Public Assets Institute > Policy Areas > Family Economic Security > It’s summertime and livin’ with child care is a little easier

It’s summertime and livin’ with child care is a little easier

For all the fun of summer vacation—creemees, camping, swimming, and sun—it brings a host of challenges for Vermont families. With the end of the school year, working parents scramble to find and pay for childcare. And for families with children who aren’t yet school-age, it’s a year-round struggle.

But an increase in Child Care Financial Assistance Program (CCFAP) funding this summer will alleviate some of this financial stress. On July 21st the state will boost child care subsidies, providing more financial assistance for low-income families. 

This increase is long overdue. From 2010 to 2017, the average cost of care grew 35 percent for pre-school age children, while state reimbursement rates grew just 3 percent and have not changed since 2014.

To address this gap, the Legislature added $7.4 million to CCFAP this past session. It brings fiscal year 2020 state payments closer to market rates and increases the portion of the maximum subsidy families up to 300 percent of poverty ($63,990 annually for a family of three) can receive.1  In addition to making child care more affordable for families already in the program, the new rates intend to make it possible for additional families, who have not participated because of the high out-of-pocket costs, to opt in.

While the increase is a move in the right direction, child care assistance is still inadequate. Federal guidelines recommend that subsidies give low-income families access to 75 percent of the child care market. This would require a maximum subsidy of $250 a week per child, based on Vermont’s 2017 Market Rate Survey. The state’s new rates still fall short, paying a maximum of $215 for a 4-STAR preschool program and $230 for a 5-STAR.2

So child care still remains unaffordable for many families. Some providers, but not all, waive a family’s portion of the payment. A family up to 100 percent of poverty, such as a single mom on Reach Up, may still have to pay $35 out of pocket each week for a 4-STAR provider, about $150 per month per child. This is difficult with a maximum Reach Up benefit of $700 a month for a family of three. A single mom at 200 percent of poverty must pay about $600 per month for a 4-STAR provider, more than $7,000 annually per child. If she has two children needing care, this is over a third of the household income on childcare.

Recognizing the program’s limitations, Vermont’s Child Development Division has proposed a redesign with the goal of instituting a flat co-payment amount based on family size and income. This would help families access care regardless of the number of children in their family, making child care more affordable for many families. The Legislature’s appropriation includes $1 million for information system improvements needed to implement a new program design.

This is the kind of forward-thinking change families need to support the healthy growth of Vermont’s kids and to allow parents to enter the workforce. It would allow thousands of families to enjoy the pleasures of Vermont summers.

  1. Vermont’s fiscal year is from July 1st to June 30th. []
  2. Step Ahead Recognition System (STARS) levels are awarded when providers meet quality benchmarks. Financial assistance is higher for programs with more STARS. Providers can earn up to five STARs. []
Posted by Julie Lowell on July 18, 2019 at 11:29 am

Comments are closed.