U.S. Office of Personnel Management Guide for Implementing Child Care Legislation

Sample Models for Determining Tuition Assistance Eligibility

Model A Based on a variable percentage of a familys total child care costs that the agency pays, linked to total family income.

In this model, the agency establishes an upper limit or threshold for total family income (TFI) eligibility. In this example, it is $52,000. This is an arbitrary amount and used to illustrate how the subsidy calculations would be made. Agencies may choose to set higher or lower threshold amounts.

The tuition assistance for all the children in child care in a particular family is determined as a set percentage of the familys total child care costs. The agency prorates the percentage amounts based on total family income.

Example: If a familys total family income is $39,000 and their total cost of child care is $6,500, the agency will pay 15% of $6,500 and the family pays the rest. Therefore, the agency pays $975 and the family pays $5,525.

Model B Based on a specific percentage of total family income that the family is expected to pay for their total child care costs. The agency pays the remainder. The concept is similar to Model E.

According to this model, a family is eligible for a subsidy only when actual child care costs exceed the specified percentage set by the agency. No threshold amount is set in this model. This model is particularly helpful to families that have extraordinary child care expenses.

Example: In this example, the agency sets 20% as the percentage of total family income the family is expected to pay for child care, regardless of their income level. Again, the percentage might be set higher or lower than 20%; 20% is used here to illustrate the effects of the model.

If the familys total family income is $39,000 and the costs of child care are $6,500, the family is expected to pay up to $7,800 (20% of TFI) for child care costs. Since their actual costs are $6,500, they would not receive tuition assistance because this is less than the amount they are expected to pay.

Model C Based on a tuition cost sliding scale per child that is paid by the family. The agency pays the remainder.

This model specifies a sliding scale of tuition rates a family is expected to pay per child and the agency pays the difference. Therefore, the amount the agency pays is calculated for each child in care. This chart is from the Military model. The Military model does not set a threshold amount.

Example: If a familys total family income is $39,000 and they have one child in care and the annual cost is $6,500, they will pay $3,432 a year (based on the midpoint of $66 per week) and the agency will pay $3,068 in tuition assistance.

Model D Based on a low income eligibility threshold with a specified graduated amount the agency pays regardless of the familys actual child care costs.

The income eligibility threshold is set at a specified total family income amount; in this case it is $35,001 to illustrate the effects of the model. Agencies may choose to set the threshold higher or lower. They may also wish to set the tuition assistance amount higher or lower than the example shown here. Only those families earning less than the threshold amount ($35,001) are eligible for a subsidy. The tuition assistance amount is on a sliding scale and determined by the familys total family income bracket. This model does not take into consideration actual child care costs. If child care costs are less than the amount of tuition assistance for which the employee is eligible, the tuition will not be reduced by more than the specified amount. For example, if an employee earns less than $23,000, and their annual child care costs are $3,200, even though they are eligible to receive $3,600, they will receive tuition assistance in the amount of $3,200. If their costs are $7,000 per year, they will receive tuition assistance of $3,600.

Example: If a familys total family income is $39,000 per year and their child care costs are $6,500, the family would not be eligible for any tuition assistance since the income eligibility threshold is set at $35,001.

Model E Based on a specific percentage of total family income that the family is expected to pay for their total child care costs. The agency pays the remainder.

This model sets a threshold amount of total family income. In this case, it is $52,000, meaning that no family earning over $52,000 a year is eligible for tuition assistance. The model uses a percentage of total child care costs the family is expected to pay and the agency pays the difference. This model is similar to Model B except that the percentage of total family income the family is expected to pay is based on a graduated scale. An agency interested in this model may wish to change the income bracket amounts and/or change the percentage amounts.

Example: If a familys total family income is $39,000, they are expected to pay 18% or $7,020 of TFI for child care costs. Since their costs are $6,500, they are not eligible for a subsidy.

Comparing the Results from the Models:

In each of these examples, the same TFI of $39,000 and child care costs of $6,500 were used. Using three of the five models, no subsidy would be available to the family in this example. Under Model A, the agency would pay $975, and under Model C, the agency would pay $3,068.

Using the same family income for each of these models shows how dramatically different a tuition assistance subsidy could be for the same family, depending on the model you choose.