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)For Immediate Release: Monday, September 24, 2007
Contact:
CHILD CARE POLICIES MODESTLY IMPROVE,
BUT REMAIN INADEQUATE
Low-Income Families Still Struggle to Access
Affordable, Good Quality Child Care
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The analysis, State Child Care Assistance Policies 2007: Some Steps Forward, More Progress Needed, compares child care assistance policies in 2007 to 2006 and 2001 in four policy areas: reimbursement rates for providers, income eligibility, waiting lists for assistance and co-payment requirements. NWLC used 2001 as a basis for comparison because it was just after the
“NWLC’s analysis demonstrates that states have made up some ground during the last year. But it’s nothing to cheer about when on many indicators, most states are behind where they were last year and most states are behind where they were in 2001,” said Nancy Duff Campbell, Co-President of the National Women’s Law Center. “We absolutely must do better for low-income families and their children.”
Between February 2006 and February 2007, states made some progress on income eligibility and waiting lists, NWLC found. But states made far less progress on copayments and made virtually no progress with respect to reimbursement rates.
NWLC also found that states are particularly remiss in compensating providers who serve low-income children. The federal government recommends that states set their reimbursement rates at the 75th percentile of market rates, which effectively allows families to access three-quarters of the providers in their communities. But in 2007, only nine states set their maximum reimbursement rates at this level, the same as in 2006. In contrast, 22 states did so in 2001. Low reimbursement rates make it difficult for families to obtain high-quality child care, and they also make it harder for providers to keep their doors open, retain qualified staff or acquire the supplies necessary to promote children’s learning.
“Failing to compensate providers sufficiently has negative consequences for children, parents and providers,” said Helen Blank, NWLC Director of Leadership and Public Policy and co-author of the report. “Low-income children are denied critical early learning experiences. Parents find it difficult to access the child care they need to work. And providers, who are often low-income women themselves, face earning less or going out of business.”
In the three other policy areas, states made small steps forward during the past year, but in most cases states are behind where they were in 2001.
Income Eligibility
A family’s ability to obtain child care assistance depends on a state’s income eligibility limits, including whether a state makes annual adjustments to eligibility limits for inflation so that families do not become ineligible for assistance simply because of small pay increases that barely cover the rising cost of basic living expenses.
In the majority of communities across the country, a family needs an income equal to at least 200 percent of poverty to meet its basic needs, such as housing and food and other necessities. Although all states set income eligibility for child care assistance above 100 percent of the federal poverty level ($17,170 a year for a family of three) in 2007, families with income above 150 percent of poverty ($25,755 for a family of three) could not qualify for assistance in more than one-quarter of the states, and families with income above 200 percent of poverty ($34,340 for a family of three) could not qualify for assistance in more than two-thirds of the states.
In 18 states, income eligibility did not keep pace with inflation as measured against the increase in the federal poverty level between 2006 and 2007. And in 33 states, income eligibility failed to keep pace with inflation between 2001 and 2007.
Waiting lists
In 2007, two-thirds of the states avoided placing families on waiting lists for child care assistance. Yet the remaining one-third of the states had at least some families applying for assistance who were placed on waiting lists or who were turned away. This was an improvement over the number of states with waiting lists in 2006 and 2001.
Copayments
Copayment policies are important: If copayments are too high, families may have difficulty covering the copayment or may be discouraged from participating in the child care assistance program.
In more than one-third of the states, a family at 100 percent of poverty was required to pay more in copayments as a percentage of its income in 2007 than the nationwide average amount spent on child care, slightly less than 7 percent of income. A family at 150 percent of poverty was required to pay more than 7 percent of income in about two-thirds of the states in which a family at this income level was eligible for assistance.
From 2006 to 2007, copayments increased as a percentage of income in 15 states for families at 100 percent of poverty. Comparing 2007 to 2001, however, shows a bleaker picture. In 30 states, copayments increased as a percentage of income for a family at 100 percent of poverty.
“High-quality child care not only helps parents work and support their families, it ensures that young children receive the early learning experiences they need to start school ready to succeed and that older children have nurturing places to go after school,” Blank said.
Karen Schulman, NWLC Senior Policy Analyst, and Helen Blank, NWLC Director of Leadership and Public Policy, are co-authors of the NWLC analysis, State Child Care Assistance Policies 2007: Some Steps Forward, More Progress Needed.
To view the analysis, visit: http://www.nwlc.org/pdf/StateChildCareAssistancePoliciesReport07Web.pdf
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