Effective Implementation of Changes to Child Care Subsidy Policy Will Enable More Children and Families to Access Early Education

Good morning, Chairman Frumin, members of the Committee on Human Services, and staff. My name is Audrey Kasselman, and I am a Senior Policy Analyst at DC Action and the Under 3 DC coalition. I appreciate the opportunity to testify today. 

My testimony will focus on the Child Care Subsidy program and specifically the Department of Human Services’ (DHS’s) role in family application processes and implementing new policies from the Office of the State Superintendent of Education (OSSE). We are grateful for the Council’s continued commitment to strengthening the early childhood education system in DC.

The Child Care Subsidy program works

For families that currently participate, the Child Care Subsidy program provides access to free or low-cost high-quality early learning opportunities for their children. Families with a child care subsidy voucher who earn less than 150% of the federal poverty level (FPL), or $37,290 for a family of three, have a $0 co-pay – free child care. Families of three who make between 150% FPL and 300% FPL ($74,580) have co-pays based on OSSE’s sliding fee scale. These co-pays range from $3.24 per day to $12.27 per day, equaling between approximately $70 per month to $265 per month. 

Compare that to a private pay family, who, according to OSSE’s most recent Cost of Care report, pay on average over $2,000 per month for child care. $265 per month, at the highest end of the Child Care Subsidy co-pay rates, makes child care significantly more affordable for the families of 5,132 infants and toddlers in the District. 

The Child Care Subsidy program could have broader utilization

While it is clear that the Child Care Subsidy program works for participating families, there is great potential for the program to increase access to affordable, high-quality early learning opportunities for thousands more DC children. Currently, participation in the Child Care Subsidy Program is limited, even though the cost of child care is out of reach for many District families. As many as 24.4% of infants and toddlers in DC (approximately 5,900 babies) live in households with incomes less than 200% of the federal poverty line, indicating that many more families are likely income-eligible for the subsidy program than are currently enrolled, as DC’s eligibility extends to 300% FPL.

Underutilization of the Child Care Subsidy program relative to the eligible population could be due to a number of factors, including the number and location of subsidy- participating providers, insufficient publicity and awareness, reimbursement rates for providers that don’t match the cost of care, family challenges navigating the application process, or parent preference for alternative child care arrangements.

Challenges with the application process hinder participation

Families can apply for the Child Care Subsidy program in person at a DHS processing center, in person at a Level II child care provider, or through OSSE’s online application. Historically, across application types, it takes too long for a Child Care Subsidy application to be processed. For the purposes of this testimony, I am going to focus on the family application process at DHS. Some families have shared stories with the Under 3 DC Coalition of waiting up to two to three months for their application to be approved. This means months without child care for an infant or toddler, which, for many parents, means they are unable to work or continue their education. In some cases, if an application is not assigned a DHS case worker by the agency within 30 days, a parent has to start over and resubmit their application, which is both frustrating and financially harmful.

In addition to lengthy processing times, the application itself can be burdensome. For many families, the application has required significant paperwork documenting income, residency, citizenship, work or education status, and more, even for families who are already enrolled in other DHS-administered programs and already have paperwork on file. Fortunately, these challenges have been taken seriously by OSSE.

Recent policy changes have improved the child care subsidy program and application

While parent experience navigating the Child Care subsidy application process has been historically full of obstacles, OSSE’s recent updates to its Child Care Subsidy Policy Manual, in line with the District’s FY25-FY27 Child Care and Development Fund (CCDF) State Plan, simplify the process. The updated manual includes a number of key changes that, if implemented well, will make high-quality, affordable child care more accessible via the Child Care Subsidy program. The updated manual requires a number of changes to DHS eligibility and application processes. Again, if implemented well, these changes would make more families eligible to receive child care subsidies and make the application process and timeline easier to navigate, hopefully resulting in fewer stories of long wait times and burdensome paperwork as described earlier. The key changes to the manual include: 

Simplified eligibility criteria and $0 co-pays for more families help more children. According to the updated manual, parents are no longer required to participate in work or education activities if their child(ren) has a qualifying need through a special circumstance.¹ Families who do need to work or be in school to qualify no longer need to meet a minimum-hour requirement (which was previously 20 hours). Time-consuming and logistically difficult in-person family interviews are no longer part of the application process, and documentation can be legible, including electronic copies. 

The manual also makes more families eligible for $0 co-pays, including for children who:

• Qualify under child protective services; 
• Have disabilities or whose parents or guardians have disabilities;
• Are in families experiencing homelessness;
• Have teen parents or elder caregivers; 
• Are in families experiencing domestic or family violence; 
• Have parents or guardians participating in addiction recovery programs; 
• Are enrolled in Head Start, Early Head Start, or the Quality Improvement Network (QIN); 
• Are in families receiving TANF; 
• Where parents are engaged in job search activities; and
• Come from families with income below 150% of the FPL.

Simplified and expanded eligibility criteria for families, as well as the elimination of some paperwork and in-person application burdens, will enable the parents of more children to face fewer barriers to accessing the quality care and education their children deserve. More $0 co-pays eliminate the financial burden of child care for families in the most challenging circumstances.

Excluding income for staff employed at licensed child development facilities improves educators’ finances. The new manual requires OSSE and DHS to exclude any income earned from employment at a licensed child development facility when calculating family income for subsidy eligibility. This means that early educators can now qualify for child care subsidies for their own families if they are DC residents and any additional household income is below 300% of the FPL ($74,580 for a family of three). In addition to more early educators being able to afford child care, this policy change means less missed work, increased financial stability, and access to high-quality licensed child care programs that may have been previously out of financial reach. This policy change has a broader impact as well. If more early educators have access to affordable child care and can attend work consistently, families and the children in their care will have fewer child care disruptions, which results in a better educational experience for children. 

Requiring faster processing of family child care subsidy applications gets children into child care sooner. Under the new guidelines, OSSE states that DHS eligibility workers must determine a family’s subsidy eligibility within 10 business days of receiving a complete application. Before this change, delays in application processing had serious consequences for families and child care providers. Families were left without care for extended periods, often risking their employment or schooling, while providers lost revenue when spaces remained unfilled. We are hopeful that faster application processing will encourage more child care operators to apply to participate in the subsidy program, increasing the supply of affordable early learning seats that has been stagnant for far too long.   

Streamlined enrollment for certain populations makes child care more equitable. The manual intends to speed up enrollment in the Child Care Subsidy program for children in child protective services; experiencing homelessness; enrolled in Head Start, Early Head Start, or QIN; and in families experiencing domestic violence. Once parents submit their application and one short required document verifying they are part of any of these populations, they are temporarily approved for a child care subsidy and can enroll in a program. They then have 60 calendar days to provide any other necessary paperwork. This quick approval process is effectively “presumptive eligibility” and can greatly  improve access to affordable, high-quality child care, without the long wait times families currently face.

Effective implementation of updated child care subsidy policies is critical

These policy changes are significant and can potentially reduce administrative burden at DHS and increase program efficiency while expanding access to affordable child care for families with low incomes. DHS plays a critical role in now smoothly implementing the eligibility and application process changes to the District’s Child Care Subsidy program. 

Given that OSSE’s updated policy manual went into effect October 1, 2024, DC Action would like to better understand DHS’s implementation and training plan around these changes. We look forward to working with this committee to ensure that DHS staff are well-equipped to handle the streamlined application process, processing completed applications within 10 business days, fast-tracking applications for certain populations, and excluding income earned at licensed child development facilities from eligibility determinations. Ensuring full implementation will be critical for the success of the program, for ensuring that more families can access critical child care services in a timely manner, and for easing the administrative workload on the agency. 

When our team spoke to DHS staff earlier this year, the staff stated that applications were being processed in a timely manner and that families were largely not struggling with the application process. We hope that is true and can be verified with data demonstrating the effective implementation of the policy manual changes that ensure parents’ needs – and opportunities for agency efficiency – are being met. It is imperative for this new Committee on Human Services to center the voices and needs of families as it evaluates DHS’ success administering subsidy enrollment changes so past barriers to the program are not replicated.

Data is needed  to monitor progress

To understand how the OSSE policy manual updates are effectively reducing administrative burden and making it easier for families to access the Child Care Subsidy program, we recommend this committee request collection of the following data points from DHS on a quarterly basis through this and the following fiscal year

1. Percentage of subsidy applications approved within the required 10-day completion window. Of applications that are not approved within the 10-day completion window, the frequency of, and reason(s) for, the processing delay.
2. Of families who have a “qualifying need” that makes them eligible for the 60-day grace period to submit additional documentation to determine their subsidy eligibility:
   • Percentage of these families who required and were granted a 60-day grace period to verify their qualifying need
   • Percentage of subsidy applications ultimately approved following the grace period to submit additional documentation
   • Quarterly number of families in each category of qualifying need who were not required to submit additional documentation (automatically fully approved) and the number who did require and were granted a grace period to submit additional documentation to demonstrate qualifying need
     • Children in the Quality Improvement Network
     • Children in Head Start or Early Head Start
     • Children experiencing homelessness
     • Children in protective services
     • Children in families experiencing domestic violence 
   • Quarterly number of families in each category of qualifying need who were ultimately approved – and, separately, the number denied – for the child care subsidy program following the  grace period to submit additional documentation:
     • Children in the Quality Improvement Network
     • Children in Head Start or Early Head Start
     • Children experiencing homelessness
     • Children in protective services
     • Children in families experiencing domestic violence
3. The number of families approved for $0 co-pays in each category:
   • Children with a disability
   • Children whose parents/guardians have a disability
   • Children in families experiencing homelessness
   • Children of teen parents
   • Children of elderly caregivers 
   • Children in the Quality Improvement Network
   • Children in Head Start or Early Head Start
   • Children in protective services
   • Children in families experiencing domestic violence 
   • Children who have parents or guardians participating in addiction recovery programs
   • Children whose families are receiving TANF or who come from families with income below 150% of the Federal Poverty Line
4. Description of DHS efforts to reduce processing errors or delays. The agency should provide the committee with copies of any print or electronic materials used to train DHS staff, Level II child care providers, and others involved in promoting or processing child care subsidy programs or applications.
5. Description of DHS efforts to educate the public, including families receiving additional benefits or services from DHS, about the child care subsidy program’s eligibility and application processing changes.
6. The number and representative percentage of households with children receiving SNAP, TANF, or WIC benefits (reported separately) who are also enrolled in the child care subsidy program.
7. The number and representative percentage of households with children receiving housing support services through DHS (e.g. families using rapid rehousing, permanent supportive housing, career map, etc.) who are also enrolled in the child care subsidy program, broken out by type of housing support received.
8. Quarterly or annual family enrollment in the subsidy program after implementation of manual changes compared to previous periods, broken down by the number of families who are or were using a subsidy for a child ages 0 to 3, ages 3 to 4 (pre-kindergarten), and ages 5 and up.
   • Subset of subsidy enrollment families where one or more parent’s income is exempted due to employment by or operation of an OSSE-licensed child development facility.
9. Quarterly or annual subsidy application processing caseload per DHS Child Care Services Division employee after implementation of manual changes compared to previous periods.
10. Quarterly or annual number of child care subsidy program applications that were started but not completed after implementation of manual changes compared to previous periods.
11. Quarterly or annual number of started and completed child care subsidy applications after implementation of the manual changes compared to previous periods.
12. Quarterly average processing and approval timelines of child care subsidy program applications beginning October 1, 2024.
    • Quarterly child care subsidy application processing and approval timelines in FY24, prior to the implementation of policy manual changes.

Tracking these benchmarks will help DHS, OSSE, and the Council assess the success of the recent equity-oriented reforms and identify any areas that may need further attention to improve program accessibility. We are confident that these changes, if implemented effectively, will significantly expand access to affordable, high-quality child care for the families that need it most. 

Thank you for the opportunity to testify. I welcome any questions.