New Report Shows Families Losing Ground Under Child Care Assistance Policies

Child care assistance helps low-income families afford the reliable, good-quality child care that enables parents to work, gives children the good start they need to succeed, and, as a result, supports a strong workforce necessary for the nation’s current and future prosperity. Yet, families in many states are growing less likely to receive the child care assistance they need, according to a report released today by the National Women’s Law Center.

Families in thirty-seven states are worse off under one or more key child care assistance policies in February 2011 than they were in February 2010, and better off in only eleven states, according to the report, State Child Care Assistance Policies 2011: Reduced Support for Families in Challenging Times. The policies covered are critical ones in determining whether families receive assistance and the extent of help they receive — income eligibility limits to qualify for child care assistance, waiting lists for child care assistance, copayments required of parents receiving child care assistance, reimbursement rates for child care providers serving families receiving child care assistance, and eligibility for child care assistance for parents searching for a job. 

The trend in state child care assistance policies between February 2010 and February 2011 contrasts with that between February 2009 and February 2010. Families in only fifteen states were worse off in 2010 than they were in 2009 under one or more of the policies covered in this report and families in thirty-four states were better off under one or more policies. Families made progress under these child care assistance policies between February 2009 and February 2010, despite strains on state budgets, in large part due to $2 billion in additional funding for the Child Care and Development Block Grant (CCDBG) for FY 2009 and FY 2010 provided by the American Recovery and Reinvestment Act (ARRA). The negative trends since February 2010 are likely due in part to the exhaustion of these funds. The funding level for CCDBG in the FY 2011 appropriations bill replaced only a small portion of the expiring ARRA funds.

In February 2011, many low-income families could not qualify for child care assistance under state income eligibility criteria. A family with an income above 150 percent of poverty ($27,795 a year for a family of three in 2011) could not qualify for child care assistance in thirteen states, and a family with an income above 200 percent of poverty ($37,060 a year for a family of three in 2011) could not qualify for assistance in thirty-five states.

Even families who are eligible for child care assistance may not receive it. Twenty-two states had waiting lists for child care assistance or turned away eligible families without adding their names to a waiting list in 2011, compared to nineteen states in 2010. Families on waiting lists often struggle to pay for stable, good-quality child care on their own along with other basic expenses, or use low-cost — and frequently low-quality — care because they cannot afford better-quality care, or may not be able to pay for child care at all, making it difficult or impossible for parents to hold onto employment.

Families receiving child care assistance may still have difficulties accessing high-quality care due to low state reimbursement rates paid to child care providers. Just three states had reimbursement rates for child care providers at the federally recommended level in 2011, compared to six states in 2010 and twenty-two in 2001. Low rates undermine providers’ ability to maintain their business, attract and retain qualified staff, and provide the equipment and materials that children need. When reimbursement rates fall short, providers operate without the necessary resources to offer high-quality care, and some providers may decide to stop serving families who receive child care assistance.

Child care assistance is an essential support for families, particularly in today’s economy. Yet the setbacks for families needing child care assistance are likely to continue due to stagnant or reduced child care funding at the federal and state level. This failure to make sufficient investments in child care will have negative consequences for children, families, and our country.