October 27, 2016
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States Remain Committed To Low-Income Kids

 WASHINGTON - Despite steep cuts in state budgets in the last year, most states were able to maintain child care policies that are critical to ensuring low-income familiesÂ’ access to child care assistance, largely because of federal funding from the American Recovery and Reinvestment Act (ARRA), according to a study of child care policies in 50 states and the District of Columbia released today by the National WomenÂ’s Law Center (NWLC). 

 Â“Child care is not a luxury item,” said NWLC Co-President Nancy Duff Campbell.  Â“It is a basic that families cannot do without, especially in a recession, when so many parents are making tough trade-offs. Child care assistance is a critical lifeline to parents trying to find or keep a job and to childrenÂ’s stability in a volatile time.

“Most states still fall short in their child care policies,” she said. “ThatÂ’s why itÂ’s imperative that we continue the investments necessary to ensure that these programs not only survive, but improve.” 

NWLCÂ’s report, State Child Care Assistance Policies 2010: New Federal Funds Help States Weather the Storm, analyzes changes in five key policy areas: income eligibility limits to qualify for child care assistance, waiting lists for assistance, co-payments required of parents receiving assistance, reimbursement rates for child care providers serving families receiving assistance, and eligibility for parents searching for a job. Although most state policies are holding steady compared to a year ago, they have not improved or are behind where they were in 2001.

The report reveals that the overall outlook would have been far bleaker in 2009-2010 without the boost of $2 billion in child care funds provided by ARRA, which helped states provide child care assistance to low-income families and engage in activities to improve the quality of care. The report also documents that several states facing current budget shortfalls will be forced to make cuts in their child care programs in the near future as their ARRA funds are drained and if no additional funds are provided.

Income Eligibility: 

A familyÂ’s ability to obtain child care assistance depends on a stateÂ’s income eligibility limit.  Thirty-two states increased their income limits to keep pace with inflation, and six states increased their limits beyond what was necessary to keep pace with inflation between 2009 and 2010.  But even with this increase in income limits, a family with an income above 200 percent of poverty ($36,620 a year for a family of three in 2010) could not qualify for assistance in thirty-five states.  And in twenty-one states, the income limits in 2010 were lower as a percentage of the federal poverty level than in 2001.

Waiting Lists:

Some families who are eligible for child care assistance may never receive it. For some, the wait for child care assistance continues for several months or longer, while others remain stuck on the list and never receive assistance.

Nineteen states had waiting lists in 2010, the same number as in 2009. This represents a slight decrease compared to twenty-one states with waiting lists in 2001.


Parent co-payment levels reveal whether low-income parents receiving child care assistance are left with significant out-of-pocket costs for care.  Most states require families to contribute to their child care costs based on a sliding fee scale that is designed to charge progressively higher co-payments to families at progressively higher income levels. 

In about one-third of the states, families paid a lower percentage of their income in co-payments in 2010 than in 2009.  In most of the remaining states, co-payments remained the same in 2010 as in 2009.  But co-payments were still higher as a percentage of family income in 2010 than in 2001 in one-third to nearly half of the states, depending on income.   

Reimbursement Rates:   

States determine reimbursement rates for child care providers who care for children receiving child care assistance.  States set a maximum level up to which they will reimburse providers.  Reimbursement rates may vary by geographic region, age of the child, type of care and other factors.  Rates affect the resources child care providers have to maintain their businesses, pay salaries to attract and retain staff, keep their child-staff ratios low, and support facilities, materials, and supplies for activities that promote childrenÂ’s learning.  When reimbursement rates are low, child care providers lack the resources they need to offer high-quality care and some providers may stop serving families who receive child care assistance.

Only six states had reimbursement rates for child care providers at the federally recommended level in 2010.  This was lower than the number of states with reimbursement rates at the recommended level in 2009—nine—and significantly lower than the number of states with reimbursement rates at the recommended level in 2001—twenty-two.

About three-fifths of the states had higher reimbursement rates for higher-quality providers in 2010, but in nearly two-thirds of these states, even the higher rates were below the federally recommended level.  

“Keeping reimbursement rates at recommended levels is crucial for low-income families who want good-quality care for their children,” said Helen Blank, NWLC Director of Leadership and Public Policy. “When rates fall short, it places a tremendous burden on low-income families who simply donÂ’t have the funds to make up the difference.  And it deprives child care providers trying to serve low-income families of the resources they need to offer high-quality care that can give children the strong start they need to succeed in school.”

Eligibility for Parents Searching for a Job:

Child care assistance provided to parents searching for work helps them hold onto child care until they find a new job.  It eases the demands and stress of any job search. It also increases the odds of a smooth transition from unemployment into a new job for the parent and the child, who are both benefitting from the continuity of child care.

Forty-seven states allow families receiving child care assistance to continue receiving it while a parent searches for a job.  Yet only eighteen states allow families to qualify for and begin receiving child care assistance while a parent is searching for work.  Four states do not allow families receiving child care assistance to continue receiving it while a parent searches for a job.

 Â“The current fiscal crisis puts child care for low-income families at risk, precisely when families and children need it most,” said Campbell. “When Members of Congress return to work after the election, itÂ’s important that they turn their focus to child care and make it a top priority. ItÂ’s time for both the House and Senate to commit the necessary financial resources to ensure that families do not lose the child care help they need to get and keep a job. Families and children canÂ’t wait any longer.”


The National Women's Law Center is a non-profit organization that has been working since 1972 to advance and protect women's legal rights. The Center focuses on major policy areas of importance to women and their families including economic security, education, employment and health, with special attention given to the concerns of low-income women. 


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