Methodology

NC Child Care Subsidies

An overview of the eligibility requirements for subsidies is on the state's website. The administrative regulations are also available. We used the administrative regulations when conducting our analysis.

Eligibility

• Initial eligibility
  • 0 to 5 year olds: household income less than 200% of the federal poverty guidelines
  • 6 to 12 year olds: household income less than 133% of the federal poverty guidelines
• Continued eligibility
  • All ages: household income less than 85% of the state median income

Since our focus is on when families lose benefits, we use the continued eligibility threshold when simulating the benefits cliff.

Market value of benefit

The market value of NC Child Care subsidies is based on the 2019 subsidized NC market rate for 4-star child care centers in Forsyth County.

Subsidy recipients must also pay 10% of their gross income as a copay. Therefore, to calculate the market value of the benefit, we subtract 10% of household income from the 2019 NC market rate of the subsidy.

We did not incorporate other child care programs such as NC PreK because children in programs such as these are only in the program for a year. As a result, families cannot phase out due to passing an income threshold. Instead, they phase out of the program when their year expires.

Food and Nutrition Service (FNS)

Our information on FNS came from the program manual.

Eligibility

The household income threshold for FNS benefits is 130% of the federal poverty guidelines for most households and 200% for those categorically eligible. Since most recipients are not categorically eligible, we use the 130% threshold.

Market Value of the Benefit

FNS beneficiaries receive benefits proportional to their monthly net income. To calculate net income, we start with gross income and take the following deductions, which are outlined in the benefits level manual. All citations below at to the benefits level manual.

• Excess shelter deduction is shelter and utility expenses exceeding 50% of monthly income after other deduction have been subtracted, with a maximum of $552, 285.01(F);
  • Utility expenses are based on the table in 285.01(A);
  • Rent for all families is estimated at $500, which represents the 25th percentile rental value in Forsyth County;
• Standard deduction based on the table in 285.01(B);
• Earned income deduction of 20%, 285.01(B);
• Dependent care deduction of $60 per child per month, 285.01(E).

We can determine the benefit amount once net income is calculated. In general, households are expected to spend 30% of their own net income on food, 285.04(D)(19), with FNS covering the rest. So, we take the maximum monthly income allotment as specified in 285.02(B) and subtract 30% of net income from this amount to arrive at the value of the benefit.

One and two person households must receive benefits of at least $15 to receive anything, 285.04(D)(20).

More information on calculating FNS benefits, called SNAP federally, can be found in this review by the Center on Budget and Priorities.

NC Housing Choice Vouchers

Eligibility

The initial eligibility threshold is 50% of an area's median income, but households continue receiving benefits once they qualify. There is no cliff. Since families must pay 30% of their income in rent, they ease themselves off the program when their share of rent equals their actual rent payments.

Market Value of the Benefit

The market value of the benefit is the market value of the rental unit minus the voucher recipient's share of rent. Fair market rental rates for reimbursement are capped by HUD. Since we know no rental rates are above these amounts, we assume that rental rates are 80% of the fair market rental.

Calculating the recipient's share of rent first requires calculating the recipient's total tenant payment. Information on the total tenat payment and the recipient's share comes from the HUD manual.

Total tenant payment is the greater of (HUD manual, pg. 5-67):

• 30% of monthly adjusted income,
• 10% of monthly gross income, or
• $25.

We make the following deductions and assumptions in calculating monthly adjusted income:

• Dependent deduction: $480 year ($40 / month) for each child under 18 (HUD manual, pg. 5-41);
• Child Care Deduction: $4000 per year / per child ($333.33 per month), but 10 year old in three person home will not have any child care costs;
  • The value comes from the example on page 5-43.

We subtract the utility allowance from the total tenant payment (HUD manual, pg. 5-67) to calculate tenant rent. The average Forsyth County utility allowance in 2018 was $177, so all families were assumed to receive this allowance.

Now we can calculate the fair market value of the benefit, which is the rental rate minus the tenant rent.

Medical

Medical is a combination of three health insurance programs: (1) Medicaid for Families with Dependant Children, (2) Medicaid for Infants and Children, and (3) NC Health Choice.

Eligibility

Income eligibility thresholds for all programs were retrieved from the 2019 Basic Medicaid Eligibility chart.

Market Value of the Benefit

The market value of all insurance programs were assumed to equal the equivalent price of a 2019 silver plan in Forsyth County on the ACA marketplace. We pulled plan prices from the Kaiser Family Foundation's health insurance marketplace calculator.

In calculating the value of the silver plan, all adults were assumed to be 30 years old and non-tobacco users. Children's ages depend on family size and break down as follows:

• 1 child: 2 years old,
• 2 children: 2 and four years old,
• 3 children: 2, 4, and 10 years old.

Work First (TANF)

Our information for Work First comes from the NC TANF State Plan, hereinafter "State Plan".

Eligibility

Only families with children 17 or younger are eligible for Work First Financial Assistance, State Plan pg. 29. We assume all children are 17 or younger.

Market Value of the Benefit

The benefit's market value is the payment amount. This amount is 50% of the difference between total countable income and the need standard listed on pg. 34 of the State Plan. But, payments must be at least $25.

Women, infants, and children (WIC)

Eligibility

Mothers and children up to 5 can receive WIC benefits if their household income is less than 185% of the federal poverty guidelines. The ages of children are assumed as follows:

• 1 child: 2 years old,
• 2 children: 2 and four years old,
• 3 children: 2, 4, and 10 years old.

Therefore, one child gets benefits in one child households and two children receive benefits in two and three child households.

Market Value of the Benefit

Average monthly food benefits per person in 2018 for North Carolina were $42.28. To verify, go to the USDA's WIC data site, scroll down to "Annual State Level Data FY 2009-2018", and then open the dataset labeled "Average Monthly Food Cost Per Person." We assume all eligible family members receive WIC benefits in this amount.