Child care costs in NH by the numbers
Feeling overwhelmed by your child care bill? Data suggest you are not alone
Child care in New Hampshire is expensive. This is not just an opinion; there is empirical evidence that demonstrates the pinch parents are feeling when it comes to child care costs.
According to an April 2016 report issued by the Economic Policy Institute, a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions, the average annual cost of infant care in New Hampshire is $11,810 or $984 per month. Child care for older children is a bit less, but still comes in at $9,457 or $788 each month.
The report further showed New Hampshire is ranked 12th out of 50 states and the District of Columbia for most expensive infant care in the nation and that child care represents one of the biggest expenses families face.
To put the cost in context, infant care in New Hampshire costs just $2,659 less than in-state tuition for a four-year public college and just 6.8 percent less than the average rent, according to this study.
These costs generally render child care unaffordable for the typical New Hampshire family, according to the study.
“According to the U.S. Department of Health and Human Services (HHS), child care is affordable if it costs no more than 10 percent of a family’s income,” according to the ECI report. “By this standard, only 30.3 percent of New Hampshire families can afford infant care.”
For a household earning the median income in New Hampshire, which is roughly $81,800, infant care for one child takes up 14.4 percent of that family’s income in New Hampshire. And that’s of course even worse for families with two or more children.
“A typical family in New Hampshire would have to spend 26 percent of their income on child care for an infant and a four-year-old,” according to the ECI report.
To have an infant and a four-year-old in child care in New Hampshire would cost $21,267 per year or 67.8 percent more than the average rent in New Hampshire. Further, in five out of eight metropolitan and rural areas in New Hampshire, care for an infant and a four-year-old costs more than rent, according to the report.
“Child care is out of reach for low-wage workers,” according to the report. “A minimum-wage worker in New Hampshire would need to work full time for 41 weeks or from January to October, just to pay for child care for one infant.”
Lori Anderson, a program manager at Child and Family Services of New Hampshire, a private nonprofit that works to advance the well-being of children and families through a number of social services, said most of the families they work with in their home visiting programs don’t have formal child care because they don’t work and/or can’t afford it on the limited income they have.
But for the ones that do, they are usually only able to because they receive child care assistance through the state, which pays a portion — but very rarely all — of the cost, she said. These families are on Temporary Assistance for Needy Families (TANF) and are required to do a work-related activity or have a very low paying job to qualify.
“Even then, sometimes just the co-pays are too much for the families to afford because the day cares can charge the families the difference between their rate and the state reimbursement rate,” Anderson said.
“Also the amount of subsidy that is received is dependent on the number of hours worked, so if a family only works a part-time job they only qualify for part-time assistance and there are not many day cares that will take kids on part-time basis, especially for the rate that the state will reimburse.”
According to a sample scenario provided by the Department of Health and Human Services on its 2015 rate sheet, the maximum weekly standard rate for a child 18-35 months old who is authorized for full-time care and, thus full-time level assistance, is $205 per week. However, the provider in this scenario, charges $250 dollars per week. The child’s share of the cost, which varies and is determined by the state, in this scenario is $20 per week. That amount is subtracted from the weekly allotment — $205 — for a result of $185. That $185 is how much the state will pay the child care provider per week for that child. If the facility is one that requires a family to pay the difference, which in this case would be $45, that means that families receiving a scholarship would pay $65 per week in child care costs.
The reimbursement rates go down as the child gets older and are substantially less for licensed home-based child care and license exempt child care options. A license exempt facility is one that operates legally without a license.
Kristin Smith, a family demographer with the Carsey School of Public Policy, who has studied and written on the cost of child care for many years, said it may be time for people to start taking a hard look at some sort of public funding for pre-K education that focuses on a broader swath of the population, not just low-income populations.
She said this could include some sort of subsidy for businesses taking on a role in some child care costs for employees — though she said she recognizes that would be a tough sell for many of the small businesses in the state.
And the ECI report came to similar conclusions. According to the calculations in the report, child care reform that capped families’ child care expenses at 10 percent of their income would expand New Hampshire’s economy by 0.9 percent or $625 million in new economic activity.
“A typical New Hampshire family with an infant could save $3,627 on child care costs if we implemented this reform,” the report said. “This would free up 5.2 percent of their (post–child care) annual income to spend on other necessities.”
To check out the full ECI report, visit www.epi.org/child-care-costs-in-the-united-states and choose New Hampshire for the state.
Melanie Plenda is a full-time freelance journalist and mother living in Keene.