Effective March, 1 2019 the DHS Appendix C-4 will be revised to include the following changes recommended by the Federal Government:

1. Income Eligibility set at the federal maximum (85% of SMI)

• This will eliminate separate entry and exit thresholds and the graduated phase out.

2. Remove number of children in care as a criteria:

• The copayment structure will be based on household income and family size only. This will significantly reduce copayments for families with over one child in subsidized care.

3. Reduce the number of copayment bands

• Copayments will be calculated in 5% increments of State Median Income (SMI). This will reduce the number of copayment bands from 37 to 11.

4. Reduce maximum possible copayment amounts

• Copayments will not exceed 7% of family income. Federal studies show is the typical amount a private pay family pays for child care.

5. No families will see a copayment increase

• Most will see a decrease.

6. Zero copayments for families below the Federal Poverty Level

• This aligns with other federally funded child care programs such as Early Head Start.

This is the first revision of the C-4 that increases initial income eligibility and reduces family share copayments since 2004. These changes are intended to improve family functioning/stability as well as improve developmental outcomes for low income children.

Appendix C-4 (08AX005E)