State seeks to revise child-care subsidies

Posted: Tuesday, January 22, 2002

ANCHORAGE (AP) -- The state Department of Education is considering changes to the state child care subsidy system tht would help low income families save money.

The subsidies help cover child-care costs for parents working at low-paying jobs and for those just off welfare. The program covers part or most of the bill for close to 5,500 children statewide. It is funded largely with federal dollars and is budgeted to cost about $23 million this fiscal year.

Under the current system, a low-income parent who gets a raise at work can end up losing money because he or she must pay a much larger share of the child-care bill, said Yvonne Chase, deputy commissioner with the state Department of Education and Early Development.

The proposed new regulation would fix the problem by increasing the parent's share of the cost much more gradually, she said.

For instance, a single mother with one child and a net monthly income of $1,686 now pays 25 percent of the allowed child-care cost, $153.75 monthly. If the mom got a raise amounting to an extra $46 a month, she'd have to pay half the bill, $307.50. That's a loss of almost $108 a month.

In the proposed new system, the same mother would pay $110 a month, 5.5 percent of her gross income of $2,000. After getting the raise, she'd pay 6 percent, or $123.60. Her family would be $32 ahead each month.

The new system would base payments on a family's gross income rather than a percentage of child care costs. Officials say this will simplify the paperwork and approval process.

It also will free up parents to choose child care without regard to cost.

''What we would like parents to do is find the child care that best suits their children that is of high quality and not to be solely concerned with the cost of care,'' said Kelly Howell, associate coordinator of the Education Department's child-care program.

The lowest-income parents would pay 1 percent of their gross income for child care. At upper-income levels, parents would pay 20 percent.

The changes aren't expected to cost the state more money because some people at higher income levels will pay more for their child care than they do now, said Mike Huelsman, project coordinator at the Education Department.

If adopted by the state Board of Education, the new regulation would go into effect July 1.

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