Changes to child care subsidy eligibility may shut out some low-income families

kcanada@newsobserver.comJuly 9, 2014 

CHILDCARESUBS2-NE-070714-JEL

A 2-year-old rides a tricycle during playground time at Harps Mill Creative School in Raleigh.

JULI LEONARD — jleonard@newsobserver.com Buy Photo

  • Shifting support

    Who qualifies now

    Families whose household income is less than 75 percent of the state median income ($50,244 for a family of four) are eligible to receive child care subsidies for any child age 12 and under.

    Parents pay 8 to 10 percent of their monthly income (the amount varies depending on family size) to the child care provider and the state pays the provider the difference, though that amount can be lower than the center’s typical rate.

    What’s proposed

    Families with children under 6 would qualify for subsidies if their household income is less than 200 percent of the federal poverty level ($47,700 for a family of four).

    Families with children age 6 to 12 could qualify if their household income is less than 133 percent of the federal poverty level ($31,720 for a family of four).

    Other proposed changes

    The co-pay for child care subsidies would be 10 percent of the family’s monthly income regardless of family size.

    The proposed budgets would also do away with the current pro-rated co-payments for families whose children attend day care part time. Those parents also would be required to pay 10 percent of their monthly income.

    Other requirements

    In addition to meeting income requirements there are other qualifications for both parents and providers. Those do not change under the proposed budgets. Both parents must be employed, seeking employment or in school. Day care providers must have at least a 3-star rating from the N.C. Department of Social Services. The ratings are determined by the educational qualifications of the staff and the quality of the facility.

Close to 12,000 children, the vast majority between 6 and 12 years old, could lose their spots in after-school care once the state budget is finalized.

Both House and Senate members say they want to change the way the state determines who qualifies for child care subsidies as a way to ensure that the youngest children from poor families receive help.

Sen. Jeff Tarte, a Republican from Cornelius, said the goal is to shift the focus to early childhood development. He said research shows that children who receive high-quality care in their younger years have more academic success later in life.

Child advocates say the change could put children at risk by forcing parents to choose between work and leaving their children in potentially unsafe situations.

Currently all children under 13 years old whose parents earn less than 75 percent of the state median income – about $50,244 for a family of four – are eligible for a state subsidy.

The budget proposals would tie the subsidies to the federal poverty level, which is $23,850 for a family of four.

Under the new requirements, parents who have children younger than 6 would qualify for subsidies if they earn less than twice the federal poverty level.

If the children are 6 to 12 years old, the family’s income would have to be less than 133 percent of the federal poverty level, or about $31,720 for a family of four.

In addition, those parents who do qualify would have to pay a bit more. Currently the amount parents pay depends on the size of the family, and ranges from 8 to 10 percent of their monthly income. The proposals call for a co-pay that is 10 percent of monthly income, regardless of family size.

Rep. Justin Burr, an Albemarle Republican, said the change would help about 2,500 families who wouldn’t have qualified previously. Currently, 75,000 children benefit from the subsidy statewide.

“We’re targeting families at the lower end of the spectrum,” Burr said, adding that lawmakers want to make sure that children under age 5 are first in line for subsidized care.

The changes in the House and Senate budgets mirror one another, but the House plan would allow families that qualify now to keep their subsidies until the next recertification period, which occurs one year from the first time a family is determined eligible by the Department of Social Services. The Senate plan would take effect in September.

Long waiting list

Families who qualify for child care subsidies are often placed on a waiting list until funding becomes available from social services or another reimbursement entity. That usually happens when children age out of the program or when a family chooses to leave the waiting list.

In March, 15,939 families were on the waiting list, but that number has been as high as 50,000. The Senate anticipates that changing the eligibility rules will reduce the number of families on the waiting list by 3,200.

The change does not decrease the funding level, which will stay at $348 million, most of which is federal funds. The state provides 20 percent of the money.

Rob Thompson, a spokesman for child advocacy group N.C. Child, lamented the changes that would cut child care for so many families.

The legislature’s fiscal research division estimated 11,997 of the 110,000, or about 11 percent of children who qualified for the subsidy in 2013, would be excluded. Of those who don’t qualify, 82 percent would be 6 to 12 years old.

“This can put parents in a difficult predicament when it comes to their employment,” Thompson said. “The subsidy is about making sure low-income children have access to high-quality child care. That’s crucial when it comes to their future as children and adults.”

Difficult choices for parents

Maria Mendoza, a single parent and customer service representative in the Wake County Health Department, has three children who qualify for the subsidy and attend day care at Appletree Child Development Center, a four-star child care provider in Raleigh.

She pays $210 per month for her 3-year-old to attend day care and for her 6- and 9-year-olds to attend before and after school care. If the changes occur, she would have to pay $23 more per month for her youngest because of the increased co-pay and an additional $515 each for the two older children, which she said isn’t possible at her current pay.

“I would have to re-evaluate my entire economic situation,” Mendoza said.

Without any family members in the area who are able to watch her children while she works, Mendoza said her only options would be to quit her current job and work part time or stop sending her 9-year-old to day care altogether.

“If it came to that, I could see if she could get a bus stop close to home and have her carry Mace when she’s walking home,” she said.

Providers affected as well

Amanda Kowski, the director of Harps Mill Creative School, a 5-star day care center in Raleigh, said day care provides children with stability and crucial skills that working parents may not be able to offer consistently. Employees are trained to work with children and help with homework and other academic needs.

Kowski said she anticipates losing several families if the rules change.

“They can pay for child care or put food on their tables,” she said.

Other child care providers said awarding subsidies based on a child’s age is unreasonable.

“You need that developmentally appropriate environment to support the kids and support those families,” for both age groups, said Anna Carter, the president and CEO for Child Care Services Association, a nonprofit child care advocacy group in Chapel Hill. “It shouldn’t be an either-or.”

Sheila Hoyle, who oversees Southwest Child Development Commission in Jackson County, said child care providers would suffer as well.

“Most child care programs are very dependent on the resources that come in from the subsidized child care program,” Hoyle said.

If the eligibility rules change and fewer parents can afford child care, she said, some providers may have to limit their services or close completely.

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