Child Care and Development Fund, Report to Congress for Fiscal Years 2004 and 2005
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ADMINISTRATION
States and Territories indicate that CCDF Lead Agencies are working in partnership with multiple Federal, State, Tribal, and local entities to administer CCDF funds. Many Lead Agencies directly administer funds for child care services through child care certificates, vouchers, or contracting with child care programs to serve families that are eligible for child care assistance. However, all of the Lead Agencies contract with at least one other entity to assist them in administering funds to improve the quality and availability of child care.
In many cases, States and Territories devolved substantial administrative responsibility for CCDF to local jurisdictions, such as counties or nongovernmental entities created by statute. Six States reported that the Lead Agency directly administers and implements all services, programs, and activities funded by CCDF (down from nine States in the FY 2002–2003 Plan Period).
Thirteen States indicate that they use private, donated funds to meet part of their CCDF matching requirement (up from five States in the FY 2002–2003 Plan Period). Nineteen States used expenditures on prekindergarten programs to meet their CCDF matching requirement, their CCDF maintenance-of-effort (MOE) requirement, or both.
State Flexibility
States have significant flexibility in administering and funding child care assistance programs under CCDF. Forty-five States set income eligibility limits for CCDF assistance that were below the Federal maximum of 85 percent of State Median Income (SMI). Twenty-seven States and four Territories established additional eligibility conditions or priority rules and/or have rules that vary in different parts of the State or Territory. Seven States used a two-tiered eligibility threshold to allow families to retain subsidies even when their income increases. For instance, in Massachusetts, a family must have an income at or below 50 percent of the SMI in order to access the subsidized child care system; however, once that family has a subsidy, they remain eligible until their income reaches 85 percent of SMI. For a family in Massachusetts who has a child with a documented disability, the initial income eligibility level of that child or any other child in that family is 85 percent of SMI.
Eligibility
In the FY 2004–2005 CCDF Plans, maximum family income eligibility levels across States ranged from 28 to 85 percent of the SMI. While four States and five Territories reported they set the income eligibility ceiling at 85 percent of the SMI, the Federal maximum, most set eligibility at a lower level in order to prioritize families with very low incomes. On average, States reported an income eligibility level equivalent to 59 percent of SMI (down from 62 in the FY 2002–2003 Plan Period). Twenty-six States reported income eligibility ceilings that were lower than those reported in the FY 2002–2003 Plan Period, 12 States were higher, and 13 States remained unchanged.
Most States use pretax gross income, usually expressed in monthly terms, to determine if a family is eligible to receive child care assistance. However, some States exclude or exempt certain income, or allow deductions to income for certain expenses. Most commonly, States exclude or exempt income received from certain public assistance programs such as TANF, Supplemental Security Income, food stamps, energy assistance, and housing allotments.
Priorities
States determined whether to target certain populations or to treat all families the same regardless of welfare receipt status or history. Most States either served all those eligible or gave priority to families currently receiving, at risk of receiving, or transitioning off TANF, first priority. Fifteen States and three Territories indicated that first priority was given to families that include a child with special needs, as defined by the States and Territories (up from 11 States in the FY 2002–2003 Plan Period). Other States gave priority to teen parents, non-TANF teen parents and children in protective services or foster care.
North Carolina allowed counties to establish their own priorities but required them to set aside part of their allocation for children with special needs. Most counties also gave priority to families who were working, particularly TANF recipients who were working or in training.
Family Contributions to the Cost of Care
States are required to establish a sliding-fee scale, based on income and family size, whereby families receiving services through CCDF contribute to the cost of care. Some States use other factors including the price of care, the State reimbursement rate, or both, in determining the amount of copayments. In the FY 2004–2005 CCDF Plans, approximately 82 percent of States indicated that copayments were based on a percentage of family income. Of these States, copayments also were based on other factors, such as number of children receiving care, the cost of care, and whether care is full- or part-time.
States may choose to waive copayments for families with income below the Federal Poverty Level (FPL). Two States required all families to pay a fee (down from five in the FY 2002–2003 Plan Period). Eleven States waived fees for all families with income at or below FPL (down from 12 in the FY 2002–2003 Plan Period). Thirty-nine States waive fees for some families with incomes at or below FPL (up from 33 in the FY 2002–2003 Plan Period). (Refer to Figure 4.1.)
*Includes the District of Columbia and Puerto Rico.
In addition to assessed family copayments, many States allow providers to charge families the difference between their standard rates for all families and what the State reimburses. Seventeen States reported that they prohibit providers from charging fees in addition to the copayments established by the State (up from 14 in the FY 2002–2003 Plan Period). Six additional States reported that they prohibit some, but not all providers from charging families fees in addition to the established copayments. Of the States that have prohibitions against additional charges, many said providers may charge fees such as late charges or costs related to registration, transportation, and field trips. For example, Kansas providers signed an agreement indicating they may not charge parents the difference between the reimbursement rate and the private pay rate. However, Federal rules give States the option of allowing providers to assess extra charges for transportation, overtime, late fees, holidays, and extra absent days (time) if the provider’s policy is to charge the private sector the extra charges.