In Focus: Child Care Subsidies

Mar 24, 2015  |  PERMALINK »

Five out of Six Eligible Children Unable to Access Child Care Assistance

By Christina Walker 

Child care assistance helps low-income families obtain the child care they need so parents can go to work or school. The Child Care and Development Block Grant (CCDBG) is the primary federal program that funds child care subsidies for low-income, working parents. States also direct funds from the federal Temporary Assistance for Needy Families (TANF) block grant to child care, although those funds have declined significantly in recent years. Research has shown that subsidies provide stability for families struggling to gain economic security while allowing families to access higher-quality child care than they could otherwise afford.

A new issue brief released by The Office of the Assistant Secretary for Planning and Evaluation (ASPE) at the U.S. Department of Health and Human Services recently updated estimates of the share of eligible children served by all funding sources, including CCDBG and TANF. In 2011, only 17 percent—or one in six children—eligible under federal rules actually received any help, leaving five in six children without any assistance. When compared to ASPE’s prior estimate in 2009, the share of eligible children receiving child care assistance declined about 1.5 percent: 100,000 fewer children overall received assistance, even though the number of eligible children increased by nearly 500,000. 

This report highlights the worsening trend in the number of children receiving child care assistance. In 2013, only 1.46 million children received CCDBG-funded subsidies (including TANF transfers to CCDBG) in an average month, which is the lowest number of children served in 15 years. Spending on child care assistance has simultaneously been on the decline, reaching its lowest level since 2002.

From 2011 to 2013, more than 168,000 children lost assistance through CCDBG funds – a 10 percent decrease, suggesting that future analyses may show an even smaller share of eligible children receiving subsidies. This decline comes at a time when states are just beginning to understand and address the increased costs of implementing new requirements included in the 2014 CCDBG reauthorization. Increasing investment in child care assistance should be a top priority for federal and state policymakers to support the costs of reauthorization and stem the tide on the declining number of children getting help. CCDBG is an important investment that helps families gain employment stability and economic security and promotes continuity in child care arrangements that benefits children’s development.

Mar 18, 2015  |  PERMALINK »

Extended State Plan Timeline Allows States to Create Their Best Child Care Subsidy Systems

By Christine Johnson-Staub and Hannah Matthews

The federal Office of Child Care recently extended the submission deadline from July 2015 to March 2016 for Child Care and Development Fund (CCDF) State Plans for FY 2016-2018. This is the submission in which states will be expected to outline their implementation plans for the major changes in policy included in the Child Care and Development Block Grant Reauthorization passed last fall. The new law requires states to make significant changes in access and continuity to child care assistance, child health and safety, and program quality. 

This extension should be seen as welcome news—not only to state administrators who were busily working to submit State Plans in a very short period of time, but also to all who are committed to a successful CCDBG Reauthorization.

The CCDBG Reauthorization is challenging in many respects, particularly the significant resources needed to meet new requirements. The Reauthorization is also an important opportunity to consider large-scale changes to not only comply with CCDBG Reauthorization requirements, but to design a child care system that meets the needs of children and families in the state.  Taking full advantage of the opportunities offered by CCDBG Reauthorization requires sufficient planning time.

Read more here>>

Feb 3, 2015  |  PERMALINK »

President Proposes Historic Child Care and Early Education Investments

By Stephanie Schmit and Hannah Matthews

President Obama’s FY 2016 budget proposal, released yesterday, offers a bold vision for child care and early education in America. His budget would make a landmark, ongoing investment in a continuum of child care and early education services for children from birth through school entry to better prepare them for success in school and to ensure that low- and middle-income working families can afford to go to work knowing their children are safe and well cared for.

Key investments in the budget proposal include:

Child Care. The president’s proposal includes a major expansion in child care assistance for low-income families through both mandatory and discretionary funding for the Child Care and Development Block Grant (CCDBG). Specifically: 

  • An increase of $3.7 billion in mandatory funding for child care assistance in FY 2016, which is the first installment of investments totaling $82 billion over 10 years, to guarantee access to quality, affordable child care for children under age 4 in low-income families (under 200 percent of poverty). This expansion in mandatory funding would be financed by reforms to the tax code that would increase taxes on the wealthy and close corporate tax loopholes. By 2025, more than 1.1 million additional children under age four would have access to high-quality child care.
  • A $370 million increase in discretionary funding (the funding set each year in the annual appropriations measure) including $266 million to help states implement new provisions in the bipartisan Child Care and Development Block Grant Act of 2014, $4 million for research and evaluation, and $100 million for pilots to develop, implement, and evaluate new, innovative models of providing child care.
  • An expansion of the Child and Dependent Care Tax Credit (CDCTC) for families with children under age five. The Budget triples the maximum credit available for families to $3,000 per child and makes the full CDCTC available to families with incomes of up to $120,000.

Head Start and Early Head Start. The budget proposal includes a $1.1 billion increase to expand Head Start programs to meet the full-day and full-year needs of families. This increase includes a $150 million increase for Early Head Start-Child Care Partnerships to invest in high-quality infant and toddler care, a $284 million investment for cost of living adjustments, and $25 million for activities associated with Designation Renewal System, or recompetition process.

Home Visiting and Preschool. The budget proposal includes $75 billion to support the Preschool for All initiative, including $15 billion over 10 years for evidence-based home visiting. The Preschool for All initiative would provide all four-year-olds from low-income families with access to high-quality preschool. The Preschool for All proposal is funded with an increased tobacco tax. In FY 2016, the budget proposes a $500 million increase for Preschool Development Grants, expanding them to over 40 states.

The president’s budget proposal reflects up-to-date understanding of who families are today and what is holding them back. It puts child care needs, and other supports for working families, front and center—firmly grounded in the research on how to help families get ahead and what is important for young children’s success. The president’s budget proposal outlines the Administration’s vision for federal spending and revenue. In the coming weeks, Congress will have an opportunity to lay out its vision. We encourage Congress to advance a budget that increases investments in child care and early education given the broad—and bipartisan--consensus of the importance of early childhood experiences.

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