Childcare Subsidy to Provide Relief for Families
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Skyler Moore
March 18, 2024
Many families in the United States experience challenges earning sufficient incomes, while attempting to meet the demands of rising child care expenses coupled with high child care worker turnover. These are challenges many families face on a day to day basis, particularly those who are from disadvantaged backgrounds and a part of underserved communities.
In April 2023, President Joe Biden signed the Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers, which may provide relief and solutions for the families facing the many issues associated with obtaining quality, reliable child care.
On February 29, 2024, the U.S. Department of Health and Human Services, Administration of Children and Families (ACF) announced a new rule to the April 2023 child care legislation, which will provide relief to thousands of families including low-income families with household incomes at or below 150 percent of the federal poverty level. This final rule increases payments for child care providers, reduces costs for families, expands child care provider choices for families and reduces much of the bureaucracy associated with governmental programs.
Eligible families with household incomes at or below 150 percent of the federal poverty level and families who have a child with a disability may be exempt from co-pays, while eligible families above 150 percent of the federal poverty level will have their co-pays capped at 7 percent of their monthly income. This child care legislation may have a significant impact on families’ household incomes by allowing economically disadvantaged families to maintain more of their earned income by reducing their costs associated with daily living.
The U.S. Department of Labor, Women’s Bureau estimates the median annual cost associated with caring for one child ranges from $5,357 for children who are school-aged and receive home-based care in small counties, to $15,417 for infants who receive center-based care in large counties. These expenses represent between 8 percent and 19.3 percent of a family’s median income for each child. Child care costs have risen by approximately 26 percent in recent years.
To meet the demand of rising costs and stagnant wages, one of the most significant child care funding mechanisms, the Child Care and Development Fund, has undergone many changes and updates to better assist families with addressing their child care costs by paying more for child care through the new rule introduced by ACF.
In recent years, approximately 20 percent of the child care workforce has experienced turnover on a year-to-year basis and still has not returned to pre-pandemic levels. The child care workforce remains 8 percent smaller than it was prior to the COVID-19 pandemic and lack of availability is exacerbated by high turnover in the child care. Child care centers serving children from birth to age five experienced higher rates of staff turnover, in comparison to the child care centers serving children from age three to age five. Low-wages for child care workers is a major factor to high turnover. The average hourly pay for the child care centers experiencing high child care worker turnover is $11.91. High child care worker turnover is considered turnover of 20 percent or more. African American child care workers were disproportionately affected by lower wages. Higher wages were associated with lower turnover.
The new rule to the April 2023 Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers requires states to disburse timely payments to child care providers and develop more efficient processes to cover the cost of providing child care. Child care providers will also be able to participate in the Child Care and Development Fund and ideally improve operations and employee turnover.
This legislation is expected to have a significant impact on many underserved families throughout the United States. The U.S. Department of Health and Human Services estimates approximately 100,000 children will benefit by having the cost of their child care reduced or eliminated. Although, the Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers will not solve the child care issue in the United States. It is a major step in the right direction.
Author: Dr. Skyler Moore can be reached at [email protected].
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Childcare Subsidy to Provide Relief for Families
The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.
By Skyler Moore
March 18, 2024
Many families in the United States experience challenges earning sufficient incomes, while attempting to meet the demands of rising child care expenses coupled with high child care worker turnover. These are challenges many families face on a day to day basis, particularly those who are from disadvantaged backgrounds and a part of underserved communities.
In April 2023, President Joe Biden signed the Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers, which may provide relief and solutions for the families facing the many issues associated with obtaining quality, reliable child care.
On February 29, 2024, the U.S. Department of Health and Human Services, Administration of Children and Families (ACF) announced a new rule to the April 2023 child care legislation, which will provide relief to thousands of families including low-income families with household incomes at or below 150 percent of the federal poverty level. This final rule increases payments for child care providers, reduces costs for families, expands child care provider choices for families and reduces much of the bureaucracy associated with governmental programs.
Eligible families with household incomes at or below 150 percent of the federal poverty level and families who have a child with a disability may be exempt from co-pays, while eligible families above 150 percent of the federal poverty level will have their co-pays capped at 7 percent of their monthly income. This child care legislation may have a significant impact on families’ household incomes by allowing economically disadvantaged families to maintain more of their earned income by reducing their costs associated with daily living.
The U.S. Department of Labor, Women’s Bureau estimates the median annual cost associated with caring for one child ranges from $5,357 for children who are school-aged and receive home-based care in small counties, to $15,417 for infants who receive center-based care in large counties. These expenses represent between 8 percent and 19.3 percent of a family’s median income for each child. Child care costs have risen by approximately 26 percent in recent years.
To meet the demand of rising costs and stagnant wages, one of the most significant child care funding mechanisms, the Child Care and Development Fund, has undergone many changes and updates to better assist families with addressing their child care costs by paying more for child care through the new rule introduced by ACF.
In recent years, approximately 20 percent of the child care workforce has experienced turnover on a year-to-year basis and still has not returned to pre-pandemic levels. The child care workforce remains 8 percent smaller than it was prior to the COVID-19 pandemic and lack of availability is exacerbated by high turnover in the child care. Child care centers serving children from birth to age five experienced higher rates of staff turnover, in comparison to the child care centers serving children from age three to age five. Low-wages for child care workers is a major factor to high turnover. The average hourly pay for the child care centers experiencing high child care worker turnover is $11.91. High child care worker turnover is considered turnover of 20 percent or more. African American child care workers were disproportionately affected by lower wages. Higher wages were associated with lower turnover.
The new rule to the April 2023 Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers requires states to disburse timely payments to child care providers and develop more efficient processes to cover the cost of providing child care. Child care providers will also be able to participate in the Child Care and Development Fund and ideally improve operations and employee turnover.
This legislation is expected to have a significant impact on many underserved families throughout the United States. The U.S. Department of Health and Human Services estimates approximately 100,000 children will benefit by having the cost of their child care reduced or eliminated. Although, the Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers will not solve the child care issue in the United States. It is a major step in the right direction.
Author: Dr. Skyler Moore can be reached at [email protected].
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