LINCOLN, Neb. (AP) — Nebraska parents could soon have the ability to take a pay raise and keep their child care subsidy.
A bill introduced by Sen. Tanya Cook, of Omaha, would disregard 10 percent of income when determining eligibility for Nebraska's child care subsidy program. The disregard would apply after 12 continuous months on the program.
Cook wants to remove any deterrent for people to work hard, move up in an organization and get a pay raise.
"If you made even $1 more than the top income requirement for the childcare subsidy heretofore, then you are entirely ineligible to receive the subsidy," Cook said.
Last year, lawmakers voted to increase the eligibility to 125 percent or less of the federal poverty guidelines. Starting July 1, the eligibility will increase to 130 percent, regardless of the changes made by this bill.
The bill faces one more vote from lawmakers, the last of three required approval votes by the Legislature.
To qualify for the subsidy, the parent or parents must need the child care because they are employed, in school or going to medical appointments or counseling for themselves or a child. A parent could also qualify if a doctor says they are incapacitated.
Families below 100 percent of the poverty level have their child care costs fully covered. Families above 100 percent of the federal poverty level share child care costs with the state, with the amount varying depending on the number of parents and children. Most people are only using the subsidy for seven months, Cook said.
The Department of Health and Human Services only pays the subsidy to approved child care providers, such as licensed child care centers or homes.
Toni Liddy, a single mother to four children in Lincoln, used the child care subsidy when her children were younger.
Knowing that your children are cared for frees up your mind for work or school, she said. Liddy was also going to school at the time and accepting a pay increase caused her to lose the subsidy.
"A dollar or two an hour doesn't make up the cost to have child care," she said.
The bill is a "wonderful opportunity for people that are trying to become contributors to their society financially," she said and it's a chance for the government to recognize those trying to bring themselves out of poverty need a fighting chance.
Aubrey Mancuso, policy coordinator for economic stability and health at Voices for Children in Nebraska, said the bill addresses the cliff effect, which encourages people to stay at a lower income to keep their subsidy eligibility.
In 2012, about 81 percent of children had all available parents in the workforce, according to her organization's 2013 Kids Count in Nebraska report. That means both parents were working in a two-parent household and the sole parent was working in a single-parent household.
Affordable child care helps parents work and ensures kids are safe, Mancuso said.
There needs to be a long-term vision when thinking about the quality of care for all children in the state, she said.
"With the reality of working parents, really kids are starting in a setting that should have some quality standards relating to education a lot earlier than kindergarten," she said.
John Levy, executive director of Heart Ministry Center in Omaha, said some of the people the center serves — mostly single mothers — rely on the subsidy. The center's programs include a pantry and medical clinic in partnership with Creighton University.
They have to decide between a raise, which shows that they are being self-sufficient, or make the smart financial decision and not take the raise, he said.
Child care is a large chunk of any family's budget, Cook said. Day care for infant children costs an average of $7,800 a year in Nebraska, according to a report by Child Care Aware of America.
Cook hopes the bill can be used for families in transition, maybe from a divorce, job loss or health crisis.
"My hope is that we'll give them some breathing room," Cook said.
The bill is LB359