Monday, May 9, 2011

Child Care Assistance Program

 Here is a paper one of my students wrote about child care subsidies in Illinois.  I've included some comments at the end of the paper.

Senate Bill 1236 was introduced by Senator Toi W. Hutchinson and it amends the Illinois Public Aid Code. This requires the Department of Human Services to establish a co-payment scale that provides for cost sharing by families that receive child care services. The co-payment will be based on family income and family size, and also based on other factors when appropriate. The co-payments can be waived for families whose incomes are at or below the federal poverty level. This will set new co-payment levels for families participating in the Child Care Assistance Program (CCAP)
The Illinois General Assembly understands the importance of child care for working families, and that child care is expensive for families with low income. The Department of Human Services provides child care support, but with rather than simply determining that a family does or does not get free childcare, a system of co-pays exists so that while childcare may be provided without cost to the poorest Illinois families who qualify, families with higher incomes and less need will pay a greater share of childcare costs, and the family co-payments increase as family incomes increase, until finally at some threshold the co-pay is so large that the child care support is simply no longer something the family qualifies to receive. the Illinois Department will cover child care costs for families in these categories: recipients of TANF who are participating in work and training activities, families transitioning from TANF to work, families at risk of becoming recipients of TANF, families with special needs, and working families with very low income. The department will look at families to see how whether they qualify, and to determine their co-pay based on their income and other factors.
The eligibility for child care benefits and amount of child care provided will vary based on family size, income, and other factors. To determine income eligibility for child care benefits, the department will annually, at the beginning of each fiscal year, establish one income threshold for each family size. This will be in relation to percentage of state median income for a family of that size, so that families with incomes below this line can have assistance and families with incomes above this line will be ineligible. Starting through and including fiscal year 2007, the specific threshold must be no less than 50% of the then current state median income for each family size.  In 2009 (the latest year for which we have data), the median income for four-person families in Illinois was $75,484, so the threshold for cutting off child care support would need to be higher than $37,742)  Beginning in fiscal year 2008, the specific threshold must be no less than 185% of the then current federal poverty level for each family size. In 2011, the poverty threshold for four-person families is $22,250, so the threshold for child care support for such a family needs to be over $41,162. Four-person families with incomes below this level would qualify for some child care assistance, although those near the threshold probably have co-pays that approach the cost of unsubsidized day care. The department will allow $7,500,000 annually for a test program for families who are income eligible for child care assistance, who are not recipients of TANF under Article IV, and who need child care assistance to participate in education and training activities.

According to the CCAP website, the following families may qualify for child care assistance:
  • ·       Those families where someone works and earns an income, but family incomes are low (presumably for a family of four, “low incomes” are incomes below $41,160, which is 185% of the Federal Poverty Line for such families.
  • ·       Families who receive TANF when the recipients are participating in their education and training and otherwise meeting their responsibilities.
  • ·       Teen parents who are seeking a high school degree or its equivalent.
  • ·       Families who are neither receiving TANF, nor earning incomes, but where the parent(s) is(are) pursuing additional education to improve their job opportunities.

Looking at the State Budget Book, I see that about 87,900 families receive help with child care.  (see Chapter 9, page 29 of the Executive Budget for Fiscal Year 2012).
This is a huge budget item, as over $600 million was spent on this in FY 2010, and $618 million is expected to be put into this in FY 2011.  The Executive budget was proposing a cut to $285 million on child care services in FY 2012.  If there is a cut of that magnitude, I don’t understand what this will mean to the nearly 90,000 families receiving this aid.  I’m also not clear on whether Senate Bill 1236 will even matter, if funding is cut so low.  Certainly something will have to be done to increase co-pays, lower the income threshold so that fewer families with incomes over $25,000 receive the assistance, or else just reduce what the state will pay for child care.   To put this in perspective, the Developmental Disabilities Services budget is only projected to be about $780,000 for FY 2012.  I would have expected the Developmental Disabilities budget to have been approximately twice as high as the child care subsidies budget (it will be more than that if the cuts proposed by Quinn in the executive budget actually take place), but in FY 2011 the child care services budget is 81% of the developmental disability services budget.

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