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Pandemic Aid for Child Care 'Family Fees' Extended for 3 Months

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A group of small children sit around a table in a child care center. Two are playing a game with colorful, plastic toys and another one is drawing on a piece of paper, with the help of an adult instructor who is sitting next to her and is wearing a face mask.
Yolanda Thomas works on an art project with the children at her day care at her home in Pittsburg on Dec. 14, 2022. Starting July 1, 2023, many parents who depend on subsidized child care may have to start paying fees for the first time since 2020. (Beth LaBerge/KQED)

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Update 11:20 a.m., Friday: If you’re a parent or caregiver who’s had your monthly fees for child care assistance programs waived during the pandemic, those fees will now continue to be waived until Sept. 30.

Gov. Gavin Newsom has agreed to extend financial aid for lower-income families who receive subsidies for child care for at least another three months.  As federal pandemic aid for these programs begins to expire, that relief was originally scheduled to go away starting July 1.

However, Gov. Newsom announced Thursday in his revised budget proposal for 2023–24 that the state will use $29.4 million in available federal funds to continue waiving these “family fees ” through September.

Legislators have sent the governor two bills that propose to establish a new sliding-scale fee structure, and Newsom has until May 19 to sign them.

Original story, April 26, 2023: During the pandemic, California made it easier for lower-income families to access child care by waiving monthly fees for numerous child care assistance programs. But starting July 1, that relief is scheduled to go away — which means these families may have to pay a lot more to keep their child care.

This is a complicated, evolving situation — and to make it even more complex, these changes could be halted by one or more legal measures in the works.

So if you or someone you know depends on state-subsidized child care, keep reading for how you could be affected, what you can do now to prepare for a potential increase in costs and what officials are doing in response to this situation. We’ll keep updating this guide as we know more.

Why is the cost of state-subsidized child care going up in California?

Since 1998, families who participate in various child care assistance programs in California have had to chip in a monthly fee — also called a co-payment — that is determined by their income level. These monthly fees are known as “family fees,” and they range from $36 per month to almost $600 per month.

At the start of the pandemic, California received permission from the federal government to waive family fees and temporarily stopped collecting them from families who already received subsidies for part-time or full-time child care.

California was able to waive these fees thanks to funds from the Coronavirus Response and Relief Supplemental Appropriations Act. That aid, however, is running out and the fee waiver is set to expire on June 30.

This means that starting July 1, families will once again have to pay this co-payment — unless the state extends the fee waiver, or changes the law around family fees.

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If child care fees return on July 1, which families would have to pay?

Federal rules allow states to set their own fees based on family size and income (PDF), so long as they’re affordable and don’t become a barrier to families receiving assistance.

Currently, to qualify for state-subsidized child care, a family must earn 85% or less of the state median household income. That’s an annual income of $82,102 for a family of three, and a $95,289 annual income for a family of four.

Those who earn less than 40% of that amount pay nothing for child care. Families earning between 40% and 85% of the state median income pay child care fees on a sliding scale (PDF) that could be as much as 10% of their household income.

The California Department of Social Services has reiterated, however, that families who earn 39% or below of the state median income, and families who receive CalWORKS cash aid, will not be required to pay fees after July 1. Families that are involved in Child Protective Services can have their family fees waived for another 12 months.

You can use the California Department of Social Service’s Child Care Family Fee Rate Calculator to see how much the monthly co-payment for state-subsidized child care would be, based on the number of people in your family and your monthly income.

Having trouble calculating your family’s monthly income? You can use this calculation worksheet, which also provides instructions for how to accurately add up income from irregular or seasonal work. You’ll also find instructions on how to include other sources of monthly income, including public assistance, disability or unemployment benefits and spousal support.

A father sits with his infant daughter on a couch. The father kisses his daughter on the forehead and the daughter smiles at the camera.
Advocates for child care and early education programs are recommending that parents start saving money, if they can, to prepare for the potential return of family fees on July 1. (Cavan Images/Getty Images)

What can families do right now amid this uncertainty?

Don’t make any big changes regarding your child’s care

Nina Buthee, executive director of nonprofit organization EveryChild California, says her message to families right now is “definitely hang in there” and sit tight — even though things may feel insecure.

“Don’t make any rash movement or move your child out of any program whatsoever, regardless of what this piece of paper says in terms of fees,” said Buthee, whose organization advocates for early care and education programs.

Buthee also believes it is very likely the state will reduce the fees, even without the support from the federal government — something EveryChild California, with others, is advocating for. See below for more information on the legal measures that could change the family fee situation in the next few months.

Consider saving what money you can to prepare for the potential return of family fees

Buthee recommends that if your family is able to “save some money,” you should do so.

And while you’re saving — if you’re able — “know that advocates and the Legislature are working very, very hard to make sure that family fees are waived at least until October 1 — and in addition, we’re hoping to get those reduced for the rest of the year,” said Buthee.

Make sure your family is getting all the benefits you’re entitled to

If your household is eligible to receive CalFresh food benefits, make sure you’re getting the funds you’re entitled to. You could qualify for more funds, especially if your income has gone down or your expenses have gone up. If this is your situation, contact your local social services office. See the income thresholds and maximum CalFresh monthly allotments (PDF) currently in effect through Sept. 30, 2023.

If you’re getting your full CalFresh allotment and are having problems securing food for your family now that the extra monthly pandemic payments have gone away, consult our list of alternative food assistance sources, including food banks and grocery box options.

Also be aware that if your family uses Medi-Cal, as of April you’ll need to recertify your eligibility to keep your Medi-Cal coverage for the first time since the pandemic began. Make sure your local social services office has your most up-to-date contact information, especially if you’ve moved during the pandemic. Read more about how to make sure you keep your Medi-Cal coverage.

What might change the situation with family fees?

Right now, Gov. Gavin Newsom has not included a proposal to continue waiving the family fee in his 2023–2024 budget. But there are two legal measures in the works that could change this situation.

The first is at the state level: California Assembly Leader Eloise Gómez Reyes proposes to suspend collecting these fees until the state implements an equitable sliding scale. This legislation would also address the way child care workers get reimbursed for providing subsidized care.

As for where this legislation currently stands, it was passed unanimously by the Assembly Committee on Human Services last month and is now being considered in the Committee on Education.

Reyes told KQED that California families are paying “up to 25% of their income” on these co-payments — families that have proven they meet the income thresholds to receive subsidized child care in the first place. “And yet we’re saying, yes, but you have to pay almost $600 a month per child to have your child taken care of,” said Reyes.

A previous bill by Reyes to lower the fees outright starting July 1 was vetoed by Newsom last year.

The second big development that could affect family fees is that on April 18, President Joe Biden signed a series of executive orders aimed at improving access to child care — and they include directing the U.S. Department of Health and Human Services to consider actions to reduce or eliminate co-payments for families benefiting from the federal Child Care and Development Block Grant (CCDBG) program.

Buthee of EveryChild California said the executive order is encouraging states to not impose fees upon those who earn 75% or less of the state median household income. For families who are above the 75th percentile, family fees would still be paid on a sliding scale — but Biden’s order states that the fees cannot exceed 7% of their household income. That’s because the federal government determined that child care that costs more than 7% of a household budget is considered unaffordable.

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The reason Biden’s executive order is so significant is that the clock is ticking in California: Last week, the state Department of Social Services and the Department of Education issued to providers the new family fee schedule that would go into effect starting July 1 (when California’s new fiscal year begins) because families need at least a 60-day notice. That said, it’s still unclear when the federal government could change the rules regarding these co-payments.

In the meantime, California child care advocates and lawmakers like Reyes have urged the state to request a federal extension to continue waiving the fees until Sept. 30, using any unspent funding from the Coronavirus Response and Relief Supplemental Appropriations Act, which originally enabled the family fee waiver. This would buy the state more time until the federal fiscal year begins on October 1, when the U.S. government may change the regulation regarding fees associated with child care programs such as the CCDBG.

On April 25, a spokesperson for the California Department of Social Services told KQED in an email that “[c]urrently, California does not have a pending proposal or request with the federal government regarding family fees.”

In short, it’s a waiting game. One update: On Wednesday, the state Senate signaled its support for Reyes’ bill by including in its 2023-24 budget proposal funding to overhaul the family fee structure “to prevent low-income families from losing access to child care because they cannot afford fees”.

If these fees return, how would California families be affected?

California Department of Social Services spokesperson Scott Murray told CalMatters that more than 26,000 families in various child care assistance programs “may have benefited from family fee waivers in the 2021-22 fiscal year.”

In a 2023 survey from EveryChild California of parents and guardians with children enrolled in state-subsidized child care, 56% of respondents said they would not be able to keep their child in their current program if family fees were reinstated.

Rachel Church, a single parent in San Francisco who works in customer service, depends on state-subsidized child care for her 6-year-old. She shared that before the pandemic, she was paying $200 a month on child care family fees. “I have food stamps and I work full time, and just making ends meet and living paycheck to paycheck, the family fee does become a burden,” said Church.

“When I have had to pay, it’s really, really challenging, even with a full-time schedule, having to make that payment,” she said.

Having to pay fees again “would definitely leave us without, I would think, food,” said Church. “Like, that’s the first thing that comes to mind.”

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At KQED News, we know that it can sometimes be hard to track down the answers to navigate life in the Bay Area in 2023. We’ve published clear, helpful explainers and guides about issues like COVID, how to cope with intense winter weather and how to exercise your right to protest safely.

So tell us: What do you need to know more about? Tell us, and you could see your question answered online or on social media. What you submit will make our reporting stronger, and help us decide what to cover here on our site, and on KQED Public Radio, too

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