Report: Iowa should reform childcare assistance law

 

A new report is suggesting one way for Iowa's newly-elected legislature to help working families: reform how Child Care Assistance works.

 

The report, released this week by the Iowa Policy Project, focuses on the financial "cliff" that occurs at the program's cutoff point.

 

"We ought to build into these programs rewards for work, not penalties. And what stands out in these graphs is the fact that there’s one major exception to that and it’s the childcare assistance program," author Peter Fisher said.

 

Fisher said other financial assistance programs in Iowa, like the Earned Income Tax Credit, Affordable Care Act subsidies and Medicaid and Hawk-I reimbursements, phase out payments gradually as incomes rise in order to reduce the impact of such a cliff.

 

The way the current Child Care Assistance program works, support drops off for a single parent earning about $11.15 an hour with one young child, resulting in a loss of $4,600 a year, the report says.

 

For a two-parent family with two children, support disappears when both parents earn more than $8.45 an hour, causing the family to lose over $8,000 a year, according to the report.

 

The report proposes raising eligibility for the program from 145 percent of the poverty level, where it currently cuts off, to 200 percent of the poverty level and gradually phasing out benefits above the current cap.