Child Care State Reports . II. Affordability [6]

12/01/1999

  • Prices for child care vary considerably, by such factors as geographic area, type of provider and age of child.  Figure 3 shows the average monthly prices for child care in Salt Lake County, Utah.  Given that these are average prices, it is clear that many families pay more or less than this amount.
  • Centers in Salt Lake County, Utah charge an average of $392 per month for preschool care and $508 per month for infant care, as shown in Figure 3.  This means that a family with $15,000 in income and one preschool child in an average-priced center would spend close to one-third (31 percent) of its total monthly income on child care expenses.  Average-priced infant care would represent an even higher share (41 percent) of monthly income for a family earning $15,000.
  • Family child care homes in Utah charge an average of $345 per month for preschool children and $392 per month for infants.  This means that a family with $15,000 in income and one child in an average-priced family child care home would spend 28 percent of its monthly income on care for a preschool child or 31 percent for an infant.
  • Families who receive child care subsidies usually pay much smaller monthly co-payments rather than the full market rate.  In Utah, the state pays parents directly for their child care costs.  State payments to families are determined by actual provider charges, up to a maximum state rate, and then reduced by an adjustment (i.e., co-payment) amount.  The adjustment amount is determined by family size, adjusted gross income and the number of children in care.
    • For example, Utah would reduce its payment to a family of three with $15,000 in income and one child in care by $10, as shown in Figure 3.
    • In Utah, cash welfare (TANF) assistance is not counted as income in determining the family’s adjustment.  Payments to families receiving cash assistance and families with annual income below the poverty line are not reduced by a family adjustment.
  WITHOUT SUBSIDY WITH SUBSIDY
Average Monthly Prices
(Full Time Care)
% of Income
(Family Income of $15,000 Annually)
Monthly Adjustment*
(If receive subsidy)
% of Income*
(Family Income of $15,000 Annually)
Figure 3. Child Care Prices and Co-Payments for a Hypothetical Salt Lake County, Utah Family of Three Earning $15,000 with One Child in Care
INFANT (1 year)
Center-based $508 40.7% $10 0.8%
Family child care home** $392 31.3% $10 0.8%
PRESCHOOLER (4 years)
Center-based $392 31.3% $10 0.8%
Family child care home** $345 27.6% $10 0.8%

* State policy does not prevent providers from charging parents additional amounts, above the co-payment, if the providers’ rates exceed the state reimbursement level.  Figures in this table represent the minimum co-payment.

** Average prices for family homes contain prices for group homes.

Source:  Data collected by the Urban Institute from Child Care Resource and Referral~Metro, the child care resource and referral agency serving Salt Lake County, Utah, summer 1999.

  • State policy does not prevent providers from charging parents additional amounts if the providers’ rates exceed the state reimbursement level.  For example, the maximum CCDF rate for preschool center care in Salt Lake County, Utah is $378 per month7, which is $14 less than the $392 average price shown in Figure 3.  If the $14 differential is paid by the family, the total cost to the family is $24 per month, or more than twice official family adjustment of $10 shown in Figure 3.  If the fee is not charged to the family, the provider loses $14 per month for providing service to a subsidized child.  The differential could be much larger than $14 for some child care centers, including accredited centers and other centers with higher than average rates.