Gaps in State Child Care Assistance Policies Limit Low-Income Families’ Access to Affordable, Quality Care, New NWLC Report Finds

(Washington, D.C.) Twenty states had waiting lists for child care assistance or turned away eligible families without adding their names to a waiting list in 2016—preventing numerous low-income families from getting any assistance at all—according to a new state-by-state report released today by the National Women’s Law Center (NWLC). In many states, large numbers of low-income families could not even qualify for child care assistance:  a family with an income above 150 percent of poverty ($30,240 a year for a family of three in 2016) did not qualify for child care assistance in 17 states. Only one state set reimbursement rates for child care providers at the federally recommended level, preventing many families from using a high-quality provider. 

Red Light Green Light:  State Child Care Assistance Policies 2016 examines the subsidy programs that help low-income families pay for child care in each state. The report reveals the uneven and insufficient progress on policies throughout the country. The analysis compares data for February 2016 to data for February 2015 and 2001 on five crucial measures—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. These critical factors determine the affordability, accessibility and quality of assistance in every state and the District of Columbia.

“Child care is a key economic issue for millions of working women,” said NWLC Co-President Nancy Duff Campbell. “Without financial support, many parents can’t afford the high costs of child care. The implications are serious. Too many parents are forced to patch together makeshift arrangements for their children. Too many children are denied the high-quality child care they need to put them on a path to success. It’s past time to bring the country’s policies in line with the reality of American women’s lives and make high-quality child care accessible and affordable.”  

 

Topline Indicators:

Income Eligibility   

A family’s access to child care assistance depends primarily on a state’s income eligibility limit. The report reviews states’ 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.

  • Four states increased their income eligibility limits by a dollar amount that exceeded inflation between 2015 and 2016.
  • Thirty states increased their income eligibility limits by a dollar amount to adjust for inflation between 2015 and 2016.
  • Sixteen states had the same income eligibility limits in 2016 as in 2015.
  • One state lowered its income eligibility limit between 2015 and 2016.
  • The income eligibility limit was above 100 percent of the federal poverty level ($20,160 a year for a family of three in 2016) in all states in 2016. A family with an income above 150 percent of poverty ($30,240 a year for a family of three in 2016) could not qualify for child care assistance in 17 states. A family with an income above 200 percent of poverty ($40,320 a year for a family of three in 2016) could not qualify for assistance in 39 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 for months or years, and some never receive financial help at all.

  • Twenty states had waiting lists or turned away eligible families without adding their names to a waiting list in 2016, a slight decrease from 21 states in 2015 and in 2001. 
  • Of the 17 states that had waiting lists in both 2015 and 2016 and for which comparable data are available, seven states had shorter waiting lists in 2016 than in 2015, and ten 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 2016 as in 2015. Copayments decreased as a percentage of income for a family at 150 percent of poverty in three states, and for a family at 100 percent of poverty in one state. Copayments increased as a percentage of income for a family at 150 percent of poverty in one state, and for a family at 100 percent of poverty in three states. 
  • In 26 states, the copayment for a family of three at 150 percent of poverty was above 7.2 percent of income ($181 per month)—the average percentage spent on child care among families who pay for child care—in 2016. In an additional seven states, a family at this income level was not eligible for child care assistance.
  • In 13 states, the copayment for a family of three at 100 percent of poverty was above 7.2 percent of income ($121 per month) in 2016.

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 choose not to serve families receiving assistance.

  • Eighteen 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 2015 and 2016.
  • Yet only one state set reimbursement rates for child care providers at the federally recommended level in 2016, the same number as in 2015 and significantly below the number of states—22—in 2001.
  • In 31 states, reimbursement rates for center-based care for a four-year-old in 2016 were at least 20 percent below the federally recommended level.
  • In 22 states, reimbursement rates for center-based care for a one-year-old in 2016 were at least 20 percent below the federally recommended level.
  • Thirty-eight states had higher reimbursement rates for higher-quality providers in 2016—a slight decrease from 39 states in 2015. 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 2016.

“Too often we ignore the child care workforce and downplay the necessity of having qualified and experienced child care providers to help put children on the path to success,” said Helen Blank, NWLC Director of Child Care and Early Learning. “Underpaying these providers is unfair to them and their families and to the children who miss out on getting a solid start.”   

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-eight states allowed families receiving child care assistance to continue receiving it while a parent searched for a job in 2016, two more than in 2015. Five of these states increased the length of time families could continue receiving child care assistance while a parent searched for a job between 2015 and 2016.
  • Fourteen states allowed families to qualify for and begin receiving child care assistance while a parent searched for a job in 2016, two more than in 2015.

 

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The National Women's Law Center is a non-profit organization that has been working since 1972 to advance and protect women's equality and opportunity.  The Center focuses on major policy areas of importance to women and their families including economic security, education, employment and health, with special attention given to the concerns of low-income women.  For more information on the Center, visit:  www.nwlc.org.

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