Department of Workforce Development

June 2, 1998

Media Advisory

The following is a response from the Department of Workforce Development to the Children's Defense Fund study released May 29. That study reportedly contains proposals for changes in Wisconsin's low-income family childcare subsidy eligibility levels and co-pay requirements.

We have not yet seen a copy of that Wisconsin portion of the study, entitled “Child Care Challenges.”

However, an accompanying Children's Defense Fund news release entitled “Parents Face Higher Tuition Costs for Quality Child Care Than for Public College” has been obtained and reviewed.

One of the comparisons they use in their national analysis is Dane County, in which they say child care tuition is $6,240 and public college tuition is $2,747.

It adds: “The report states that child care costs easily consume as much or more of low-income families’ budgets as rent or mortgage payments. A family with an infant and a four-year-old, with both parents working full-time at the minimum wage ($21,400) would spend about 30 per cent of their income on child care....”

Our Office of Child Care in the Economic Support Division has calculated the child care costs for a family of four (two parents and two children) earning the minimum wage and receiving a child care subsidy.

The family would pay between $142, or 7.6 per cent of income, and $206, or about 11 per cent of income, depending on whether they were using licensed or certified child care.

That is substantially less than the 30 per cent calculated by the Children's Defense Fund.

What also needs to be emphasized is that no state is more generous than Wisconsin with child care subsidies, and never before has Wisconsin made a greater investment in child care than it is doing now. That makes child care for low-income families a real bargain in this state.

A parent who makes a co-payment of $69 a month for her two children, for example, can get over $900 worth of services.

The state’s contribution ranges from 84 per cent to 98 per cent of actual child care costs per family. For example, for a family with one child, the co-payment amount can be as little as $3 a week and no more than $63 a week, depending on income levels.

It is available for as long as families need it, without a time limit.

To be eligible, family incomes at the time of enrollment must be no more than 165 per cent of the federal poverty level, and they can remain eligible as their income rises up to double the poverty level. For a family of three, for example, they qualify up to $22,000 in income, and remain eligible until their income reaches at least $26,650.

That’s very reasonable.

To those who claim individuals are choosing not to receive subsidized child care because of the required co-payment, we believe this is not reflected in reality, given that we know parents generally are choosing more expensive care.

We also think Wisconsin’s commitment to children is further demonstrated by its:

• elimination of significant waiting lists for child care subsidies that existed last year. This accomplishment was the result of the major financial commitment the state made to support this program.

• generous tax credits for individuals with dependent children.

• more generous benefits paid to individuals in W-2 subsidized positions.

W-2’s fairness should be determined by comparison with low-income families who work for a living, have not asked for public assistance, and have to fully assume their own child care cost. These families are the most realistic gauge of what’s fair.

Finally, we do share with the Children's Defense Fund the concern that not all individuals needing child care under this program are aware of it. For that reason, we are developing an agressive outreach program to address that problem.