A report by the Rutgers Center for Women and Work finds an additional 200,000 children would be covered if the state adopted the federal income threshold
Childcare is becoming increasingly unaffordable for working families in New Jersey, forcing some parents to spend 20% to 30% of their income. Others have quit their job or dropped to part-time to stay home with their children.
The Murphy Administration has invested $1 billion to improve childcare access since 2018, and new research reveals an area where the state could make an even bigger impact. A report by the Rutgers Center for Women and Work, a member of the First 1,000 Days Policy Coalition, reveals that changing the income requirement for childcare subsidies would help tens of thousands of working parents who are struggling to make ends meet.
"In New Jersey, a single mom with one child must earn less than $34,840 in order to qualify for subsidies," said Becky Logue-Conroy, a Research Analyst at the Rutgers Center for Women and Work and one of the report's authors. "But if we adopted the federal rule, that same mom could earn up to $74,317 and still receive subsidies. In a state where single moms spend nearly a third of their income on childcare, that's an enormous difference."
As part of the Child Care and Development Block Grant, states receive federal funding to help low-income working families pay for childcare, and each state has the flexibility to determine its own income threshold and work or education requirements. Despite having the third-highest cost of living, New Jersey is stricter than most states when it comes to awarding subsidies.
The researchers analyzed federal data to estimate how many children are covered now and how many more would be covered if New Jersey changed the requirements. They found:
- 17.7% of children under age 13 live in a household that qualifies for childcare subsidies based on the current income threshold, which is set at 200% of the federal poverty level. That's a total of 156,236 children statewide.
- 29.2% of children under age 13 would qualify if the state raised the threshold to 300% of the federal poverty level, as proposed in recent legislation (S2241/A1920). This change would cover an additional 102,287 children.
- 40.2% of children under age 13 would qualify if the state adopted the federal rule, which allows parents to earn up to 85% of their state's median income. This would cover an additional 199,362 children.
In addition to having a higher income threshold, New Jersey is also an outlier with its strict work and education requirements. Parents must be working at least 30 hours per week, or enrolled in school for at least 12 credits, or enrolled in job training for at least 20 hours per week, in order to qualify for childcare subsidies.
"New Jersey is one of only six states that require parents to work more than 25 hours per week," Logue-Conroy said. "Part-time workers and those with unstable schedules, such as fast food and retail workers, may have a hard time meeting the work requirement on a weekly basis. And most parents can only meet the education requirement if they are taking college courses. GED classes and ESL classes do not count under New Jersey's current rules."
Though the federal government recommends that families spend no more than 7% of their annual income on childcare, New Jersey families typically spend 10 to 15% for center-based care of infants and toddlers in most counties. The burden is even higher for some parents. Single moms with preschoolers struggle the most, spending 20% to 30% of their income on child are. Yet, many do not qualify for subsidies.
"Tens of thousands of New Jersey families are caught in the middle," said Debra Lancaster, Executive Director of the Rutgers Center for Women and Work. "They don't make enough money to be able to afford childcare without significant financial hardship, but under the state's current rules, they make too much money to qualify for assistance."
The report finds that South Jersey would see the biggest benefits if the state loosened the requirements for childcare subsidies, with thousands of low-income families in Atlantic, Cape May, Cumberland, and Salem counties potentially receiving assistance. Warren County, in North Jersey, is also high on the list.
Anchored by the Rutgers Center for Women and Work, the First 1,000 Days Policy Coalition is focused on supporting New Jersey's children and families during the crucial time between pregnancy and a child's second birthday. Research shows this is the most determinative period in their cognitive, socioemotional, and physical development.
