What Can Be Done: Providers Not Fully Paid by Parent Subsidy Programs

6a0133f3fc5805970b01bb0844f429970d-320wiFamily child care providers face a widespread problem across the country: they care for subsidized parents but don’t get fully paid for their work.

I hear this everywhere I travel.

* Providers enroll families applying for subsidy payments, who are later declared ineligible, and the provider doesn’t get paid.

* Providers enroll subsidized families and payments are delayed.

* Subsidized parents who are once eligible, become ineligible, but providers don’t learn about it until after they have delivered weeks or months of child care for which they don’t get paid.

* Providers don’t get paid when children don’t attend or when they work extra hours. Providers are prohibited from enforcing their own payment rules.

As a result, providers caring for subsidized families lose hundreds and in some cases thousands of dollars each year.

In many situations providers are forced to choose between delivering child care without a guarantee of being paid or refusing to care for low income families in need.

This is intolerable.

The issues involving caring for subsidized families are complicated and present no easy solution. State rules regarding the subsidy program vary widely from one state to another.

Here is a four-step process that may help address this problem.

Step I: Learn the Rule

Providers who care for subsidized families need to know the rules of their local subsidy program.

Ask these questions of your subsidy program:

May I charge parents one-two weeks in advance before receiving a subsidy payment?

May I charge parents for the last two weeks of care, in advance?

May I charge a registration fee, late pick up fees, supply fees, etc. (assuming I treat private pay parents the same)?

May I found out the deadlines for parents submitting paperwork and be informed if they fail to meet their deadlines?

If you are told you cannot, ask to see a copy of the written rule. Some subsidy program allow providers to charge parents in advance, some don’t. Sometimes subsidy program workers don’t know their own rules.

When you enter into an agreement with a subsidy program, you must follow their rules, even if they are different from your own.

Step 2: Identify Problem Areas and Negotiate Changes

Once you understand what the rules are, the next step is to identify problem areas and negotiate with the subsidy program to make changes that will resolve them.

There are times when subsidy program rules are not clear, or they interpret rules differently than you believe they should. Sometimes subsidy programs unnecessarily delay payments, or subsidy workers give providers false information about parents’ eligibility.

I would recommend that local/state family child care associations collect stories from providers about their experiences with the subsidy program. It is difficult for an individual provider to push for change.

Then your association should ask for a meeting with your local/state subsidy program officials and present the concerns of providers (anonymously). Present your solutions. They may include: Payments made with two weeks of completed paperwork, ability to charge parents in advance, written notice sent to all providers about their rights under the subsidy program, payments to providers for two weeks of care after parent is notified they are ineligible, etc.

If your local subsidy workers are not receptive to your suggestions, contact the state subsidy agency and ask for a similar meeting.

If your state subsidy agency won’t listen, contact your state representative about the failure of this program to properly follow their own rules, or fix unnecessary delays, or inform providers of their rights, etc.

Step 3: Lobby for Change

If you are still not satisfied with how the subsidy program is being operated, you may want to consider lobbying for changes in the state rules. They will probably require a change in the state law that can only be done through your state legislature.

You may want to lobby for the program to issue payments through electronic bank transfers, so providers can receive timely payments. Or have the state make advance payments to providers that they can use as credit for child care services delivered later. Or mandate that subsidy checks be issued at a faster rate.

If a state rule clearly allows providers to deliver care that the state will not pay for, it’s time to change the rule.

Lobbying for a change in state laws will require the efforts of organizations, not just individuals. Your state family child care association, state chapter of the Association for the Education of Young Children, and other parent/child care organizations should be approached as allies.


One of the reasons why providers don’t get fully paid by state subsidy programs is because there is no consequence for their actions. They get away with it because the child care field is too weak to bring enough pressure to bear to change things.

Change can occur with enough persistence and pressure. Current conditions should not be allowed to continue.

In this article I’ve not dealt with the problem of low subsidy rates, which is the subject of a later blog article.

Tom Copeland – www.tomcopelandblog.com

Image credit: https://www.flickr.com/photos/tracy_olson/

Categories: Advocacy, Contracts & Policies

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