Few Eligible Families Using Child-Care Aid, HHS Says

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States are serving only a small fraction of the low-income families that are eligible for child- care assistance, according to a study from the U.S. Department of Health and Human Services.

During an average month last year, only 1.5 million of the 9.9 million children--or 15 percent--who could have received vouchers through the federal Child Care and Development Fund were using the program, the agency says in a report issued last week.

The percentages of children being served range from a low of 4 percent in Mississippi to a high of 24 percent in West Virginia.

But even those numbers may give a more optimistic picture than is warranted, some children's advocates argue.

If states had set their eligibility levels for assistance as high as the federal government allowed--meaning that families could earn up to 85 percent of their state's median income and still receive a subsidy--an estimated 14.7 million children would have been eligible in 1998, and only 10 percent would have been served.

State Spending

The study, released by Sens. Christopher J. Dodd, D-Conn., and James M. Jeffords, R-Vt., shows that states are using all of the money available to them for child care under the 1996 welfare-reform law--the Personal Responsibility and Work Opportunity Reconciliation Act--to serve families. "Recent data show that states are fully utilizing federal resources and often invest more than required state spending levels, but the problem of unmet needs remains critical," it says.

In the 1998 fiscal year, states spent $3.5 billion in federal funds on child-care assistance, which included $636 million that was transferred from Temporary Assistance to Needy Families, as the welfare program is now known. They also spent $1.6 billion of their own money through the CCDF program.

The report says child-care expenses make up a large chunk of household budgets and to reduce costs, some parents cut back on work hours or do not work at all. It cites recent studies that show that when funding for child-care subsidies increase, so do employment rates and earnings for low- and moderate-income families.

In written response to the study, Rep. Nancy L. Johnson, R-Conn., the chairwoman of the Human Resources Subcommittee of the House Ways and Means Committee, said: "States have plenty of money to spend on child care in the coming years as more and more welfare beneficiaries return to work, and I'm working on ways to provide even more flexibility to states so they can meet this growing need."

Vol. 19, Issue 9, Page 25

Published in Print: October 27, 1999, as Few Eligible Families Using Child-Care Aid, HHS Says
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