State of Wisconsin
Department of Children and Families
Payments under the Child Care Subsidy Program
The Wisconsin Department of Children and Families proposes to repeal ss. DCF 101.26 (1), 201.02 (2), (7), (11), (23), and (25), 201.03 (5), 201.04 (1), (2g) (a) to (g), (2j), (2m), (3), (4), (5) (b) 1. and 5., 201.045, and 201.05; to renumber ss. DCF 101.26 (2) and 201.035; to renumber and amend s. DCF 201.04 (2g) (h); to amend ss. DCF 201.02 (6), (12), 201.03 (3), (6), 201.04 (5) (a) 1., 2. (intro.), 3., and (b) 2. to 4., 201.07 (4), and 201.08 (2) (f) (Note); to repeal and recreate ch. DCF 201 (title), 201.01, 201.02 (3), (5), (6m), (7r), (13), and (19), 201.03 (1) and (2), 201.04 (title), (2), (2g) (title), and 201.06; and to create ss. DCF 201.02 (15m), 201.034, 201.036, 201.038, 201.039, and 201.065, relating to payments under the child care subsidy program.
Analysis Prepared by the Department of Children and Families
Explanation of Agency Authority
The department administers the child care subsidy program under s. 49.155, Stats. Section 49.155 (3m) (a), Stats., as affected by 2013 Wisconsin Act 20, provides that the department shall issue benefits directly to individuals who are eligible for subsidies under this section or pay or reimburse child care providers. Section 49.155 (1m) (d), Stats., authorizes the department to establish other eligibility criteria by rule. Section 49.155 (3m) (d) 4., Stats., provides that the department shall by rule specify the circumstances or standards for determining the circumstances, under which the department will grant a waiver to the prohibition in subd. 1. Section 49.155 (3m) (d) 1., Stats., provides that no funds distributed under par. (a) may be used for child care services that are provided for a child by a child care provider who is a parent of the child or who resides with the child. Section 227.11 (2) (a), Stats., expressly confers rule-making authority on each agency to promulgate rules interpreting the provisions of any statute enforced or administered by the agency if the agency considers it necessary to effectuate the purpose of the statute.
Summary of the Proposed Rule
New Payment System
The proposed rule implements a new system for issuing child care subsidy payments to families to assist with the cost of child care. Under the new system, the department will make a monthly subsidy payment available to a parent electronically on the first of a month. As payments to the child care provider become due based on the provider’s billing and collection practices, the parent will transfer the funds due to the child care provider electronically. The new system for paying child care providers that serve children whose care is subsidized will be more closely aligned with the generally accepted payment practices of child care providers that serve children whose care is not subsidized.
Authorization and Payment
A parent will only be able to use the subsidy payment to pay for child care on the terms that have been authorized by the child care administrative agency. The parent will inform the agency of his or her schedule of approved activities, the child care provider that will care for the child, and any other information requested by the agency regarding the family’s need for child care. The agency will assess the family’s need for child care and issue an authorization notice that specifies the child who will receive the care, the child care provider, the location where the child care will be provided, the time period in which the child care will be provided, the number of hours of child care authorized per month, and the maximum subsidy payment amount per month. The department will issue a monthly payment to the parent based on the terms in the authorization notice. The parent’s electronic access to the subsidy payment will expire 90 days after the issuance date.
Backdating an Authorization
If the parent submits his or her schedule of approved activities, information on the child care provider, and other required information to the agency within 30 days after submitting the request for assistance, the agency may backdate an authorization so the parent can receive a subsidy for ongoing child care. Assistance under the subsidy program may begin on the date that all of the following conditions are met:
• The parent has submitted a request for assistance.
• The child is receiving child care services from a child care provider.
• The provider is in compliance with program requirements.
Assistance for a kinship care relative providing care and maintenance for a child placed in his or her home pursuant to a court order under ch. 48 or 938, Stats., begin on the later of the date of child placement or the first day of the month in which the parent submitted the request for assistance if all of the conditions are met on or before the last day of the month.
If the parent submits the required information more than 30 days after submitting the request for assistance, the agency may authorize payment beginning the first day of the month in which the parent submits the required information if all of the conditions are met.
The proposed rule requires child care providers to be licensed, certified, licensed or regulated in an adjacent state, or a child care program established or contracted for by a school board. In addition, providers must participate in the department’s quality rating system under ss. 48.659 and 49.155 (6) (e), Stats. In-home providers and out-of-state providers are exempt and instead sign a Wisconsin Shares participation contract. Providers must also comply with the requirements in s. 48.685 (2) (br), Stats., on fingerprint-based background checks and complete the procedures necessary to receive payments by electronic fund transfer.
Obsolete Policies and Terminology
The rule repeals the requirement that a child care provider submit a request for reimbursement and attendance report form to the department within 3 months after providing care for a child whose care is subsidized. With the new payment system, providers will no longer be submitting attendance report forms and the term “reimbursement” will no longer be used. Also, the term “voucher” is replaced by the term “authorization notice” to signify agency approval of a subsidy for child care based on the terms specified in the notice.
In addition, the rule repeals the requirement that an agency issue an authorization for payment based on authorized hours if the care will be by a licensed group provider and an authorization for payment based on attendance if the care will be by a licensed family provider or a certified provider. Under the new payment system, authorizations for all types of providers will be based on a family’s need for care. Existing policies on authorizations are reorganized for clarity.
The section of the rule on maximum rates for child care services is rewritten to incorporate the change from counties establishing maximum rates and the department approving the rates to the department having sole responsibility for rates under 2013 Wisconsin Act 20.
Summary of Factual Data and Analytical Methodologies
The rule is updated to incorporate changes in policy and terminology related to the issuance of child care subsidy payments to parents instead of child care providers.
Summary of Related Federal Law
42 USC 9858c (c) (2) (S) requires that the payment practices of child care providers that serve children who receive assistance reflect generally accepted payment practices of child care providers that serve children who do not receive assistance, so as to provide stability of funding and encourage more child care providers to serve children who receive assistance.
The proposed rule does not include requirements of the final rule adopted by the Administration for Children and Families on September 30, 2016. The federal rule makes significant changes to the Child Care Development Fund program that will require state statutory changes before implementation.