SB 727
Creates a child care subsidy pilot program for parents to continue to receive subsidies while sharing in the costs of the benefits by enacting the Low-Wage Trap Elimination Act
LR Number:
Last Action:
5/18/2012 - H Calendar S Bills for Third Reading
Journal Page:
SS SB 727
Calendar Position:
Effective Date:
August 28, 2012
House Handler:

Current Bill Summary

SS/SB 727 - This act, to be known as the "Low-Wage Trap Elimination Act", requires the Children's Division within the Department of Social Services, subject to appropriations, to implement a child care subsidy benefit pilot program in at least one rural county and in at least one urban child care center that serves at least 300 families by January 1, 2013, to be known as the "Hand-Up Program".

The Program will be voluntary, and shall be designed such that a participating recipient will not be faced with a sudden loss of full child care benefits should the recipient's income rise above the maximum allowable monthly income for persons to full receive child care benefits. The recipient shall be permitted to continue to receive such benefits if the recipient pays a premium to be applied only to that portion of the recipient's income above such maximum allowable monthly income for the receipt of child care benefits.

The premium shall be 44 percent of the recipient's excess adjusted gross income over the maximum allowable monthly income for the applicable family size for the receipt of child care benefits. The premium shall be paid on a monthly basis by the participating recipient. The Division shall develop a payroll deduction program in conjunction with the Department of Revenue, and shall promulgate rules for the payment of premiums owed under the Hand-Up Program. Participating recipients who fail to pay the premium owed shall be removed permanently from the Program after 60 days of non-payment.

Participating recipients may be eligible to receive child care service benefits at income levels all the way up to the level at which a person's premium equals the value of the child care service benefits received by the recipient.

Only those recipients who currently receive child care benefits as of joining the Program and who had been receiving child care service benefits continuously on or before August 28, 2012, shall be eligible to participate in the Program. Only those recipients who agree to the terms of the Hand-Up Program during a 90 day sign-up period shall be allowed to participate in the Program. A participating recipient shall be allowed to opt out of the Program at any time, but such person shall not be allowed to participate in the program a second time.

The Division shall issue an annual report to the General Assembly by January 1 2014, and annually on January 1 thereafter, detailing, among other requirements, the effectiveness of the pilot program in encouraging recipients to increase their income levels above the income maximum applicable to each recipient.

The "Hand-Up Program Premium Fund", is created and shall consist of premiums collected under this act. All premiums received under the Program shall be deposited in the fund out of which the cost of administering the hand-up program shall be paid, as well as the necessary payments to the federal government, if required by federal law, and to the state general revenue fund. Child care benefits provided under the Hand-Up Program shall continue to be paid for as under the existing state child care assistance program.

The Division shall pursue all necessary waivers from the federal government to implement the pilot program and shall promulgate rules to implement the provisions of the act.

This act contains a three-year sunset provision.

This act is identical to a provision in SCS/HCS#2/HB 1323 (2012).