This is one of the biggest “Catch-22’s” around: you need to work to have enough income to support your kids, but working means paying someone else to take care of your kids. And now the cost of child care is so high it will eat up most - if not all - of what you earn.
President Obama announced in January 2015 plans for new programs to make child care more available and affordable. He made the point that in too many places the annual cost of child care — especially for more than one child — often exceeds the yearly cost for tuition at a (good!) state university.
But child care is not something you can take lightly. These are your kids we’re talking about, and the cheapest deal in town could be a risky decision. At the same time, you may not be able to afford what can easily cost $10,000 to $18,000 per year, depending on where you live.
So what are you to do? There are financial aid programs for “eligible” families — typically those with lower incomes. Some of them are government programs, others are from non-profits. All are worth looking into. Here’s a review of assistance options and other tips for reducing child care costs:
Discover your program today!
The Office of Child Care is an important part of the Health and Human Services Agency. They provide assistance to low income families so more people can afford child care and programs conducted after school. They also help parents in their efforts to find good child care, to pay for that care, to identify a local head start program, and to find out more about additional programs in the parents’ state. Each state differs in the way that they determine eligibility for assistance and application requirements for grants. If you would like to speak to a person about opportunities for care in your area, you can call toll free at 1-800-424-2246. They will help you identify an agency close to you.
Update May 2018
An important first place to look for child care assistance is your own state’s website. Do a search for child care or specifically “child care assistance programs” to see what your state offers. All states receive funds from the federal government which they in turn use to offer child care assistance or subsidy programs to parents who live in the state. Every state has its own requirements in terms of eligibility, but typically parents must meet low income requirements and the children in question must be under age 12 or 13. If there are disability issues then children may be older, depending on the state.
Update March 2018 If you're looking for child care for an infant the challenge is even bigger. Child care centers need to charge more for infant care than older children because the law requires a caregiver-infant ration of 1:4. So you might have to get creative if the cost is more than you can handle. One possibility suggested by experienced moms is to team up with other new parents and create a sharing agreement. Perhaps one mom takes all the kids one day, giving the others a day where they can be at their jobs or take care of shopping and home chores.
Update August 2017 Yikes, a 2017 report from the U.S. Department of Agriculture says that married couples with middle incomes will spend over 233,000 dollars to raise each of their children to adult age. Those in the low income range will spend almost $175 thousand per child. And those with high incomes will spend closer to $370,000 plus. Notably, child care and education are responsible for about 15% of that. And these numbers are from 2015 so it’s surely higher these days (2017). We have no idea why the USDA is the agency compiling these numbers. But they do say that the cost per child does decrease the more children you have. Not that that means you should hurry up and have more kids — things may be tough enough.
Update April 2017 Have you seen the new tax plan released by President Trump? He has proposed reducing the number of tax brackets to three and providing reductions for all Americans. There are several aspects which favor those with children: it doubles the standard deduction which means that you basically pay nothing on the first $24,000 of your income. With regard to child care costs, the plan reportedly includes tax code changes to help families pay for child care. As of this writing (shortly after the administration’s announcement of the new plan) we do not have details, but it looks promising. Stay tuned and we’ll update this section as soon as details are available.
Update January 2017 President-elect Trump has offered more detailed plans related to child care than any other candidate, past or present. So of course that opens him up to praise as well as criticism. One critique took issue with the plan because it included stay-at-home parents. Under the plan, they would be able to deduct from their taxes the average that is typically paid for child care by those who work outside the home. One critique took great issue with the fact that the plan encouraged women to be at home by offering no extra benefits for those working outside the home. This seems an odd complaint. Staying at home does not mean “not working” — it just has traditionally meant working but not paid. And this is a big expense to a family. As a socioty we value it so why not help with the expense, just as we do with education? Stay tuned to see how the Trump plan evolves post-inauguration.
Obama’s plans (mentioned above) sound terrific because they aim to make quality care available and affordable to “every working and middle-class family with young children.” That’s a major goal. The proposals include increasing the available financial support currently provided by the Child Care Development Fund, boosting the child care tax credit to a maximum of $3000 (up from $1000) per child, and developing a new fund to encourage innovation in states’ development of programs for families with special needs. The plans would also provide greater tax breaks for child care expenses.
The good news is these plans could make a big difference to many families that receive no assistance today. The not so good news is that it will take ten years for them to be implemented and available to families. And that assumes they make it from the proposal stage to the approved and funded program stage.
Will anything change after the 2016 presidential elections? Both candidates have advanced plans to address the issue — though as we know, campaign promises often become just history. The Clinton plan appears to rest primarily on tax credits, which of course one would have to be working and paying taxes to benefit. Trump’s plan, recently announced by Ivanka, includes tax incentives but also has some creative additional approaches that recognize the wide variation in mothers’ circumstances. We hope that the attention paid to child care issues resulting from the election campaigns will one way or another improve the situation for millions of parents and children.
In the meantime here are some options you should pursue in order to find quality child care for your family:
This fund is a block grant provided by the federal government to the states. Though billions of dollars are awarded it is not enough to meet the needs of all families. The cost of child care has almost doubled since 1985, and there are more than 32.7 million children in various child care programs while their parents work or study. However, it is absolutely the first place you should start looking for assistance.
Remember that benefits.gov can be helpful. One item to note on their site is the discussion of the Child Care and Development Fund. This is a program that helps families categorized as “low income” with child care necessary because they (the parents) are working or going to school. You could qualify if your kids are 13 or fewer years old —- or even if they’re under 19 but are not able to take care of themselves along with some other stipulations. The website benefits.gov leads you through the necessary steps to apply, beginning with you identifying where you live so that you can find appropriate programs in your state or territory.
Money goes from the feds to the states, Indian tribes and territories. They in turn provide financial support to low income families with certificates, grants or contracts. Families can use certificates for care at a variety of child care programs. Care providers can get funds to do training and other activities that increase care quality. Amounts available and procedures for getting funds or certificates are different in each state. To get more information in your state take a look at your state's website or call 202-690-6782 for specific child care contacts in your state.
If you are in the U.S. Air Force and you don’t have any access to on-base child care there is a new program which may be of interest. Through the organization ChildCare Aware of America there is now a child care fee assistance program which could benefit you. If you are on active duty or in the Reserve take a look at this program and learn more at usa.childcareaware.org.
If your employer offers Flexible Spending Accounts, which are also sometimes called Dependent Care Accounts, you should enroll. These accounts allow you to put aside pre-tax money you can then use to pay child care costs. Depending on how much you earn and how much you can put aside, these plans can save working couples $2000 in annual taxes – more if you have more than one child.
Some employers will offer working parents flexible work schedules or even subsidies that help parents pay for child care. It’s worth checking with your Human Resources Department to see what benefits might be available. And it's also worth requesting such a benefit even if it's not yet officially available!
If your employer offers day care or other arrangements on-site that is obviously an ideal solution. Hopefully this option will become more common as studies have shown that parents are less stressed and more productive when such a service is available.
Unfortunately there are child-care related tax credits that businesses are not taking advantage of. Many states have put tax credits into place that can cover subsidized child care for their employees or even a child care facility on-site. But most of these credits go unused, either because the companies don’t pay enough state taxes to make the credits valuable or because they simply haven’t taken the time to put them in place. If your company isn’t providing any subsidies you might want to check to see if your state offers tax credit incentives to businesses. If they do you might ask your human resources office if they would consider using them.
Some states have grants available to support students working toward a degree. They all have different names and are offered through different agencies so you would need to search on your state’s website to get more information. If you are a woman, and especially if you are the sole provider for your family, there may also be some special grants for you (whether you are a student or not!). Check out the information in Grants for Women to learn more about them!
Some child care centers offer a sliding scale fee for their services. This way if you have a very low income the cost to you would be lower than to others. Be sure to ask, they may not always be advertised! Also ask if the center offers any scholarships to those who cannot afford their regular rates.
Are you receiving any social security benefits to which you might be entitled? If you have a spouse or even an ex-spouse, you might qualify for payments even if you never worked. Disability or the death of a spouse can also qualify for benefits. Check out our article about Social Security to be sure you have covered all bases.
Search for non-profits in your area that offer assistance to families looking for child care. Check to see if there is a Child Care Services Association in your area —- even if they can’t help you directly they provide a very useful referral service.
Consider creating - or finding - a child care co-op. In these arrangements a number of families/parents will create a schedule and take care of each other’s kids on a rotating basis. This arrangement could be especially useful for you if you work part time or have an unusual schedule.
Check out child care programs that may be offered by churches near you. These may be less expensive than other centers and/or have some scholarships to offer. And often they do not focus on any specific religious teachings, if that is of concern to you.
Look for a family child care operation as opposed to a commercial child care center. As the name implies these operate out of the caregiver’s home so their costs - and their charges - are lower. Be sure to get references from other parents before deciding on one, and also make sure that any outfit you consider is properly licensed by your state.
Definitely check out the information in Grants for Kids to get more information about:
- Head Start and Early Head Start programs;
- How to find local programs specific to your area; and
- Private Programs like the YMCA and others that may provide services near you.