Changes to child care subsidy eligibility affect low-income parents

DSC_0035_0070The Child Care Subsidy Program promotes opportunity and success for working parents and their children. The program provides income eligible parents that are working or in school/college a voucher to cover part of the cost of licensed early childhood, preschool, and after school learning and care programs. This helps lower-wage working parents stay in the workforce and simultaneously provides high quality, dependable care and learning environments for their kids. That’s a formula for family and child success!

The cost of quality care and learning centers can be $7,000 – $10,000 per year for a child. The voucher helps parents meet that expense. By using the program, children are in safe, quality settings that parents might otherwise not be able to afford.

Without vouchers, many working parents must make difficult choices between work, unemployment, leaving their children in less than ideal arrangements, or paying for care but then not being able to meet other expenses like housing, utilities, transportation, and food.

Changes to the System

Recently, the North Carolina legislature changed the way the state determines eligibility for child care subsidies, and thousands of low-income families across North Carolina, especially those with school-age children, are having to make those difficult choices. The funding for nearly 12,000 school-age children will be removed, according to the Fiscal Research Division

Under the old system, all children under 13 qualified if their parents earned less than 75 percent of the state median income or about $50,244 for a family of four.

The new program is now tied to the federal poverty level, so now a family of four with children under the age of six can’t make more than $47,700.

It’s even stricter for children ages six to 12, or school-age children. The income for a family of four can’t exceed $31,721, which breaks down to about $2,643 a month before taxes.

The state budget also increased the co-pay families need to contribute to receive the subsidy to 10 percent of their monthly income.

Single Mother Scenario

Imagine a single mother with one child. She works full time making $2,300 a month before taxes. The eligibility for child care subsidy for a family of two is cut-off at a monthly salary of $1,743 so she has to pay the full costs of child care for her 6 year-old.

The cost of her child care amounts to $592 a month, which is the standard cost for a 4 to 5 star rated center, and is equal to 25% of her total monthly income before taxes. After paying rent, utilities, food, car payment and other expenses, she has nothing left over.

Child care and rent take up the majority of her income, leaving her without a safety net, savings or an emergency fund. This leaves her family vulnerable to unexpected expenses that could catapult them into utility disconnection, food insecurity or even homelessness. Her risks of moving into poverty have increased.

The Reality for Many Families

This scenario is a reality for many working single mothers living in Asheville. The YWCA of Asheville’s School-Age after-school program serves children ages kindergarten through 6th grade. With the recent changes to NC child care subsidy eligibility, child care fees doubled for most families with children enrolled in this program and as of January 1, 2015, the changes in income eligibility totally eliminated subsidies for many families.

“My daughter and I had increased housing costs and health care costs, and a number of other financial expenditures that are a burden as the only income earner in our family,” says Elena, who works at an outpatient mental health clinic and has her 8 year-old enrolled in the YWCA school-age program. “In January, when I lose my subsidy, I will need to take on more work, or find another job, or begin sending my daughter home as a ‘latch key kid’ at 8 years old.”

Jasmine, who works in the medical industry, says “I am a hard working mother who has had vouchers (child care subsidy) since my oldest was born and I have been able to work my way up. With my vouchers being taken away, I could go backwards. This choice of the legislature is going to have more families in poverty, and more children could be neglected because they might be left at home or somewhere where it is not safe.”

Access to affordable, high-quality early childhood care and learning expands opportunities for parents and children. By making investments in child care subsidy, the NC Pre-K program, Smart Start, and Head Start, we promote thriving children, as well as a thriving community.

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This story is part of a series collected by The Success Equation. Under the umbrella of Children First/CIS, the Success Equation is an initiative that unites community to reduce and prevent the root causes of poverty so all children can thrive. Get involved! Learn about action steps, volunteer opportunities, and help share these messages by going to www.facebook.com/SuccessEquation. To find more, go to www.successequation.org.