Between November 2022 and October 2023, an average of 16,000 Granite Staters per month were not working because they were caring for children who were not in school or day care. The high price of child care may be a key factor keeping many NH residents out of the workforce.

Child care expenses, along with other labor force constraints such as limited housing, may negatively affect the state economy by reducing workforce participation and leaving less household income for other costs in family budgets.

To help make child care more affordable, the fiscal years 2024-2025 state budget, enacted July 1, 2023, expanded income eligibility for NH Child Care Scholarship recipients and lowered family cost share expectations for eligible families. The program’s implementation is anticipated in 2024.

The NH Child Care Scholarship program is a state-federal partnership intended to make child care more accessible to families with low and moderate incomes. The program allows parents to work, look for employment, attend school, or participate in mental health or substance misuse treatment. Children under the age of 13 who reside with a parent, caretaker relative or legal guardian as residents of NH and meet income requirements can participate. Children under 17 experiencing disabilities can also participate, as can qualifying non-citizens.

Under the eligibility expansion, families earning 100% of the Federal Poverty Guidelines (FPG) levels or less (as of July 2023, $24,214 for a family of three) will have no cost share. Families between 100% and 138% of the FPG (up to $34,307 for a family of three) will have a weekly cost share of $5, and those between 138% of the FPG and 85% of State Median Income (up to $89,180 for a family of three) will have cost shares capped at 7% of household income.

In 2022, the average price for an infant in center-based child care was $295 a week. The expansion may result in considerable savings for newly eligible families. For example, a family of three with an infant earning $80,000 annually may be eligible for the child care scholarship program. Their cost share would be capped at $108 a week, resulting in weekly savings of up to $187, or $9,724 annually, compared to their previous out-of-pocket child care tuition.

Once expanded eligibility provisions are implemented, families can apply for the NH Child Care Scholarship program through the NHEasy website.

Nicole Heller is a senior policy analyst with the New Hampshire Fiscal Policy Institute. The NHFPI Policy Memo is a partnership of the NH Fiscal Policy Institute and NH Business Review.