one state.  
  • In twenty-eight states, the copayment for a family of three at 150 percent of poverty was above 7.2 percent of income ($178 per month)—the average percentage spent on child care among families who pay for child care—in 2014. In an additional nine states, a family at this income level was not eligible for child care assistance.
  • In seventeen states, the copayment for a family of three at 100 percent of poverty was above 7.2 percent of income ($119 per month) in 2014. In one additional state, a family at this income level was not eligible for child care assistance.

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.

  • Sixteen states increased at least some of their reimbursement rates for providers serving families receiving child care assistance, and no state reduced its reimbursement rates, between 2013 and 2014.
     
  • Yet, only one state set reimbursement rates for child care providers at the federally recommended level in 2014, compared to three states in 2013 and twenty-two states in 2001.
  • In thirty-four states, reimbursement rates for center-based care for a four-year-old in 2014 were at least 20 percent below the federally recommended level.
  • In thirty states, reimbursement rates for center-based care for a one-year-old in 2014 were at least 20 percent below the federally recommended level.
     
  • Thirty-seven states had higher reimbursement rates for higher-quality providers in 2014—an increase from thirty-three states in 2013. However, in more than three-quarters of these states, even the higher rates were below the federally recommended reimbursement rates for care at all levels of quality in 2014.

“Qualified child care providers build the foundation for a child’s future success,” said Helen Blank, NWLC Director of Child Care and Early Learning. “We need to pay skilled child care providers a fair and livable wage if we expect to give our children a strong start. This is not an area where we can cut corners.”

Eligibility for Families with Parents Searching for a Job:  

Child care assistance given to parents searching for work allows them to get or keep the child care they need to 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 2014, the same as in 2013. Four of these states increased the length of time families could continue receiving child care assistance while a parent searched for a job between 2013 and 2014.
     
  • Fourteen states allowed families to qualify for and begin receiving child care assistance while a parent searched for a job in 2014, the same as in 2013.

 

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Contact: Maria Patrick (mpatrick@nwlc.org) or 202-588-5180
                Mia Jacobs (mjacobs@nwlc.org) or 202-588-5180