Child Care Providers to Get Faster Access to Subsidy Payments Under New Hochul-Approved Law

Child care providers in New York will soon be able to receive subsidy payments from their local social services agency through direct deposit, rather than by check, which is expected to cut out delays for those funds to be disbursed and collected. 

Gov. Kathy Hochul signed legislation Wednesday that will create that option, which previously wasn’t used statewide, and regularly led to a lag in deposits.

"Child care is key to our economic recovery from this pandemic, and this measure will expedite the delivery of funds to child care providers and alleviate the financial stress caused by potential delays in receiving subsidy payments," Hochul said.

The measure is expected to cut out some of the red tape that’s made it harder for child care providers to receive those payments, which the rely on for revenue. Checks can take weeks to make it to those providers, or longer if they get lost in the mail.

It’s also expected to make payments easier for providers in rural areas, where banks and other financial institutions can often be few and far between. 

Sheila Poole, the commissioner of the state Office of Children and Family Services, said the new law would be important to promote the fiscal health of the industry, which has lost thousands of providers statewide in recent years, according to state data.

“It is essential that we do everything possible to promote the fiscal health of these vital child care programs,” Poole said. “This is an important step in modernizing the system and eliminating an administrative hassle for child care programs and local social services districts alike.”

Subsidy payments are common for low-income parents who don’t have access to family or friends for child care in New York. 

New York allows those subsidies for families who earn less than twice the federal poverty level, which varies by the size of family. A single parent with one child would qualify if they earn less than about $35,000 each year, for example.

That goes both ways; many providers, particularly those who serve low-income and rural areas, rely on those subsidies to serve parents in their communities.

The legislation approved Wednesday will give the state up to a year to promulgate regulations that would allow local social services agencies, who distribute the subsidies, to send that money out through direct deposit. 

It was sponsored by Sen. Jabari Brisport, a Democrat who chairs the Committee on Children and Families, and Assm. Sarah Clark, a Democrat from Rochester. 

"Child care workers are forced to navigate a patchwork system that puts a massive administrative burden on their shoulders and leaves them unsure if they can afford to keep their doors open,” Brisport said. 

“Creating a unified payment system that enables them to receive subsidy payments faster, without the hassle of paper checks, is an exciting first step towards addressing these underlying causes of the child care crisis.”

Brisport is currently in the middle of developing legislation to create universal access to child care statewide, with a package of bills expected in the coming weeks. He just wrapped up a statewide tour to hear from parents and providers on the issue.

Hochul, as well, is expected to present proposals to expand access to child care in her executive budget proposal, which will be released in January.