It’s time to put child care subsidy on the radar. Officially known as child care assistance for working families through the Department of Social Services, Virginia has over $180 million that can be used as financial assistance to help low-income, working families attain high-quality child care. One year ago, Congress approved the largest increase ever to subsidized child care bringing over $40 million more to Virginia’s child care system. Why haven’t you heard more about this? Because child care subsidy is under the radar — it’s time to change that.
One way to ensure that subsidy is on the radar is for advocates to ask more questions: What purposes can subsidy be used? Are enough families in my community benefiting? Are we incentivizing families to choose high-quality child care? To answer these questions we need to know more about how child care subsidy is currently being used. Over the last four years the number of children receiving child care subsidy has declined by one-third. Before Congress approved the $40 million increase, reimbursement rates for providers were low and not always worth the paperwork and additional financial management. However, since June 2018 the state increased reimbursement rates significantly; they now are equivalent rates to 70 percent of licensed care in a locality. Additionally, assistance is now offered for 12 months and beyond as assistance gradually phases out while a family’s income increases.
|End of SFY 2015||End of SFY 2018||Change FY15 to FY18|
With increased reimbursement rates and a longer eligibility time frame you would think subsidy would start to blink its way on to the radar, but that has not necessarily been the case. Since rates increased last June, the number of children participating in child care subsidy six months later only increased two percent. While this is a step in the right direction, we need to make more significant progress to fully benefit from the additional federal dollars and ensure we use these resources to help patch together a system of high-quality early learning for all kids in Virginia.
Virginia has not marketed this rate increase and eligibility change to families and child care providers. The state should create a marketing strategy to promote the increased rates and longer eligibility periods. To ensure the success of this promotion and identify when additional efforts are needed to increase participation, the state should set a goal to increase the number of children receiving subsidy by 10 percent each year.
The state has also not addressed a significant barrier to participation that has likely contributed to the decline in children served. In the spring of 2016, VDSS put into place a policy requiring families to comply with the formal child support enforcement process to receive child care assistance. Before this requirement, parents could describe their informal arrangements in the calculation for their eligibility. This change turned away many people who wanted to maintain stable, albeit informal, relationships with the non-custodial parent and wanted to avoid the potentially punitive formal system. Voices encourages the Department of Social Services to take every step within the law to reverse this course.
Putting child care subsidy on the radar will take several important steps. With the additional federal resources these steps are more a challenge of implementation than the need for additional resources. To fully maximize child care subsidy the Department of Social Services should consider: