The new welfare-reform bill enacted by the Congress is intended to expand training, employment, and child-care assistance for low-income women, but it may reduce child-care tax benefits for some moderate-income working parents.
The government now offers two kinds of benefits: a dependent-care tax credit--equal to 20 to 30 percent of expenses, depending on parents' income level--that limits expenses to $2,400 for one child or $4,800 for two or more children; and so-called "salary reduction plans" that permit parents to have day-care costs withheld from their salary and reimbursed by employers without being taxed. Such costs are limited to $5,000 a year.
But beginning Jan. 1 under the Family Support Act of 1988, employees will no longer be able to use both of those benefits when day-care costs exceed $5,000.
According to experts, the new law reduces the maximum expenses for the tax credit dollar for dollar by the amount of expenses claimed under salary-reduction plans.
For example, an analysis by the consulting firm Hewitt Associates finds, a family with two children with day-care costs of $6,000 would be able to reduce salary to cover the first $5,000, but would no longer be able to claim a tax credit for the remaining $1,000.
Observers say the new restrictions are unlikely to significantly affect families with very low incomes who are not eligible for tax credits or pay less than $5,000 for child care.
But they could have a "very substantial effect on moderate-income workers," said Ann Kolker, public-policy director for the National Women's Law Center. "In a climate in which everyone is talking about the need to expand child-care options, the change in the law has "begun a process of constricting and eroding the limited assortment that's available."
She added that the law reduces the age of eligibility for child-care credits from 15 to 13.
To make sure providers report their incomes and that claims for child-care costs are legitimate, the law also requires taxpayers to supply names, addresses, and Social Security numbers of providers.
Bernard Schaeffer, a benefits lawyer with a Phildelphia consulting firm, said that rule would adversely affect parents who make day-care arrangements with relatives or neighbors and could drive up day-care costs.
Ms. Kolker noted that the reporting requirement could result in less take-home pay for care providers, but she argued that "on balance, workers should see the positive side of having their incomes reported and requiring that employers provide Social Security" and other benefits.
Noting that studies often provide contradictory data on the effects of day care on infants and toddlers, the National Center for Clinical Infant Programs has published a guide outlining areas of consensus among researchers.
The 16-page pamphlet--designed to help readers "baffled by reports of apparently conflicting research findings"--cites 17 child-care researchers who met at a "summit meeting" convened by the n.c.c.i.p. last year.
Despite their differing views on day care's effects, the researchers stressed the need to assess the quality of care in a day-care setting or home in order to determine its effectiveness. They also called for "improved child-care options and services" for young children and families.
The group urged that studies of differing lengths and designs be undertaken to compare children in various settings and warned that no one study should be "the sole guide" for decisionmaking.
Infants, Families and Child Care: Toward a Research Agenda, is available for $1.50 from the n.c.c.i.p., 733 15th St., N.W., Suite 912, Washington, D.C. 20005.
Educators can help teach parents to use newspapers to reinforce their children's reading skills, under a new program involving newspaper representatives and school reading specialists.
The project, "Family Focus: Reading and Learning together," is being sponsored by the American Newspaper Publishers Association Foundation, the International Reading Association, the National Congress of Parents and Teachers, and the National Association of Elementary School Principals.
Program materials were mailed last month to 1,400 newspaper publishers and 1,200 i.r.a. chapters, which will invite schools to hold workshops for parents. For more information, write the i.r.a., Family Focus, 800 Barksdale Road, P.O. Box 8139, Newark, Del. 19714-8139.
The Wellesley Center for Research on Women has published what it calls the first book on after-school child-care programs for disabled children.
School-Age Children With Special Needs: What Do They Do When School Is Out?, by Dale Borman Fink, includes information on programs for children with special physical, emotional, and medical needs.
Copies are available for $12.95, plus $3.50 for shipping, from the Exceptional Parent Press, P.O. Box 657, Kenmore Station, Boston, Mass., 02215.
The center also plans to publish a directory of child-care programs for teen parents by the end of the year and is working with the National Organization on Adolescent Pregnancy and Parenting to convene a panel of experts on the topic. For more information, write to Fern Marx, Center for Research on Women, Wellesley College, Wellesley, Mass., 02181.--dg
Vol. 08, Issue 10