A program meant to help low-income families pay for child care changed this month to better support providers.
The change to the South Dakota Department of Social Services’ Child Care Assistance Program moved from an attendance-based policy to enrollment-based, which child care advocates say is welcome.
Department Secretary Matt Althoff said in a news release last month that the program is intended to serve “both families and providers in a way that can provide predictable payments that ease budgeting as well as the administrative burdens of program participation.”
The change took effect on Jan. 1.
The state’s child care subsidy programs have been under fire in recent years. Of the roughly 29,000 South Dakota children who qualify for subsidized child care, only 1,800 receive assistance — about 7%.
That low participation rate is compounded by the fact that child care providers often lose money when they accept state subsidies, Early Learner South Dakota Director Kayla Klein told South Dakota Searchlight last year.
“People tend to want paying parents and don’t want to deal with subsidies because there are so many flaws in the system,” Klein said at the time.
The previous assistance program policy reimbursed child care providers based on the hours a child was in child care, rather than for a full day. Many families don’t keep their children in day care for the entire time a provider is open.
If parents who are eligible for a subsidy picked up their child early, the provider wouldn’t get the full day’s amount, even though the spot was reserved for a full day.
“At the end of the day, the child spot still needs to be paid in full,” Klein said in a news release.
The switch to enrollment-based subsidies would cover the entire day, saving child care businesses money and allowing providers to better predict their bottom line, said Mike Bockorny, chair of the Economic Development Professionals Association, in a news release.
Child care advocates have cited a number of other policy and legislative changes that could boost South Dakota’s child care industry, including:
- Changing regulations that disqualify or discourage some low-income families — single parents, teen parents and homeless families — from the state subsidy program.
- Basing child care subsidy rates on true costs rather than market rates.
- Partnering with a national organization to analyze how the state is financially supporting the child care industry.
“This change is part of an ongoing effort to reduce barriers to Child Care Assistance participation,” Althoff said. “We will continue to look towards opportunities afforded through system modernization.”