Senate File 353 expands child care assistance income eligibility limits and ties provider reimbursement rates to recent market surveys

Original title: A bill for an act relating to state child care assistance income eligibility requirements, and child care provider reimbursement rates.

Last action · February 20, 2025: Subcommittee: Klimesh, Costello, and Petersen. S.J. 328 .Sponsors: Janet Petersen and 10 others

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What This Bill Would Do

Low- and moderate-income families may qualify for state child care assistance as income eligibility limits rise progressively up to 200 percent of the for basic care and 240 percent for special needs care by 2028. Additionally, child care providers will receive state reimbursement rates based on the most recently completed statewide rate survey rather than older baseline data.

Why it matters

Families seeking subsidized care face higher income cutoffs over a multi-year phase-in beginning July 1, 2025, while licensed providers see their state compensation tied directly to current private-pay market rates.

Background

State child care assistance in Iowa provides financial support to eligible low-income families to help cover the cost of child care. context
Trone Garriott is a member of the Iowa General Assembly who sponsored this legislation. context

Who It Would Affect

Groups the bill's text would affect if enacted, as described in the record. Being affected is not a position for or against it.

Directly affected

families needing basic child care

Family income eligibility limits for state child care assistance are raised incrementally each fiscal year through July 1, 2028.

Directly affected

families needing special needs child care

Income eligibility thresholds for special needs child care assistance are raised gradually each fiscal year through July 1, 2028.

Directly affected

child care providers

State reimbursement rates are required to be based on the most recently completed statewide rate survey rather than older survey data.

Key Facts

The income eligibility limit for basic child care assistance increases to 170 percent of the federal poverty level for FY 2025-2026, 180 percent for FY 2026-2027, 190 percent for FY 2027-2028, and 200 percent on or after July 1, 2028.
The income eligibility limit for special needs child care assistance increases to 210 percent of the federal poverty level for FY 2025-2026, 220 percent for FY 2026-2027, 230 percent for FY 2027-2028, and 240 percent on or after July 1, 2028.
The Department of Health and Human Services is required to base child care provider reimbursement rates on the most recently completed statewide reimbursement rate survey rather than the 2020 survey.
The department must conduct a statewide reimbursement rate survey to compile information on each county at least every two years.

Show all 5 facts

Child care reimbursement rates must be set at levels no less than the sixty-fifth percentile and no more than the eightieth percentile of rates that child care providers charge private-pay customers.

Frequently Asked Questions

What are the new income limits for basic child care assistance?

The limit increases gradually from the current 160 percent of the up to 200 percent by July 1, 2028.

How will child care provider reimbursement rates be calculated under the bill?

Rates must be based on the most recently completed , set between the 65th and 80th percentiles of private-pay customer rates.

What else do you want to know?

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Where This Stands

Currently in committee. The next step in the legislative lifecycle is Floor Vote.

Procedural history

2 actions

Feb 20, 2025Senate
Subcommittee: Klimesh, Costello, and Petersen. S.J. 328 .
Feb 18, 2025SenateIntroduced
Introduced, referred to Health and Human Services. S.J. 295 .

Version history

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