Terra Goodnight · January 29, 2015

Kasich proposes expanded eligibility for child care assistance

Today, Governor Kasich offered a sneak preview of his budget plan, and there may be some good news for working parents. The Governor proposed expanding eligibility for the state’s publicly-funded child care assistance program to more low-income working families. Today, working parents become eligible for reduced cost child care from the state if they earn less than 125 percent of the federal poverty level (FPL), or $19,662 for a single mom with one child. That equates to a full-time job paying $9.45/hour. Once in the program, parents continue to receive help with the cost of child care as their income grows, up to 200 percent of FPL, or $31,460 ($15.13/hour). At this level,a small pay increase could translate to the loss of thousands of dollars worth of child care benefits, leaving a family worse off financially. This is what advocates call the eligibility “cliff,” and it creates a perverse incentive for working parents to avoid pay increases for fear of losing assistance with the high cost of child care. According to the Columbus Dispatch, Kasich intends to tame the cliff into a gradual slope:

Instead of cutting off all child-care benefits when a family hits 200 percent of the federal poverty level ($3,298 a month for a family of three), Kasich proposes to gradually phase out benefits until a family hits 300 percent of the poverty level ($4,948 a month for a family of three).

What the Governor didn’t say is whether his budget will address other shortcomings of the program that allow families to lose eligibility because of a change in jobs or schedules – both sad facts of life in today’s low-wage economy, and forcing them to go back to the initial income threshold to get back into the program. No program aimed at lifting people out of poverty should create an incentive for working parents to earn less. Policy Matters Ohio published a detailed report in 2014 on the many problems with Ohio’s child care program, providing a clear blueprint for lawmakers on needed fixes for the program. We hope there is more to Kasich’s proposal than meets the eye when it emerges on Monday.  If not, lawmakers are advised to listen to the stories of working parents and design a program that aims to lift families out of poverty and off of public assistance for good.