An Overview of the Law on Child Care Co-payments

June 1, 2008

Author: Susan C. Antos

Federal Law:

(5) Sliding fee scale: The State plan shall provide that the State will establish and periodically revise, by rule, a sliding fee scale that provides for cost sharing by the families that receive child care services for which assistance is provided under this subchapter.42 U.S.C. 9858c(c)(5).

Federal Regulations:

45 C.F.R. 98.42: Sliding fee scales

(a)  Lead Agencies shall establish, and periodically revise, by rule, a sliding fee scale(s) that provides for cost sharing by families that receive CCDF child care services;

(b)  A sliding fee scale(s) shall be based on income and the size of the family and may be based on other factors as appropriate;

(c)  Lead Agencies may waive contributions from families whose incomes are at or below the poverty level for a family of the same size.

45 C.F.R. 98.43: Equal Access

(a)  The Lead Agency shall certify that the payment rates for the provision of child care services under this part are sufficient to ensure equal access, for eligible families in the area served by the Lead Agency, to child care services comparable to those provided to families not eligible to receive CCDF assistance or child care assistance under any other Federal, State, or tribal programs.

(b)  The Lead Agency shall provide a summary of the facts relied on to determine that its payment rates ensure equal access. At a minimum, the summary shall include facts showing: 

... (3)  How copayments based on a sliding fee scale are affordable, as stipulated at § 98.42 

Note: The commentary accompanying this regulation provides the following guidance:: “... in our view, co-payment scales that require a low-income family to pay no more than ten percent of its income for child care, no matter how many children are in care, will help ensure equal access.” 63 Fed. Reg. 39960 (7/24/98). Further, in response to a comment that the flexibility given states on co-payments is contradictory to a position that the co-payment should be more than 10%, HHS responds, “we view ten percent as the appropriate upper limit for co-payments; and as stipulated in the regulations, a Lead Agency can waive the co-payment for families at or below the poverty level (98.42(c)) or for children in protective services.” 63 Fed. Reg. 39961 (7/24/98).

New York State Law:

Pursuant to Department regulations, child care assistance shall be provided on a sliding scale, based upon the family’s ability to pay. Social Services Law 410- x(6).

New York State regulations:

(f)  Family share

(l)  Each family receiving child care services, with the exception of a family where the parent(s) or relative(s) is receiving public assistance, must contribute toward the costs of such services by paying a family share based upon the family’s income. A family share also may be required of any family to recoup an overpayment for a child care services regardless of whether any member of the family is receiving public assistance.

(2)  The income-based portion of the family share for child care services must be determined by the social services district in accordance with a sliding fee scale developed pursuant to paragraph (3) of this subdivision. The overpayment portion of the family share, if any, must be reflected separately from any income based portion of the family share and must be determined in accordance with section 415.4(i) of this Part.

(3)  The sliding fee scale developed by the social services district must be calculated by subtracting the State income standard, as defined in section 415.1(k) of this Part, for the specific family size of the eligible family from the annual gross income of the eligible family, multiplying the remaining income by a factor of 10 to 35 percent, as selected by the social services district and included in the district’s consolidated services plan or integrated county plan, and dividing the product by 52 to determine a weekly family share. The same percentage factor must be used for all families receiving child care services which are required to pay an income-based portion of a family share. 18 NYCRR 415.3(f)

(k)  State income standard means the most recent Federal income official poverty line, as defined and actually revised by the United States Department of Health and Human Services under the authority of 42 U.S.C. 9902(2), updated by the department for a family size of four and adjusted by the department for family size. 18 NYCRR 415.1(k)