The Department of Early Education and Care (EEC) adopted a new, first-in-the-nation, parent co-pay model that will dramatically reduce child care payments for families receiving state subsidies by exempting family income up to the federal poverty level.
The Board of Early Education and Care approved a parent co-pay schedule that will reduce the average co-payment for families from 10% to 2.4% of their overall monthly income. This change marks a substantive step forward in EEC’s efforts to make child care more accessible and affordable to families across the Commonwealth. Since March 2020, EEC has fully covered the cost of co-payments for families receiving state subsidies during the current public health crisis, totaling more than $43 million.
Over the last year, EEC worked with the Urban Institute, a national organization with expertise in child care subsidies, and with other family and child care provider advocates to develop the new co-pay model. Under the leadership of Commissioner Samantha Aigner-Treworgy – who was appointed in August 2019 – the fee scale is the first in the country to address the impact of co-payments on the lowest income families by creating the federal poverty level exemption.
“This progressive reform will not only provide relief to most families that are eligible for child care subsidies, it will also ensure consistency and fairness in parent contributions as their income rises,” said Education Secretary James Peyser.
Co-payments are based on a percent of each family’s income above the poverty threshold that ranges from 4% to 15% of eligible income, and parent co-pays will only be required when a family’s income rises above the threshold.
The percentage of families in Massachusetts required to pay a co-pay is expected to drop from 72% to 58%, and 98% of these families will now pay a co-pay of 7% or less than their overall income, the federal benchmark of child care affordability.
The new model uses a co-pay schedule built on 28 incremental income ranges by family size, spanning incomes from 100% of the poverty threshold to 85% of state median income, which is the maximum income eligible for child care subsidies under federal regulations. When considered as a percent of families’ full income, co-pays are expected to range from <0.01% to 12% of a family’s full income for the vast majority (99%) of families above the poverty threshold. Co-pays for siblings are also charged at a discounted rate.
EEC will build an online calculator and develop additional technology to support implementation of the new parent co-pay schedule.
EEC licenses 6,700 child care providers, with capacity to care for 200,000 children aged birth to 15 years old. EEC provides child care subsidies that support approximately 55,000 children each month.