Parents are quitting jobs, passing on raises — to qualify for child care

Posted by Admin December 16, 2024 Jobs

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NEW YORK — To keep working, Amy Lee Funes desperately needed help paying for child care. Funes loved her job at a New York City-based child and family nonprofit, but she earned only $35,000 a year. In a city where child care can easily consume more than half of that, Funes was optimistic that she would qualify for a government-funded subsidy to help her afford the cost.

She had no other real options: After moving into a Harlem homeless shelter to escape an abusive relationship, Funes was too far from her mother to rely on regular help with her baby boy.

She arrived at a city office in Queens one winter afternoon in 2019 armed with evidence of her living situation and meager income. She thought the process would be straightforward given how little money she made. To her disbelief, she was denied.

“The woman said, ‘I know you don’t make a lot of money,’” Funes recalled. “‘But you make too much money to get a child care subsidy.’” The only way she could get a voucher, she was told, was if her income dropped even lower or if she went on public assistance.

Disheartened and confused, Funes felt indirectly pressured to quit her job. “I had no other choice,” she said. “I had to leave my job to get on public assistance so I could get this child care subsidy.” She hoped it would only be a temporary setback. But for years after, the quest for a voucher would interfere with her quest for economic stability.

Funes’ experience speaks to a broken, underfunded system — in New York and nationwide — that too often traps families, and especially women, in poverty, advocates say. Each state has its own child care subsidy program for lower-income families, funded in large part by federal money. The federal government requires that subsidies go to families that make no more than 85 percent of their state’s median income. But states have considerable leeway in setting up rules for doling out subsidies. Most states, including New York at the time that Funes applied, have eligibility limits that are more strict than the federal income recommendation, meaning only the poorest of families tend to benefit.

Partly as a result, only a fraction of families — about 10 percent — who are eligible under the federal recommendation actually get subsidies, according to the Center for Law and Social Policy. The variance in state policies means a family may qualify for child care assistance in one state, but not in another. In Ohio in 2023, for example, a family of three had to make less than $36,048 to get a voucher, while in Arkansas the cutoff that year was set about $17,000 higher — at $53,161.

States are not entirely at fault for the broken system. Federal funds for child care assistance come from the Child Care and Development Fund, which received $8.74 billion in funding this fiscal year. Despite recent increases, advocates say the federal allotment has been grossly insufficient.

“The program has never been funded at the level that it needs to be to be able to meet the need,” said Rachel Wilensky, a senior policy analyst at the Center for Law and Social Policy .

States often have to make a difficult choice with the money they have, added Cynthia Osborne, founder and executive director of the Prenatal-to-3 Policy Impact Center at Vanderbilt University’s Peabody College. “Do we pay our providers more and serve fewer [families] or serve more families and pay our providers less?” she said. “I think of it as a ‘whack-a-mole’ problem.”

The stringent eligibility cutoffs chosen by many states can have the unintended consequence of stymieing upward mobility. Some parents have to choose between a job and a voucher. And once parents receive assistance, many live in fear that any slight increase in salary or change in their living conditions could result in officials taking it away. In some states, homeless families are automatically eligible for a voucher, for instance, and fear losing it if they find a home.

Many parents are stuck, said Jennifer Greppi, parent policy director at Parent Voices California, an advocacy organization. “As soon as they make any little bit more, they lose benefits.”

This problem could soon become even worse. A federal rule passed in March requires states to cap the co-payment families pay to a provider at 7 percent of a household’s income. But the directive came with no additional funding, which experts say could force states to serve fewer families. It could also push states to create stricter eligibility rules in an effort to funnel money toward lowering co-payments and complying with the rule.

During the pandemic, when child care subsidy programs received a temporary influx of federal funds, many states eased income eligibility and other program rules. Post-pandemic, it’s been a mixed bag.

Several states, including Iowa and Vermont, have become more generous over the past few years; but at least 10 others have walked back pandemic-era changes that made it easier for families to get and keep subsidies. These states, including Massachusetts and Texas, have long wait lists even for children eligible under their rules. Some states, such as Idaho, and specific regions, like north central Texas and Colorado’s El Paso County and Adams County, have paused enrollment in the program altogether for all families, with few exceptions.

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Amy Lee Funes’ son watches a show after school in his apartment. Leo is autistic and due to high tuition costs, missed several years of child care that Funes believes would have been beneficial for his development. Credit: Jackie Mader/The Hechinger Report

In 2019, when she first applied, Funes had only narrowly missed New York’s income cutoff for child care assistance. If the state had followed federal guidelines, she would have been well below the maximum income of about $60,000 for a family of two. But that year, the state maximum was set at $33,820. Funes made about $98 too much each month.

After receiving the dispiriting news, Funes, who has a bachelor’s degree in psychology, left her job. Her plan was to get on public assistance and access a subsidy — so that she could finally get a job and at least have some income. In early 2020, unemployed, Funes learned that she qualified for a subsidy. She immediately started looking for child care.

Yet within weeks, much of the world — including most child care programs — temporarily shut down due to Covid. Funes hunkered down in a studio apartment with her son, living off unemployment and pandemic-era assistance.

In fall of 2021, Funes found a seasonal job as a cashier at a large New York City department store, earning about $15 an hour; once again, she applied for a subsidy.

This time, things seemed to fall into place. Funes was granted a voucher and found a center she loved close to home. Her son, Leo, had been diagnosed with autism the year prior, and Funes was grateful that now, at the age of 2, he had new opportunities to socialize and to learn.

The relief was short-lived. Not long after her work hours at the department store ramped up to 30 a week, in late 2021, Funes received a letter stating her food assistance would be cut off. Soon after, she said, she was notified that her child care assistance would soon end as well. It made no sense, Funes said. “That’s what the voucher is for, so you can go back to work. So, you’re penalized?”

It’s unclear why Funes lost her voucher at this point; she was certain her income was low enough to qualify for assistance. When asked earlier this year, a city official didn’t offer an explanation, except to say that what happened to Funes likely wouldn’t happen now to a family making a similar income under expanded eligibility rules. Still, the decision to claw back Funes’ assistance appeared to violate a 2014 federal rule, which requires states to provide a gradual phase-out plan for families in situations like Funes’. The rule was part of a broader effort at the federal level to make sure families had more of a cushion before getting kicked out of the program. (For several years, New York and several other states received waivers from the phase-out requirement. The state received another waiver in 2020.)

Funes was unable to pay for child care with her minimum wage at the department store. Once again, in early 2022, she decided to stop working. In March that year, as Covid-era assistance also expired, Funes and Leo moved back into a homeless shelter.

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Toys sit in a pile in the living room of Amy Lee Funes’ apartment. In early 2024, Funes and her son moved out of a shelter and into their own apartment. Credit: Jackie Mader/The Hechinger Report

Advocates say more federal funding is desperately needed so states can both serve all families and children in need and pay providers enough to care for those children. Child care is expensive to provide, and programs are mostly funded privately by families. For families, that cost is exorbitant. In 11 states and the District of Columbia, the average cost for child care for two children is double the average cost of rent. This reality adds to the desperation families feel and the tough choices they must make.

“If you’re teetering on that line, then sometimes a dollar an hour raise can then prohibit you from getting $1,000 a month in child care,” said Crystal Henry, who manages a child care initiative for The Family Conservancy, a Kansas based nonprofit.

Lucy Briseno, a full-time student and single parent of four living just outside of Salem, Oregon, has turned down jobs because the pay increase would disqualify her from child care assistance. Without the subsidy, “I would not be able to afford the quality of child care I get,” she said. She lives in fear of losing her subsidies. “There’s no buffer to wean you or cushion the fall” when child care assistance disappears, Briseno said.

Parents may also hesitate to change their living situation out of fear any alteration will disqualify them. Alexis Jordan, a single mom of four who lives outside of Puyallup, Washington, is working on a bachelor’s degree in social work and political science while keeping part-time hours as a housekeeper. She moved in with her grandparents after a recent divorce; in her current living situation, she and her children are considered homeless. They automatically qualify for a subsidy. She worries that if she takes a higher paying job and moves her family into their own apartment, they will get booted out of the program. “I will always have that fear,” she said.

A lot depends on whether states devote some of their own money to supplement the federal allotment — something advocates are increasingly calling on them to do.

Ideally, advocates say they would like to see the eligibility limits to get into and stay in the program increased to the federal maximum, with state funding available to help families who no longer qualify under federal standards. That could help families avoid the “benefits cliff” that happens when they no longer meet federal program rules, but still need assistance.

Some states have recently revised their programs to expand access. Between early 2022 and 2023, nine states increased their income eligibility limits faster than the rate of inflation. And a handful of states are pouring their own funds into their programs in addition to money from the government.

In Washington, for example, state legislation raised eligibility from around 5 0 percent of state median income to 75 percent. The state’s “exit” limit, or the income that bumps families out of the program, was also increased as part of the state’s $1.1 billion investment in child care. Vermont has made similar changes using a payroll tax contribution. Louisiana has put revenue from casino gambling, CBD products and sports betting toward child care. And New Mexico established a funding stream from oil and gas revenue that now ensures that even middle-income families will be eligible for subsidies.

New York has also taken steps to expand access. The state now follows the federal guideline that families are eligible if they make up to 85 percent of the state median income. Currently, that’s about $74,000 for a family of two — more than twice the amount Funes earned when she was turned away just a few years ago. Earlier this year, Gov. Kathy Hochul announced a $1.8 billion investment of state funds for the child care assistance program. The funds will help cover child care costs for additional families who are eligible for vouchers.

As a result of the new policies and funding, New York City has expanded the number of children who receive subsidies from 9,000 two years ago to 46,000 this year, according to New York City’s Administration for Children’s Services.

These efforts are a start, experts say, but a more widespread overhaul is needed. And that won’t happen without increased federal funding at the levels seen during the pandemic. “Without more sustained federal resources, this problem isn’t going away,” said Wilensky of CLASP. “States really can’t do it alone. They can help, but it’s not something that can exclusively be solved with state investment.”

For families, the stakes are high.

Funes is still dealing with the repercussions of decisions she made in her maddening bid to get and keep a subsidy. Her career has been derailed. She has had to delay going back to school. The stress from the instability and thwarted opportunities still lingers. Meanwhile, she knows Leo missed out on valuable early learning and socialization.

Funes is now part of a nonprofit parent advocacy group and regularly speaks to legislators and on panels about family support policies. Over the next few years, she hopes to get her master’s degree in social work and rejoin the workforce as a social worker or therapist. She will need a flexible job to be able to meet Leo, who now attends a public school program for children with disabilities, when he arrives home from school.

When Funes thinks about the path she’s ended up on, it still stuns her that it turned out this way. “I had no idea it was going to be so hard to get help with child care,” she added. “I got my college degree, I did all the right things. No one should have to go through what I went through.”

Contact staff writer Jackie Mader at (212) 678-3562 or mader@hechingerreport.org.

This story about child care assistance was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education, with support from the Spencer Fellowship at Columbia Journalism School. Sign up for the Early Childhood newsletter.