A Matter of Money - Home Based Childcare

The first post in this series was 'Motivation', the second was 'Centre or Home'.  For this third installment I want to focus strictly on the financial side of home based childcare - the income. Home based childcare incomes can vary greatly dependent on your neighbourhood, the ages of your own children and the children in your care and the type of program you offer. First let me define the types of home based childcare:

Family Child Care - located in the providers home - may have a maximum of eight children, of whom no more than five can be under the age of six, and no more than three may be less than two years of age. The child care provider's own children are included in these maximum numbers. All FCC homes must be licensed and inspected but they have the option of being funded or unfunded - more on that later.

Private Home Day Care - is also located in the caregivers home but is not licensed or inspected. They may offer care for a maximum of four children under the age of 12, with no more than two children under two years of age including the caregivers own children. If there are more than four children in the home at any time the home must be licensed. Unlicensed homes are never able to receive any type of funding from the Province.

Group Child Care Home - A group child care home is run by 'two' licensed providers in one of their homes. A licensed group child care home can accommodate as many as 12 children under the age of 12, of whom no more than three may be less than two years of age. These homes also have the option to be funded or unfunded.

Now let me talk a little about income.

Unlicensed/private home day care providers are free to set their own childcare rates - they can choose to charge hourly, daily, weekly or monthly. They can offer discounts to parents with more children. They do not have to charge all parents the same rates and 100% of their income comes directly from the parents using their services. They can be trained or untrained. They have absolutely no regulations regarding their childcare space, equipment, hours, or programming.

Licensed providers who operate funded programs receive an annual operating grant to supplement their income. A funded provider may not charge any parent - subsidized or not - more than the maximum, government set, daily childcare rates. Set rates for trained providers are slightly higher than those for providers without their ECE II/III classification.

These maximum daily rates have only increased by about $2/day in the past 20 years. The rate that parents pay for before/after school care is only eighty cents per day higher than it was when I first opened my childcare home in 1997. These daily childcare fees are kept low to ensure that childcare is affordable for low/middle income parents. Funded providers receive wage increases primarily through increases to operating grants. Current grant amounts work out to about $2/day for school-age children up to $6/day for infants.

Licensed providers - either family or group - may also choose to be unfunded and then - like private providers - they are also able to set their own childcare rates. Unfunded licensed providers may accept subsidized families but the maximum subsidy payment is usually far less than what the provider's regular rates are. The provider may require subsidized families to cover the additional costs but it is unlikely that the families could afford to.

It is rare for a licensed provider in a higher income neighbourhood to choose to be funded. Many of them can charge rates that are double or even triple the amount of the subsidized fees and operating grants combined. Even unlicensed/private home providers can often charge rates that are considerably higher than the combination of parent fees and operating grant that a licensed, funded childcare provider earns. In some upscale areas the rates can be $80/day for care for preschool children or $25/day for before/after school care and due to the demand for childcare services these providers are still able to fill their spaces.

This is not the case in lower income areas where many families are partially or fully subsidized. Single parents, students, those you work various shifts, don't have reliable transportation etc will all have fewer childcare choices available. Even in middle class neighbourhoods some families 'temporarily' place their children in childcare homes with higher rates - just until they find something more affordable.

Funded childcare centres are considered 'Not for Profit' but all home childcare providers are considered self employed and therefore 'for profit'. Many home providers feel that funded homes should also have the 'not for profit' status because we have no control over our childcare rates. Most of us have chosen to operate a funded home because we feel affordable childcare is an essential service.

I've heard it said that family childcare providers have options to increase their income but I don't believe that should include limiting access to quality childcare to only those who can afford it. This post is long enough already so in my next post I'll discuss the expenses related to home-based childcare and some of the things home providers can control.