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Annual Meeting of State Child Care Administrators

Sponsored by the Child Care Bureau, Administration for Children and Families, U.S. Department of Health and Human Services

Remarks by
Sarah C. Shuptrine, President
Southern Institute on Children and Families

July 27, 1998
Washington, DC

As we conduct public policy research at the Southern Institute on Children and Families, we have placed a premium on listening to the concerns and views of families. We’ve made special efforts to confer with welfare families, even before welfare reform.

From 1994 through 1996, we conducted personal interviews and focus groups with welfare recipients and transitional Medicaid recipients in three states (Georgia, North Carolina and Tennessee).

They told us that they do not want to be on welfare but that they cannot afford the extra costs they incur when they go to work, primarily child care and health coverage.

In one of our studies, we conducted extensive interviews with 69 recipients, half of whom were on Medicaid and half were on Transitional Medical Assistance. They were very familiar with the system. Most had been on welfare two or more times. The interviews were conducted in Charlotte and Nashville.

We asked them to choose the Number One benefit they needed most to work full time - they could only choose one Number One (Choices were: Child care, Medicaid for my children, Transportation, Food Stamps and Medicaid for myself).

Distribution of Study Recipients on the Benefit Considered
Most Important to Accept a Full-Time Job
Most Important Percentage of Recipients
Child Care 48%
Medicaid for Children 32%
Transportation 12%
Food Stamps 6%
Medicaid for Myself 3%
TOTAL 100%
Source: Southern Institute on Children and Families, 1994. Data collected from recipient interviews in Charlotte, North Carolina, and Nashville, Tennessee.

Whether they were in Charlotte or Nashville, half of the recipients listed "child care" as the Number One benefit they had to have some help with in order to work full time. One-third said "Medicaid for my children."

We also asked an open-ended question soliciting their suggestions about what states needed to do to better support a parents’ efforts to get a job and keep a job. They expressed a great deal of frustration with time limited transitional child care benefits. Sixty eight percent (68 %) said that states should design systems so that benefits are gradually reduced as earnings increase, rather than basing benefits on an arbitrary time line that ignores their ability to earn enough to pay for child care on their own and thus stay in the work force.

In 1997, the Southern Institute, with support from The Robert Wood Johnson Foundation, conducted site visits to 17 southern states and the District of Columbia. In cooperation with state officials, meetings were held to identify policies and procedures that present access barriers to health and child care benefits for low income families, and to identify strategies states are using to improve access to benefits.

A report on the site visits, published in February 1998, provides information on child care funding decisions made in the 17 southern states and the District of Columbia

Results showed that all southern states planned to make use of all available federal matching dollars. Six states and the District of Columbia planned to spend beyond the federal match states (Arkansas, Delaware, Georgia, North Carolina, Tennessee and Virginia).

Only seven states had transferred funds from TANF to their Child Care Development Block Grant (CCDBG): Florida, Missouri, North Carolina, Oklahoma, Tennessee, Texas and Virginia. This was surprising given the surpluses that states are building up due to TANF savings. Given the economic realities of paying for child care on low-wage salaries, it was a "no brainer" to transfer funds from TANF to child care.

As part of the study, we were particularly interested in whether state policies on child care were fully funded. Unlike Medicaid, child care is not a federal entitlement program. There is no guarantee of access to child care assistance, even if families are eligible under a state’s criteria. The number of eligible families who actually receive assistance is determined by the amount of funding made available by each state. Thus, just because a family is eligible for child care doesn’t mean they will receive it.

As more and more families leave welfare and go to work, the need for additional child care funding is going to be more and more compelling. And the competition between families leaving welfare and low wage families who are not connected to the welfare program will become more intense unless significantly more funding is provided for subsidies. States should act and act now if they want lasting results. It’s a matter of affordability and it will definitely affect job retention.

Inadequate funding is not the only barrier that families face when seeking assistance with child care.

The eligibility process can impede access to child care subsidies, and the redetermination process can present barriers to retaining child care subsidies.

The dilemma for states is that while eligibility simplification will reduce the complexity of the eligibility process and save administrative dollars, it makes child care benefits accessible to more families and thus would increase expenditures. So, the commitment to make subsidies more accessible is essential to serious simplification initiatives.

Some strategies used by states to improve access to child care for working families are:

Allowing families to apply by mail or telephone without requiring a face-to-face interview.

Having a 12-month period of eligibility between redeterminations.

Identifying areas where more discretion can be used by staff making eligibility determinations, e.g. income and age verification not required unless questionable.

The Southern Institute survey also asked states to provide information on what happens when a family becomes ineligible for a particular child care program. Some states take the initiative to search for other eligibility categories to avoid the loss of child care assistance, while others rely on the family to apply for another category of assistance.

WHAT HAPPENS WHEN A FAMILY BECOMES INELIGIBLE
FOR A PARTICULAR CHILD CARE PROGRAM?
State Agency
Automatically
Searches for
Another
Category
Family Required
To Reapply
Other
Alabama Yes    
Arkansas   Yes  
Delaware     Seamless system eliminates categories of eligibility.
District of Columbia   Yes  
Florida Yes    
Georgia Yes    
Kentucky     All child care programs within the Cabinet are combined. Assist with search outside of the Cabinet.
Louisiana   Yes  
Maryland Yes    
Mississippi   Yes  
Missouri Yes    
North Carolina     Funding sources are blended so that families do not have to reapply to move from one category to another.
Oklahoma   Yes  
South Carolina   Yes  
Tennessee   Yes  
Texas Yes    
Virginia Yes    
West Virginia     Seamless system. Families may mail in review at time of closure of AFDC benefits to determine continuing eligibility.
Source: Southern Institute on Children and Families, Southern State Survey on Child Care, October 1997.

An area of critical importance to improving access to child care assistance is outreach to inform families about the availability of subsidies. In the interviews we conducted in Nashville and Charlotte that I mentioned earlier, specific questions were asked in order to determine the degree to which recipients understood how their benefits changed when they left welfare for work. The questions related to AFDC (the cash assistance welfare program), Medicaid, food stamps, child care and housing.

Percentage of AFDC Recipients Providing Incorrect Responses
to the Impact of Earnings on Benefits
Benefit Percentage Providing
Incorrect Responses
AFDC 24%
Food Stamps 6%
Medicaid 76%
Child Care 47%
Housing 24%
Source: Southern Institute on Children and Families, 1994. Data collected from recipient interviews in Charlotte, North Carolina, and Nashville, Tennessee.

Based on these findings, the Southern Institute recommended that state social services officials in the southern states develop "user friendly" materials to effectively communicate available benefits.

In cooperation with state social services agencies in Georgia and North Carolina, the Southern Institute developed easy to read, eye-catching outreach brochures designed to communicate clear messages about available benefits.

Unlike the typical state agency communication document, the outreach brochures cut across program and agency lines and thus pull together information on multiple benefits, one of which is child care.

The brochures were designed with assistance from 18 focus groups in North Carolina and nine focus groups in Georgia. The focus groups were held with recipients, community organizations and employers. The brochures we developed are:

In the report published by the Southern Institute in February 1998, we made six recommendations on improving access to child care benefits: