State child care assistance policies greatly impact the choices working parents make for their children. These policies determine which families are eligible for child care assistance, at what levels providers will be reimbursed, and how high parental co-pays will be. “Pivot Point: State Child Care Assistance Policies 2013,” a new report from the National Women’s Law Center (NWLC), illuminates nationwide progress on these programs while also demonstrating the continued need for policies that benefit families, children, and child care providers.
The report offers plenty to celebrate in Connecticut. Unlike the nearly two-fifths of states that place some eligible families on waiting lists or turn eligible families away, our state has no waiting list for families eligible for child care assistance. Parental co-payments in Connecticut have also remained stable as a percentage of income since 2012, while close to one-fifth of states have seen co-pay increases.
However, the report also highlights three areas where Connecticut can improve its policies:
1. Provider Reimbursement Rates. According to federal recommendations, reimbursement rates should be set at the 75 percentile of the market rate. This threshold would allow parents receiving child care subsidies to choose among 75 percent of child care providers in their community. Not only is our state’s reimbursement rate in its Care4Kids subsidy program below this recommended level, but our rates were last updated in 2002. Connecticut currently sets reimbursement rates at the 60th percentile of the 2001 market rate, according to the Connecticut Department of Social Services Child Care and Development Fund plan. The NWLC reports that only three other states (Arizona, Idaho, and Kansas) and the District of Columbia have statewide reimbursement rates based on market data from 2001 or before.
Continuing to use this outdated market rate has the effect of limiting pay for child care providers who serve our state’s most vulnerable children. According to Connecticut DSS, in 2011 the standard state subsidies for infants and toddlers in family child care were at only the 20th percentile of the market rate, and subsidies for preschoolers were at just the 30th percentile of the market rate.
Reimbursement rates are a primary source of income for many providers, and low compensation can create financial hardship for caregivers. Low subsidy rates also can directly impact the quality of care children receive by limiting the resources available for program materials and improvements. Furthermore, inadequate reimbursement discourages providers from caring for the low-income children who receive child care subsidies.
2. Income Eligibility Limits. These limits determine which families are eligible to participate in the Care4Kids program and obtain child care subsidies. The NWLC reports that Connecticut’s income eligibility limit for new families applying for assistance is currently set at 50 percent of the state’s median income. Federal regulations allow Connecticut to provide assistance to families whose income is up to 85 percent of the state’s median income.
3. Eligibility for assistance while parents search for a job. According to the NWLC report, Connecticut is one of 45 states that allow parents to continue receiving child care assistance for some period of time after losing their job—in Connecticut, parents are eligible to receive assistance until the end of the following month. But Connecticut has not joined other states that allow parents who are searching for a job to apply for child care assistance. This step would give parents greater flexibility to enter the workforce, since they would have child care arrangements set by the time they located a position.
In May of this year, the federal administration that funds Connecticut’s child care assistance program released proposed changes to the terms of its grant. One of these changes would require all states to allow families to continue receiving child care benefits while they conduct some form of job search.
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Access to affordable, high quality child care is essential for parents, children, and employers. While Connecticut has made strides toward policies that support all children and families, there are still opportunities to improve our state programs. Increasing reimbursement rates, extending income eligibility for families seeking child care assistance, and incorporating a period of job search into Care4Kids eligibility would benefit children and families across the state.