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44 | P a g e FFY 2025–2027 CCDF State Plan

if the parents’ income exceeds the second tier of eligibility during the eligibility period, as long as it does not exceed 85 percent of SMI. A child eligible for services via the graduated phase-out of assistance is considered eligible under the same conditions as other eligible children with the exception of the co-payment restrictions, which do not apply to a graduated phase-out. To help families transition from child care assistance, Lead Agencies may gradually adjust co-payment amounts in proportion to a family’s income growth for families whose children are determined eligible under a graduated phase-out. Lead Agencies may require additional reporting on changes in family income but must still ensure that any additional reporting requirements do not constitute an undue burden on families. Check and describe the option that best identifies the Lead Agency’s policies and procedures regarding the graduated phase-out of assistance. a. [ ] Not applicable. The Lead Agency sets its initial eligibility threshold at 85 percent of SMI and therefore is not required to provide a graduated phase-out period. (If checked, skip to question 3.1.1.) b. [x] The Lead Agency sets the second tier of eligibility at 85 percent of SMI. If checked, describe the policies and procedures: CAPS Policy 8.3: When a family is initially approved for child care assistance, the gross applicable income of the family unit must be equal to or less than the current SMI for initial eligibility as defined by CAPS. For initial eligibility, the SMI is equal to or less than 40 percent of the SMI. During the eligibility period, if the family’s gross applicable income increases but remains at or below the maximum allowable federal limit of 85 percent of SMI, the family will remain in the program with no impact to eligibility or family fee until redetermination. At redetermination, families’ income will be reassessed. If a family’s gross applicable income increases but remains at or below the maximum allowable federal limit of 85 percent of SMI, the family will continue to be eligible for the program. The family fee will be calculated at redetermination based on the family’s current gross applicable income. i. [ ] Lead Agency adjusts the family’s co-pay during the graduated phase-out period. If checked, describe how the Lead Agency gradually adjusts co-payment for families under a graduated phase-out period in proportion to a family’s income growth. Include information on the percentage or amount of change made in the co-payment during graduated phase-out: ii. [ ] Lead Agency requires additional reporting requirements during the graduated phase-out period. If checked, describe: c. [ ] The Lead Agency sets the second tier of eligibility at an amount lower than 85 percent of SMI for a family of the same size but above the Lead Agency’s initial eligibility threshold. If checked, provide the following information: i. Provide the income level ($/month) and the percent of SMI for the second tier of eligibility for a family of three: ii. Describe how the second eligibility threshold takes into account the typical household budget of a low-income family: iii. Describe how the second eligibility threshold is sufficient to accommodate increases in family income over time that are typical for low-income workers and that promote and support family economic stability: