November 19, 2014 – Today, President Obama signed the Child Care and Development Block Grant (CCDBG) Act of 2014 into law. First, I think it’s important for us to recognize that though the general population believes that Congress is broken, when something as important as the safety and well-being of our children are at-stake, our political leaders can come together in a bipartisan fashion to reauthorize a law that hadn’t seen Congressional action for nearly two decades. This is a huge win for Congress, for President Obama, and for working families across the nation who access high quality child care – particularly for low-income working families who rely on their state’s child care subsidy to ensure they can stay employed or in education programs to better the futures of their families. Child care assistance is clearly a two-generation strategy that helps parents and their children simultaneously, and I applaud Congress and the President for getting this done during challenging political times.
For Michigan, the reauthorized CCDBG law includes welcomed changes that will push our Child Development and Care program – Michigan’s child care subsidy system – to better serve struggling families. My latest Issues for Michigan’s Children brief highlights some of the policy changes included in the new law and what that means for Michigan. But in this blog, I want to focus on one of those changes – the 12 month eligibility rule.
Currently in Michigan, we evaluate families’ eligibility for the child care subsidy every 12 months but if families experience job loss or income changes, these must be reported to the state and families risk losing their child care subsidy at any point in time. The reauthorized law will require states to provide 12-months of continuous eligibility to families receiving the child care subsidy that would not result in fluctuations based on changes in parents’ work status or increases in family income. This is a welcomed shift to current policy that will have significant impact on families, child care providers, and the state.
First and foremost, low-income working families will greatly benefit from the CCDBG changes. Michigan’s income eligibility threshold for the child care subsidy is one of the lowest in the nation at 121% of the federal poverty level. That means a family of four has to make an annual income of $28,858 or less to be eligible for the lowest end of the subsidy (currently as low as $0.95 per hour). For a family whose income might shift slightly after being deemed eligible – say $30,000 after picking up a couple of temporary overtime shifts at work – would risk losing their subsidy and would have to re-apply when their income fluctuated again. Or if a family experienced job loss, they would automatically lose their subsidy even if they needed child care while they searched for jobs and attended job interviews. The reauthorized CCDBG law would require Michigan to continue to provide the child care subsidy for the full 12-month eligibility period in these types of instances – a huge benefit to those working or newly unemployed parents. For children, this means they can stay in their same child care setting, which we know to be beneficial to healthy attachment and development. So from a two-generation perspective, 12-months of continuous eligibility is a significant win for Michigan’s struggling families.
This is also a win for child care providers and for the state. For providers, they won’t have to worry about a child suddenly losing their subsidy and the resulting shifts in their program’s revenue. We know that providing high quality child care is expensive, so having reliable and continuous revenue through the subsidy reimbursement for 12 continuous months will be helpful to providers as they work to maintain and increase the quality of their business while serving low-income families. For the state, our administrative costs will go down as we no longer have to track families during their 12-month eligibility periods and can continue to increase our focus on ensuring access to higher quality care.
This, and other policy shifts to the reauthorized CCDBG law, have been a long time coming and we look forward to seeing these changes come down in Michigan to improve the child care system for Michigan’s low-income working families.