When Someone else Pays the Daycare Bill

I loved watching the Jensen kids. Four very bright children they made my day full and exciting. Although they were on daycare assistance, I was OK with $125 per week per child because they were well behaved and left before 5 PM, which left me with fewer kids to handle while making dinner. It usually takes at least 2 months before getting paid for the first time for a state client, because you can only bill at the end of the month and it can take up to 45 days for the state to issue a check. I was so looking forward to spending the $3800 the State of Iowa owed me. Instead of a check however, I got a notice that their daycare bill would not be paid. As luck would have it, mom had not turned in her pay stubs showing a substantial raise. The result was that her assistance was cancelled back to the day she applied. So all of the money that I counted on to pay my staff and my property taxes which were due was gone. I was going to have to borrow against the hubby’s 401K to even make it work. This was one of those days when I wanted to meet every parent at the door and tell them I was giving my 2-week’s notice. It seemed no matter how hard I worked I ended up struggling more than I would just staying home and living off my husband’s paycheck. The biggest disappointment was when mom announced since there was no way she could pay all the past due bill, she was simply going to move home to mom and send payments. Two years later and I haven’t seen .10c, let alone $3800.00. I could sue her, but she doesn’t have anything so I would simply be throwing good money after bad. Chalk it up to stupidity.

If you are a parent who qualifies for daycare assistance from the State or any other agency, you have a much more complicated road ahead when finding daycare. This can also be true if someone in your family or your employer is paying your childcare bill. Let’s start with different kinds of public and private assistance and move on form there.

In the US, each state has its own program for daycare assistance. You can find the number for your state’s program in the appendix of this book. Before finding daycare you will need to find out from the state what its requirements are. Some State assistance programs will pay for a provider who is not registered, such as your mom staying home with the grandkids. Some State programs only reimburse providers with a state contract. Almost every state requires that you choose a provider to put on your application. This means you should interview and select a provider and a back-up to put on the application for daycare, so that when one provider goes on vacation your back-up provider can bill the state with no issues or extra paperwork.

You will need to complete your application for assistance with all the relevant paperwork. Most states require you provide copies of your child’s birth certificate as well as copies of your paystubs for the last 30 days and any court orders for child support you receive. It can take up to 45 days to get a decision back, so the sooner you apply the better. If you hire a provider before your baby is born, make sure they accept state assistance if you are planning on applying for it.

When you are using state assistance there are a few things you have to remember. First, your assistance will only pay for childcare for the things you are approved for. If your notice of decisions says that you are approved for work hours for 2 units a day, each unit is for up to five hours. However, if you only work seven hours you cannot run errands or have lunch with friends and expect your provider to bill the state. Providers are required to keep an accurate record of when your child arrives and leaves. Your assistance worker has the right to compare those hours with your work hours at any time to make sure that you and your provider are being honest.

Your notice of decision from the state will have requirements listed that you must comply with. These include sending in your paystubs at regular intervals, notifying the state if you move, change employment or have a change in circumstance such as getting married or getting a new job. Failure to comply with these will result in cancellation of your coverage, which means your provider will get a notice in the mail letting her know that your daycare bill is no longer being covered. It then can take weeks to get re-approved and in the meantime you will need to pay for childcare out of your pocket.

In addition, your provider will have a list of requirements she will need to fulfill. She will be keeping track of when your child is there and sending in monthly invoices. It is important you know what she is claiming for hours. There will be a form for you to sign verifying your child’s hours. Do not sign blank forms for the state for your provider. If she claims more hours than your child was there and your signature is on that form, you will be in trouble and possibly lose your daycare assistance. She should have the forms all filled out before you sign them. If she is keeping records every day there should be no problem.

If you want to be really organized, each time you fill out a change form or application for the state, give a stamped copy of it to your provider for your child’s file. This will help her to get paid faster if there is ever a problem with your approval.

Some individuals on daycare assistance have a co-pay. This is an amount that is your responsibility. It is crucial that you make sure this portion is paid on time and in-full. If you can arrange it, pay for your co-pay for 2-4 weeks at a time. It can take up to 3 months for your provider to get paid by the state for the first time, and your co-pay will help at least with feeding your child until the first state check arrives. But as state billing is done after the fact, it is an entire month before your provider can bill them for watching your child. It can then take up to 45 days to receive a check.

The next type of childcare assistance is through Promise Jobs, or other unemployment agencies. This type of assistance is to help individuals who need temporary childcare assistance while going to school or job training, interviewing or working an apprenticeship or other short term employment related items.

The military also has childcare assistance, but theirs is very tricky. For example, in Iowa home providers are registered, not licensed. Same inspection and more training, but because they do not have the title license the military will not reimburse for in home childcare in Iowa. You can find the contact information about military daycare assistance in the back as well. The great thing about Military childcare assistance is that their income guidelines are much higher.

If your employer reimburses for childcare, inquire well before your baby is born how it works. If your child is due before the end of the tax year, ask about filling out the forms and having any pre-tax deductions in a flex plan come out now. That way when you find a provider and have to pay a deposit and the first week or month of care you will be ready to start getting money back in your check right away.

If you are relying on family or others for help with your childcare bill, let them know as far ahead as you can who you have chosen and if you are comfortable with doing so, include them in the decision. Make sure you are clear about the terms of their help and how long they will be helping for, so you can prepare for when the bill will revert back to you. Make sure if you are asking family for help that you have made every effort to help yourself, to include applying for childcare assistance with State and County agencies, so that they can see that you are making an honest effort not to put this bill off on them. Make a plan for getting yourself independent and make a plan for repaying the daycare help if you can, even if it is through cleaning their house or watching their children. And express to them constantly how much you appreciate the help, because it is a large expense for someone else to take on your behalf.

When you interview with your new provider, these items must be included in the discussion. Be prepared to pay a deposit for your childcare, even if you are on assistance. Most providers now charge a deposit to everyone, because parents who are on assistance often lose their assistance with no notice, and the provider is left with bills to pay and no income to cover them.

Check with your provider on a regular basis to make sure your assistance is getting paid. By asking how things are going you can find out right away if there is a problem and be proactive with your case worker or responsible party to get your provider paid.

If you are a parent whose estranged spouse is supposed to be paying your daycare bill, be prepared to pay if your ex does not come through. It is not your provider’s fault if for any reason your ex decides not to hold up his end of the bargain, and she still deserves to be paid on time and in full. Use an advance on a credit card if you have to, but make sure your bill gets taken care of. The only thing worse for a child than divorce is divorce and then hopping from one daycare to another because daddy (or mommy) hasn’t paid the bill. If at all possible have your ex pay you ahead of time or pay the provider by the month in order to lessen any issues that may come up.

If something goes wrong, don’t panic. Be honest with your provider and tell them as soon as you know there is an issue. Offer to make payments to take care of your bill and do not be offended if your provider asks for a late fee. After all, the bills she will be paying late are going to charge her late fees for your lateness. It doesn’t matter whose fault it is, it isn’t your providers. Providers get taken every day by irresponsible people who run up a bill and then make excuses for not paying it. It is frustrating to be a provider who has a mortgage payment due and 2-3 parents who haven’t paid their bill yet. It can make for some very sleepless nights for them, which doesn’t leave them in the best frame of mind to be caring for your child. Remember that caring about your provider will make them more likely to care about you when you need something, such as extra time to work late or help with a problem with your child that is above and beyond their purview.

The bottom line with daycare is that it is a service you cannot live without. No matter who is responsible for paying, you still need to make sure that payment is getting to your provider in a timely fashion and step up to the plate when need be to make her feel secure about keeping your child. Nothing makes a provider give notice faster than having to fight to see a paycheck.

Before you apply for childcare assistance, get together everything you may need in a folder or envelope. The following items are things most state and local assistance agencies will want in order to process your application:

1. Proof of Identity: Place your driver’s license, copy of your birth certificate and Social Security card in the envelope. These will also work for number 2 and number 3.

2. Proof of Citizenship

3. Tax Identification: Most state agencies get the money for daycare assistance from federal dollars. They have to keep your information and report it in order to receive these funds. Place everyone’s social security cards in the envelope.

4. Proof of relation: If the children you want assistance for are your own, place their birth certificates in the envelope. If they are foster children, DHS will give you paperwork to use. If you are a guardian, place a copy of the court order in the envelope.

5. Proof of Income: Make sure you have your last 30 days of paystubs. If you are military use your last 4 LES’s. If you receive child support, you must include this income and need a copy of the order for their records. The same is true of any other income, such as retirement, alimony and royalties or interest income. Foster and crisis care reimbursement is not considered income, and does not need to be listed. If you are self-employed you can provide your last year’s income tax report.

6. Proof of what the assistance is for: If you are starting a new job, ask your employer for a letter on their letterhead. The letter needs to state when you will be starting, how many hours a week you will be working, what your schedule will be if it is set, and how much per hour you will be getting paid. If you are already working, you need a copy of your last schedule, and your paystubs will serve to prove your income and hours worked. If you are asking for assistance in order to use daycare while you look for a job you don’t need paperwork for income. If you are applying for daycare assistance while you attend school, place a copy of your school schedule in the envelope.

It is important to understand how government childcare assistance works. You will apply and give them all of the necessary paperwork. It can take a while to get approved, so be proactive. When you receive your notice of decision it will tell you how many hours you get, what days of the week you can use those hours and what the hours are for. If you are approved for job search hours, you can only use them while you are actually applying or interviewing for jobs. School hours cannot be used for work and work hours cannot be used for grocery shopping. Your case worker can get copies of your work schedule at any time. It is simple for them to compare these with the attendance sheets that your provider has to turn in which tell when your child is dropped off and picked up every day. If you are using daycare hours that you are not working not only can they cancel your daycare assistance, they can bill you for any hours they paid for that you were not at work! So remember, don’t abuse the privilege or you will lose it.

When you file your application, make a file in your personal records and file it away. Make sure you ask for copies that are stamped with the date received. Then take a copy to your provider so that she knows you are waiting for approval, and that she should plan on not receiving funds from you after you receive your approval. Ask your provider what happens if your approval is back-dated to the day you applied. Will she reimburse you for what has already been paid once you are approved, or will that money be applied to your co-pays until it is used up? If she is going to back bill and you have paid for the weeks pending approval, you are entitled to either a refund or a credit toward your co-pay (if you have one).

In order to make sure your approval stays in place, get out your planner when you get your notice of decision and mark the dates you have to turn in paperwork. Make sure you mark a reminder a few days ahead of time. For example, if your notice says that you have to turn in your next semester’s school schedule by August 1st, mark a reminder to mail it on July 25th. If you have to turn in paystubs the end of September, write in your planner “Save Paystub for Assistance” on the 2 paydays preceding your due date so that you have them ready to go. Then make copies before you turn them in, just in case they get lost in the mail or in the pile on someone’s desk. The best way to make sure your paperwork gets processed in a timely fashion is to turn it in personally, and get a stamped receipt.

Make sure you set aside a week’s worth of daycare funds, even if you have to save $10 a week until you have it. Don’t touch this money. Use it in an emergency when your daycare bill isn’t paid for any reason and you need a cushion of time to fix the problem. Remember, it is just as important that your childcare provider have a check on payday as it is that you have one. If your provider will allow it, you can give the extra $10 a week to her and keep a record of how much you have paid ahead until you reach 1 or 2 weeks of care that you can use when you need to.

If you have a skill that your provider needs, never feel bad about asking if your provider might be willing to barter for part of your bill. I exchanged a $20 per week discount with one mom in return for her cutting my family’s hair once a month. That may seem like a lot, but we have 8 kids and the 2 of us, so ten haircuts in our home without having to take 10 people to a salon is a great privilege.

Probably the best deal I ever made was with a mom who was a masseuse. She came to our home with her table every 2 weeks and gave my husband and I massages in return for $20 per week off her bill. And if any of my parents wanted massages they could get them twice a month at my house while she was there! We turned our spare room into a spa with music and candles and my daycare parents got a reduced rate from her. In the end not only did I help her get more business, eventually she didn’t need help with her daycare bill anymore but still came to do massages for us.

If you are a contractor, plumber, electrician or any other skilled trade, make sure you let your provider know if you would be willing to do work for her and have your bill paid in childcare credit. I once had my house painted and paid my painter with 24 weeks of half priced daycare. It was much easier on my budget than paying $1400 up front, and I actually gave him $1680 in free childcare.

Be Creative. If the only credit card you have is for Home Depot, maybe your provider needs a new furnace or stove. It is still way better than not getting paid. Your provider will appreciate your honesty and the fact that you care enough to try and pay your bill in any way possible. We just want to know you value us as an employee, and care about the fact we have a mortgage payment and cell phone bill due every month just like you do.

Your child care Provider, next to your spouse, is the most important relationship you will have. They spend more waking hours with your child than you do during the week. You don't want them stressed to the max about bills while watching your child. You definitely don't want it interfering with her being able to stay open because her power or water are being shut off until her bill is paid. This is her job, that feeds her children and keeps her lights on just like your job does. Paying late or not paying is the fastest way to ruin the relationship you have built. Ultimately, no matter who else helps to pay your child care bill, you are the one who is responsible to make sure it gets paid on time and in full.