The "Rhode Island Childcare is Essential Act" establishes the Rhode Island Childcare Assistance Program, which governs family eligibility for the state's childcare subsidy program and the rates paid to childcare providers. The act expands eligibility to families with incomes at or below eighty-five percent (85%) of the state median income, aligning with the federal eligibility benchmark. Families will maintain eligibility until their income exceeds one hundred percent (100%) of the state median income. Participation in the state's child support enforcement program will be voluntary for those receiving childcare subsidies.

The act mandates that the Department of Human Services provide appropriate childcare to all families eligible for cash assistance who require childcare to meet work requirements. It also stipulates that childcare assistance will be available to families with incomes at or below eighty-five percent (85%) of the state median income, provided they need childcare to work or participate in job readiness programs. Additionally, families with incomes below eighty-five percent (85%) of the state median income will receive assistance if necessary for a member to enroll or maintain enrollment in a Rhode Island public institution of higher education.

The act sets a cap on liquid resources for eligibility at one million dollars ($1,000,000) and defines "liquid resources" to include cash and financial instruments readily convertible to cash, excluding certain accounts like educational savings and retirement accounts.

For families receiving childcare assistance, those with incomes at or below one hundred percent (100%) of the federal poverty level will receive free childcare, while those with incomes above this threshold will pay a sliding fee not exceeding seven percent (7%) of their income. Families who become ineligible due to exceeding eighty-five percent (85%) of the state median income will continue to receive assistance until their income exceeds one hundred percent (100%) of the state median income.

The act also introduces a new structure for childcare rates, effective July 1, 2025, based on the findings from the 2024 Rhode Island childcare market rate survey. Rates will be tiered according to the quality rating of childcare providers, with all rates meeting or exceeding the federal equal access benchmark. Providers serving infants under age eighteen (18) months will receive an additional infant bonus rate equal to fifty percent (50%) of the toddler rate.

Furthermore, the act requires that all childcare assistance payments be made prospectively, on or before the Friday preceding the beginning of the childcare service period, based on children's authorized enrollment. It also mandates that the Department of Human Services pay a registration fee for each child enrolled in the childcare assistance program to the childcare centers where the children are enrolled.

The legislation repeals previous provisions that established different income eligibility thresholds and requirements, streamlining the process to align with the new standards. The proposed changes also include increasing tiered reimbursement rates for licensed childcare centers to meet federal benchmarks.

Statutes affected:
5281: 40-5.2-20, 40-6.2-1.1