Priorities Report: FY2016

Report on States Serving Prioritized Children with child care

assistance under the CCDBG Act of 2014

BACKGROUND

The Child Care and Development Fund (CCDF) serves dual purposes: to promote families’ economic self-sufficiency by making child care more affordable, and to foster healthy child development and school success by improving the overall quality of early learning and afterschool programs. In 2014, Congress reauthorized the Child Care and Development Block Grant Act (hereafter “Act”)^[1] and made new requirements for states, territories, and tribes to improve access to and the health, safety, and quality of child care and school-age care. The Office of Child Care (OCC) within the Administration for Children and Families, U.S. Department of Health and Human Services, issued a final rule based on the reauthorized Act on September 30, 2016.^[2]

For millions of parents, affordable child care and school-age care are critical to maintaining a stable job. In 2014, among families with children under age 6, both parents were employed in 59 percent of married-parent households, and 62 percent of single mothers were employed.^[3] Research has shown that low-income parents who receive child care subsidies are more likely to be employed, and have fewer work disruptions, which leads to more stable jobs.^[4] Child care subsidies can help defray these high costs of child care, but the average subsidy in fiscal year 2014 was well below the full cost of quality care. For example, the highest average annual subsidy per child paid by a state/territory was $9,408 in FY 2014, while the lowest average annual subsidy per child paid by a state/territory was $1,944.^[5] Current funding for CCDF and related programs serves 15 percent of federally eligible children (birth through age 12). In fiscal year 2014, CCDF served roughly 1.4 million children a month, a reduction from 1.8 million children in fiscal year 2001.

DISCUSSION

In Section 658E(c)(3)(B)(ii)(I) of the Act,^[6] Congress required an annual report “that contains a determination about whether each state uses amounts provided to such state for the fiscal year involved under this subchapter in accordance with the priority for services.” The priorities under the Act are: 1) children of families with very low family incomes (taking into consideration family size), and 2) children with special needs. In Section 658E(c)(3)(B)(i) of the Act,^[7] Congress also highlighted assistance for homeless children. The final rule published on September 30, 2016, based on the Act, adds a priority for services for children who are experiencing homelessness,^[8] so we have included a discussion of that population in this report.

Most Recent Data on Priorities

For purposes of this report, we reviewed the state and territory CCDF Plan Preprint (ACF Form 118). Each state’s and territory’s Lead Agency submitted its triennial plan for Fiscal Years 2016 through 2018 in March 2016. States and territories submitted their plans while final regulations for the CCDBG Act of 2014 were being developed. Thus, OCC asked states and territories to write their Plans based on a reasonable interpretation of the Act, pending completion of a final regulation. States and territories had the option to outline an implementation plan for one or all of 26 new statutory requirements if the state and territory was not yet able to certify compliance. As a result, all Plans are conditionally approved until each state and territory fully implements all new requirements of the CCDBG Act of 2014. The OCC will collaborate with states and territories to support and monitor the successful and timely implementation of all provisions of the Act. For the first time, OCC posted the conditionally approved CCDF Plans on its website. ^[9]

The CCDF Plans offer a snapshot into current and planned efforts, initiatives, and implementation plans for each state and territory through September 30, 2018, but these Plans are not a catalog of all activities undertaken by the state or territory. If a state makes a substantial change to the CCDF program, it must submit a request to amend its Plan pursuant to 45 CFR 98.18(b) of CCDF regulations.

In response to the new law, OCC has modified Lead Agency reporting of administrative data to require new elements, including whether children receiving CCDF services are experiencing homelessness or have disabilities. The new reporting will provide additional information in the future on the extent to which states are prioritizing services for vulnerable populations, including the populations required by the Act and regulation. Another new element will be the quality of care that children are accessing, as determined by the state.

Priorities in the FFY 2016-2018 Lead Agency Plans

At a minimum, the Act requires Lead Agencies to give priority for child care assistance to children in families with very low incomes and children with special needs.^[10] This did not change under the 2014 reauthorization. Prioritization of CCDF assistance services is not limited to eligibility determination (e.g., establishment of a waiting list or ranking of eligible families in priority order to be served). Consistent with the language and spirit of Act, the final rule adds ‘‘children experiencing homelessness’’ to the Priority for Services section at 45 CFR 98.46. Lead Agencies may fulfill priority requirements in a variety of ways, such as higher payment rates for providers caring for children with special needs or waiving co-payments for families with very low incomes (at or below the federal poverty level).

1. Prioritizing services for families with very low incomes

All states and territories prioritize or target child care services for families with very low incomes. States and territories have the flexibility to determine the definition of “very low income.” Many states prioritize services specifically to families receiving or transitioning off of Temporary Assistance for Needy Families (TANF). According to fiscal year 2014 data (most recent available):

• Fifty-one (51) percent of families receiving CCDF were below the Federal Poverty Level (FPL) or $19,790 for a family of three.
• Twenty-seven (27) percent had incomes between 100 and 150 percent of the FPL.
• Eleven (11) percent had incomes above 150 percent of FPL.
• The remaining families had invalid or unreported data (5 percent) or a child as head of household (5 percent).

Some states waive family co-payments for families earning less than a certain amount. For example, Alabama waives the co-payment for families with incomes at or below 30 percent of the federal poverty level and Indiana waives co-payments for families under 100 percent of the federal poverty level.

Priority status may be protective for populations in the event of restricted resources or intake into the state programs. For example, Georgia has a variety of priority status groups, including very low income families, which means that any funding restrictions that lead to reductions in new cases would not apply to families who meet the criteria for one of those groups. Some states noted in their Plans that they do not currently keep a waiting list for assistance, which is not required by law, but if they decide to establish one, very low income families would be a priority for assistance. ^[11]

While states are prioritizing assistance for very low income parents, overall only 15 percent of children eligible under federal rules received child care assistance.^[12] Even with eligibility set below the 85 percent of State Median Income in every state, tens of thousands of children are on waiting lists for child care assistance in the states that maintain such lists. When child care assistance is unavailable, it puts parents in jeopardy of losing their job or the number of work hours, thereby putting more stress on their ability to meet their children’s basic needs.

Thirty-three states and territories waive co-payments for some or all families below poverty: AL, AR, American Samoa, DE, DC, FL, GA, Guam, HI, IN, IA, KS, LA, MD, MN, NE, NJ, NY, NC, ND, Northern Mariana Islands, OH, OK, OR, PR, RI, SC, SD, UT, VT, Virgin Islands, WV, WY.

Fourteen states will prioritize very low income families when a waiting list is established or release occurs: AK, AZ, DC, HI, ME, MT, NV, NH, NM, NC (at discretion of local purchasing agency), PA, SD, UT, WA.

1. Prioritizing children with special needs

All states and territories reported that they prioritize services for children with special needs. States that do not currently maintain a waiting list for child care assistance note that they would provide a priority for such children if a waiting list were instituted. Some states and territories tier their priority categories and children with special needs may be the second or third priority category after very low-income and TANF. In addition to children who are identified as having a disability, some states define “special needs” to include children receiving protective services or foster care and children who need increased supervision or modified equipment and activities due to a physical, mental, sensory, or emotional delay or medical condition. The Act defines the term “child with a disability” but not the term “special needs.”^[13]

Six states have a definition that includes children at risk of or receiving protective services or foster care services: AL, CA, ME, MO, ND, TX.

Fifty-one states and territories have a definition that includes child with a disability or unable to care for himself/herself: AK, American Samoa, AR, CO, CT, DE, DC, FL, GA, Guam, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, Northern Mariana Islands, OH, OK, OR, PA, PR, SC, SD, TX, UT, VT, Virgin Islands, VA, WA, WV, WI, WY.

Twenty-six states and territories provide a higher payment rate to providers caring for children with special needs who require additional care: AZ, AR, CO at county discretion, CT, DE, GA, Guam, IA, KS, LA, MN, MS, MO, MT, NH, NY, NC at discretion of local purchasing agency, OH, OK, OR, PA, SD, UT, VT, VA, WI.

1. Prioritizing children experiencing homelessness

In 2013, of the children who were homeless, 10 percent of children who had been in a shelter were under 1-year old, and 39 were between 1- and 5-years old. ^[14] Lead Agencies also described in the FY 2016-2018 Plan how they are prioritizing children experiencing homelessness for child care services. The Act emphasizes serving children who are experiencing homelessness and the final rule clarifies that this population also is a priority for child care services under CCDF. Specifically, the Act requires states and territories to: (1) allow homeless children to receive CCDF assistance after an initial eligibility determination but before providing required documentation (including grace periods for compliance with immunization and other health and safety requirements); (2) provide training and technical assistance to child care providers on identifying and serving homeless children and families; and (3) conduct specific outreach to homeless families (658E(c)(3)(b)(i)).^[15]

Twenty-seven states and territories reported in their CCDF Plan that they are fully implementing procedures to increase access to CCDF subsidies for homeless children and their families: AZ, AR, CA, DE, FL, Guam, IN, KY, LA, ME, MD, MA, NV, NM, NC, OH, OK, OR, PA, PR, SC, SD, UT, VT, WA, WV, WI.

Twenty-nine states and territories reported that they have not fully implemented procedures to increase outreach to and access for this population and the grace period to comply with immunization and health and safety requirements: AL, AK, American Samoa, CO, CT, DC, GA, HI, ID, IL, IA, KS, MI, MN, MS, MO, MT, NE, NH, NJ, NY, ND, Northern Mariana Islands, RI, TN, TX, Virgin Islands, VA, WY.

Examples:

• In Delaware, the CCDF Lead Agency has developed a partnership with the Delaware Homeless Council and the local McKinney-Vento Liaison. The Lead Agency distributes literature regarding child care services and ensures that members of the Continuum of Care, a group of stakeholders working to develop solutions to homelessness in the state, are knowledgeable about information on the agency’s website.
• Massachusetts’s Lead Agency has entered into direct service contracts with 27 early education and care providers to serve 685 children. To access these slots, either the shelter provider or the contracted child care provider must contact the Department of Housing and Community Development or the Department of Children and Families to obtain a homeless child care referral. In State Fiscal Year 2016, the Lead Agency launched an initiative to identify additional homeless families through vouchers that might not be reached through existing homeless contracts (e.g., direct outreach to substance abuse shelters working with families that are funded and overseen by the Department of Public Health and other homeless shelter programs overseen by other agencies).
• South Carolina’s Lead Agency has been collaborating with the state department of education’s McKinney-Vento State Coordinator and the South Carolina Coalition for the Homeless (a coordinating and service entity that assists local coalitions) as well as four regional Coalitions for the Homeless. They identify homeless families in need of child care assistance and develop referral processes for subsidy vouchers to increase access to high quality child care. In January 2016, the Lead Agency implemented a specified number of slots and a policy prioritizing homeless children.

CONCLUSION

The Administration for Children and Families is required by law to provide a report on state and territory compliance with the priority of assistance to children in very low income families and children with special needs. This report includes information on a priority area established in the final rule, published September 30, 2016, which prioritized children experiencing homelessness to address components of the Act.

This is the first of the newly required reports addressing new populations. Drawing on the CCDF Plans for federal fiscal years 2016-2018, ACF is pleased to report that all states and territories are prioritizing CCDF assistance to families with very low incomes and children with special needs based on state income eligibility limits and state determinations of special needs. States are working to establish or expand outreach and access for children experiencing homeless pursuant to the CCDF statute and the final rule. The Office of Child Care will continue to track and update information in the next annual report (September 30, 2017) required by the Act.