ForKids strongly support HB2451, which would bridge the benefits valley for families transitioning off TANF. As it stands, a minute increase in income triggers an abrupt and total loss of Child Care Subsidy assistance, forcing working parents to make the impossible choice between increased pay or hours and the child care they need to keep working. This cliff creates a disincentive for advancement and a long, steep climb to self-sufficiency. In our direct service work with the community, we see how this traps children and families in poverty. HB2451 seeks to remedy the problem by implementing a phased reduction model for the Child Care Subsidy Program.

Goodwill of Central and Coastal Virginia and the Virginia Goodwill Network recognize the profound negative impact of the benefits cliff on our associates, particularly working parents who are already struggling with other barriers to employment. The benefits cliff disproportionately impacts individuals who are working hard to improve their financial situation, yet face the devastating loss of critical benefits, such as childcare subsidies, as their wages increase. Access to affordable childcare is essential for working parents, but when these subsidies are removed, many are forced into impossible choices between advancing their careers and maintaining the support needed to provide for their families. This issue is particularly detrimental to those who are already facing challenges such as intellectual or developmental disabilities, a history of incarceration, or housing instability. Collectively, Goodwill organizations across the Commonwealth employ more than 3,300 Virginians. At Goodwill of Central and Coastal Virginia, our mission is changing lives—helping people help themselves through the power of work. Our job training programs, internal promotion opportunities, and career placement initiatives are designed to foster economic mobility, but these efforts are undermined when individuals lose access to childcare benefits. For families already stretched thin, the sudden inability to afford childcare often forces them to quit their jobs, stalling their upward mobility and perpetuating cycles of poverty. We believe HB2451 is critical to addressing the challenges posed by the benefits cliff and bringing much-needed attention to its impact on working parents and families. By advancing solutions to this issue, we can ensure that working parents—and others striving to overcome barriers to employment—can achieve long-term economic stability without losing access to the vital supports they need to succeed. Mark A. Barth President & CEO, Goodwill of Central and Coastal Virginia Chair, Virginia Goodwill Network

I am against this bill which proposes a phased reduction model for the Child Care Subsidy Program based on income increases. Complexity in Administration: Implementing a phased reduction model with incremental income tiers would add significant complexity to the administration of the Child Care Subsidy Program. This could lead to increased administrative costs and potential errors in calculating eligibility, affecting both the Department of Education and local departments of social services. Disincentive to Earn More: By reducing assistance proportionally with income increases, this model might inadvertently discourage families from seeking higher income opportunities, fearing the loss of child care support. This could conflict with broader economic mobility goals, where increased earnings should be encouraged without penalty. Uncertainty for Families: The phased reduction introduces uncertainty for families, who might not be able to predict exactly how much assistance they will lose with each income increment. This unpredictability could make financial planning difficult, especially for low-income families already on tight budgets. Regulatory Burden: The requirement for the Board of Education to promulgate new regulations and amend the Child Care and Development Fund Plan adds a regulatory burden. This process could be lengthy, delaying the implementation and potentially leaving families in a state of limbo regarding their benefits. Potential for Reduced Support: While the intent is to avoid a sudden loss of eligibility, the phased reduction might still result in families receiving less support at a time when they might still need significant assistance, particularly if the cost of living increases outpaces their income growth. Impact on Program Effectiveness: The focus on reducing benefits as income rises might shift the program's focus from providing stable support to managing a gradual exit strategy, potentially reducing the effectiveness of the program in supporting early childhood education and care continuity. Federal Compliance Issues: Amending the Child Care and Development Fund Plan to align with this new model might face scrutiny or rejection from the U.S. Department of Health and Human Services if it's seen as not aligning with federal goals of promoting work and self-sufficiency without creating barriers to employment. Resource Allocation: The resources needed to develop, implement, and monitor this phased reduction model could be substantial, potentially diverting funds from direct service provision or from expanding the program to serve more families in need. I oppose this legislation due to concerns over increased administrative complexity, potential disincentives for income growth, financial uncertainty for families, regulatory burdens, the risk of reduced support when still needed, impact on program effectiveness, potential federal compliance issues, and inefficient resource allocation. A more straightforward, supportive approach that encourages economic advancement while providing stable child care assistance would be more beneficial.