October 12, 2012

Posted on October 11, 2012 |

Posted by Karen Schulman, Senior Policy Analyst

Families in 27 states were worse off under one or more key state child care assistance policies in 2012 than in 2011 and better off in just 17 states, according a new report from the National Women’s Law Center. This was the second year in row with negative news for families needing help paying for child care. Families in 37 states were worse off under one or more policies in 2011 than in 2010, and better off in only 11 states.

The new report, Downward Slide: State Child Care Assistance Policies 2012, examines state policies as of February 2012 in five important areas—income eligibility limits for child care assistance, waiting lists for child care assistance, copayments for families receiving child care assistance, reimbursement rates for child care providers, and eligibility for child care assistance while a parent searches for a job. Gaps in these policies leave many families without access to child care assistance or without the level of assistance they need to afford good-quality care for their children.

Many families with incomes too low to afford child care on their own are not able to receive assistance under their states’ restrictive eligibility limits. A family with an income above 150 percent of poverty ($28,635 a year for a family of three in 2012) would not qualify for child care assistance in 14 states. A family with an income above 200 percent of poverty ($38,180 a year for a family of three in 2012) would not qualify for assistance in 37 states.

Even if families are eligible for child care assistance, they may not receive it. Nearly half (23) of the states have waiting lists for child care assistance or turn families away without taking their names. In some states the lists are long, and families may wait months before receiving assistance or may not receive it at all. As of early 2012, there were nearly 72,000 children on the waiting list in Florida, over 17,000 children on the waiting list in Maryland, and over 42,000 children on the waiting list in North Carolina. Studies have shown that families on the waiting list often struggle to afford child care while paying other bills, use lower-quality care because they cannot afford higher-quality care that is more expensive, or are unable to afford any child care—making it difficult or impossible for parents to work.

Families able to receive child care assistance may still have significant costs for care due to high copayments, and in several states these copayments are increasing. In nearly one-fifth of the states, families paid a higher percentage of their income in copayments in 2012 than in 2011. But in only one or two states, depending on income, families paid a lower percentage of their income in copayments in 2012 than in 2011.

Families able to receive child care assistance also may not have access to a choice of good-quality child care providers. Only one state set its reimbursement rates for child care providers at the federally recommended level in 2012, slightly lower than the three states in 2011 and significantly lower than the 22 states in 2001. Low rates deprive child care providers that serve families receiving child care assistance of the resources necessary to hire and retain well-qualified staff, purchase toys and books, maintain facilities, and cover all of the other costs involved in offering a good learning experience for young children. In some cases, low rates can discourage high-quality providers from even enrolling families receiving child care assistance, leaving these families with limited options and denying early learning opportunities to children who stand to benefit the most from them.

The negative trends over the past two years are likely explained in part by the exhaustion of $2 billion in additional funds for child care provided to states through the American Recovery and Reinvestment Act in 2009 and 2010. Reversing these trends and expanding access to child care assistance will require further investments at the state and federal level. Without investments in this essential support for families, many parents will not have the child care they need to work, many children will not have the safe, stable care that fosters their growth and learning, and our nation will lack the strong workforce we need for our current and future prosperity.