DHW takes action to bridge budget shortfall for child care coverage

August 20, 2024

IDHW Communications

DHW took tough action this week to ensure that the costs of the Idaho Child Care Program (ICCP) do not exceed available funding for the current and upcoming fiscal years.

The Idaho Child Care Program (ICCP) provides child care assistance to working families by paying for a portion of child care. The parent's share is based on the size of the family and the amount of the family's income. By helping Idaho low-income families with child care, parents can work, complete job training, or finish school.
The program is projected to be over-budget, and DHW is taking measures to correct that.

What is DHW doing?

To bring the the Idaho Child Care Program in line with its Legislature-approved budget and to avoid budget shortfalls going forward, DHW is taking several actions.

• Starting Thursday, Aug. 22, DHW is temporarily pausing new enrollment into the ICCP program.
  • Benefits for current ICCP families are not affected by the enrollment pause and will continue as long as a family meets eligibility criteria.
  • During the temporary pause, DHW is not enrolling new children in the program, with the exception of the following vulnerable populations: families experiencing homelessness, families caring for a child with a disability, foster families, families receiving Temporary Assistance for Families in Idaho (TAFI), and families receiving preventative services through Child Welfare. If a new child is added to a current ICCP household, they can be enrolled in ICCP as long the household continues to meet the eligibility criteria and benefits are active.
• DHW is also delaying the implementation of increased reimbursement rates to child care providers until July 1, 2025 and will be adjusting the reimbursement rate percentile that DHW pays child care providers.
• Finally, DHW will be recovering administrative costs from ICCP-related contracts

When the temporary enrollment pause ends, eligibility thresholds to qualify for ICCP benefits will be modified. This will apply to new enrollees in the program. Existing enrollees will be subject to the new eligibility thresholds when re-evaluated (which occurs annually). For those determined ineligible, a yet-to-be-determined phase-out plan will occur.

Why is DHW taking these steps?

Several factors contributed to the current predicted shortfall. In recent years, DHW expanded eligibility standards, making more children eligible for the program, and increased reimbursement rates to providers. Meanwhile, this year's study of local market rates revealed what many already knew: child care costs have steeply increased. Funding increases are not keeping pace with the program's costs.

"We recognize that decisions like these are never easy, especially given the importance of access to affordable child care for both the workforce and for early childhood development," wrote DHW Director Alex Adams in an Aug. 14 letter to the chairs of the Legislature's Joint Finance-Appropriations Committee.

He also stressed that DHW understands the importance of child care for working families and is "committed to making sure Idaho's neediest families retain uninterrupted services."

"Our goals are to keep the enrollment pause as short as possible and keep as many children as possible eligible for this critical support," Adams wrote.

What do families and providers need to do?

Families currently enrolled in the Idaho Child Care Program are not affected by this pause, provided they remain eligible. The department will notify existing enrollees when it is time to complete re-evaluation. Families should be sure to complete re-evaluation on time and include all required documents.

Families interested in applying for child care coverage through the ICCP can monitor DHW's ICCP webpage, where the end of the pause will be announced. The department will notify providers when the temporary pause ends.

Child care providers can access the 2024 local market rate survey information here.

"Ultimately, we want to preserve as many families on this program as possible," Adams said. "We know we're short funds for the current and next fiscal years. That's why we need to implement a temporary pause in new enrollment.

"In our letter to legislators, we shared our worst case predicted shortfall. As we close out last year's budget and refine projections, we hope the shortage is less than predicted. If it is, we will minimize the impact on families by changing eligibility criteria as little as possible. This program serves our communities and Idaho's employers by keeping able-bodied Idahoans at work."

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