The first in a three-part series about state child care subsidy policies from the CCDF Policies Database. Tomorrow: Assistance for Unemployed Parents Searching for Jobs
The high cost of child care can be a significant obstacle to finding and keeping a job, especially for low-income parents. Child care subsidies can help low-wage parents pay for high-quality care, allowing them to continue working or looking for work, but whether subsidies are available and how much support they provide depends in part on which state families call home.
The Child Care and Development Fund (CCDF) provides federal block grant money to the states, territories, and tribes to subsidize child care costs for low-income families. In 2010, 1.7 million children received child care subsidized through CCDF, according to the most recent preliminary data from the Administration for Children and Families. CCDF is federally funded, but a family’s eligibility depends largely on state-specific rules. These state rules can have a significant impact on families, determining whether they qualify for any assistance, and if so, how much assistance they receive.
The federal guidelines for CCDF require that families have income below 85 percent of the state median income, have children who are under age 13 or who have special needs, and meet one of the defined reasons for needing care. Within these guidelines, states have substantial leeway to establish their own policies for determining eligibility, and state policies vary widely.
A key example is the wide range of state income eligibility limits, or the maximum amount of income a family can have and qualify for child care assistance. In 2011, the maximum allowable income for a family of three to qualify initially for CCDF subsidies ranged from $1,854 to $4,524 per month (35 to 81 percent of state median income). In 17 states, families already receiving a subsidy could have somewhat higher income and still retain subsidies. These “continuing eligibility” thresholds ranged from $185 to $2,451 higher than the initial eligibility thresholds for a family of three.
It is important to look at income limits in relation to a state’s other policies. A state with higher income limits is not necessarily serving a larger proportion of families. For example, the state could have stricter work requirements or limited funds that affect the number of families that can be served. Alternatively, the state may be serving more families, but requiring those families to pay a greater portion of child care costs. In the next two posts, we’ll look at how other childcare subsidy policies vary across states.