U.S. Parents Are Sweating And Hustling To Pay For Child Care

[MayDay]

OH AND ALSO>

Dependant Care Reimbursement Accounts suck the big one.

My old employer let you put in your ~400 a month to add up to 5K fr the year.  But you could turn in receipts and get your check whenever.  5K of childcare expenses in January?  Sure, here is a check for 5K. 

My H's current employer requires that you divide your 5K of payments out evenly, but does not allow you to get reimbursed for expenses until the money is in the account.  On the surface this makes sense- if he quit in June and only contributed 2.5K to the account, and been reimbursed for 5K, the company is out money.

With school ages kids who only need summer care, though, it makes it impossible to use the program.  We aren't allowed to just contribute the first 6 months and use it up over the summer.  It has to be spread out over 12 months.  We won't need childcare September through December, so those months' contributions cannot be reimbursed for.   

Who comes up with these complex schemes? 

[dogboyslim]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

[Chris22]

OH AND ALSO>

Dependant Care Reimbursement Accounts suck the big one.

My old employer let you put in your ~400 a month to add up to 5K fr the year.  But you could turn in receipts and get your check whenever.  5K of childcare expenses in January?  Sure, here is a check for 5K. 

My H's current employer requires that you divide your 5K of payments out evenly, but does not allow you to get reimbursed for expenses until the money is in the account.  On the surface this makes sense- if he quit in June and only contributed 2.5K to the account, and been reimbursed for 5K, the company is out money.

With school ages kids who only need summer care, though, it makes it impossible to use the program.  We aren't allowed to just contribute the first 6 months and use it up over the summer.  It has to be spread out over 12 months.  We won't need childcare September through December, so those months' contributions cannot be reimbursed for.   

Who comes up with these complex schemes?

Reimbursement isn't tied to when the expense is incurred.  We put away the $5k/yr and then in December every year take the $5k back out.  You just have to show you incurred the expense within the year. 

And yes, you have to have the money in there, because you are withdrawing your money.  It's just a pre-tax savings account.

[KCM5]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

The way my dependent care flex spending account works, yes, that would cover it. What MayDay is describing seems to be different.

[MayDay]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

The way my dependent care flex spending account works, yes, that would cover it. What MayDay is describing seems to be different.

The way it worked for my old employer, yes.

For H's employer, no.  Why?  I have no idea.  I assume they were just thinking about birth to age 5 daycare, and it would work fine for that.  It fails for summer only care.  It is just rules the plan provider and/or H's employer decided on, it isn't an issue of what the law allows.  And its a big corporation, so unlikely that us fighting it would result in rules changes.

I would rather just abandon the whole DCRA/FSA/etc accounts and make the first whatever thousand dollars deductible on your taxes, so that people don't have to try to predict in advance what their costs will be.  But no one asked me!

[SomedayStache]

Could you estimate your expenses and put aside that amount (probably less to be safe).  Pay out of pocket.  Then submit your summertime receipts in December? 

[onlykelsey]

Could you estimate your expenses and put aside that amount (probably less to be safe).  Pay out of pocket.  Then submit your summertime receipts in December?

Or ask to be billed over time?

[Chris22]

Could you estimate your expenses and put aside that amount (probably less to be safe).  Pay out of pocket.  Then submit your summertime receipts in December?

Yes, under every plan I'm aware of. 

That's what we do.  Except that we are aware our costs will be in excess of $5k (we hit that before May) so we don't worry about the estimating part.

[charis]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

The way my dependent care flex spending account works, yes, that would cover it. What MayDay is describing seems to be different.

The way it worked for my old employer, yes.

For H's employer, no.  Why?  I have no idea.  I assume they were just thinking about birth to age 5 daycare, and it would work fine for that.  It fails for summer only care.  It is just rules the plan provider and/or H's employer decided on, it isn't an issue of what the law allows.  And its a big corporation, so unlikely that us fighting it would result in rules changes.

I would rather just abandon the whole DCRA/FSA/etc accounts and make the first whatever thousand dollars deductible on your taxes, so that people don't have to try to predict in advance what their costs will be.  But no one asked me!

I am not understanding how your DCRA works differently for summer care.  For example, we only needed daycare Jan-June.  We estimated the amount of cost of care needed.  Then we contributed to the account evenly throughout the year per paycheck.   If total contributions are $2400 and therefore we contribute $100 per paycheck (2x/month) through the year, even though we used up the $2400 by June, we are still reimbursed, through December, $100 after the contribution is received for that pay period.

[MrsPete]

I tried to point this out elsewhere, and tangentially above, but it seems that posters who don't want watch their grandchildren (full time or whatever) have difficulty understanding that some grandparents do.  I didn't ask my parents or MIL to watch my kids, they asked me.  Different folks, different strokes.

Yeah, obviously everyone doesn't want to do it, and people on this board don't quite fit the social norm -- but a whole lot of people are willing and able to provide daycare for their grandchildren.  I know quite a few people who not only are willing to provide daycare, they are excited about it.  I even have one co-worker who's pushing her daughter to have a baby, promising her that she'll quit her job to provide daycare for her. 

My grandmother asked me if she could care for my oldest, and she and I came to a financial agreement that helped everyone: She would not take money for babysitting her great-granddaughter, but I didn't feel good about not paying her.  We agreed that we'd start a college fund and deposit the money that would've gone to daycare into that account.  A staunch believer in education, she loved the fact that she was providing a portion of the baby's future college costs.  She almost lived to see that baby graduate from college; I truly wish she had been able to be with us at graduation.

I've already told my daughters that if they live near enough to make this a viable proposition, we'll do the same for them. 

[MrsPete]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

Logically, yeah, that makes sense. 

In reality, though, most people aren't 'specially good at long-term planning, so they don't make the appropriate choice a year ahead of time -- don't even think about it.  And so many people genuinely believe they have no option but to live paycheck to paycheck, they figure they don't have the $100/month to spare. 

However, I'll give the "can't do it" crew a pass on one thing:  They don't always know what type of daycare they'll find /how much it'll cost a year ahead of time, so they don't always know how much they should set aside.  For example, our city offers very low cost summer care at the Boys and Girls' Club ... but the number of people who can get in is relatively low (people camp out to get a spot), so no one knows for sure whether they'll qualify for that.  Lots of parents "piece together" a summer of care -- two weeks with the grandparents, one week of family vacation, a week of karate camp, then a week of sleep-away camp with scouts, finally a week of day camp at the dance studio, and each parent'll take off some time -- but it's really hard to guess what activities might present themselves next summer, whether your kid'll want to go to expensive theater camp or moderately-priced soccer camp, and what those activities might actually cost next summer.  So, yeah, you and I might say, "I'll save $150 for each week of summer, and I'll probably have some leftover', the non-savers often see this as just too many guesses ... so they don't bother. 

[mm1970]

I may be missing something, but if you know you will only have summer childcare expenses, and those expenses will be for example, $1,200.  Can't you just set aside the $100 a month, then submit for reimbursement at the end of August, get the $800 back, and then get $100 a month for Sep-Dec.?

The way my dependent care flex spending account works, yes, that would cover it. What MayDay is describing seems to be different.

The way it worked for my old employer, yes.

For H's employer, no.  Why?  I have no idea.  I assume they were just thinking about birth to age 5 daycare, and it would work fine for that.  It fails for summer only care.  It is just rules the plan provider and/or H's employer decided on, it isn't an issue of what the law allows.  And its a big corporation, so unlikely that us fighting it would result in rules changes.

I would rather just abandon the whole DCRA/FSA/etc accounts and make the first whatever thousand dollars deductible on your taxes, so that people don't have to try to predict in advance what their costs will be.  But no one asked me!

Is this different than an FSA?  My old employer had the FSA and a different thing where they would give you money.

My current employer requires equal amounts be deducted every paycheck, just fine.

But I'm lazy, so for example, I waited until I'd spent $3000 and submitted it.  I got the $1800 that I'd put in there, and now I get a check for $190 every two weeks.

When I stopped getting checks, I submitted for the next amount.

So, does that not work?  I mean, at the end of the summer you submit your $5000 for the summer.  Then you get a check for $3000 (or whatever you have paid in so far), then get a check each pay period until the end of the year.

I submitted my last one a couple of months ago (my childcare costs are $15k a year).  I get a check for $190 every two weeks, right after payday.  It's a pain, but I only have to submit for my reimbursement once, and they automatically send me a check.

[clarkfan1979]

Does anyone on here work at Patagonia?  I read this article about their on-site daycare for their employees and think it is a brilliant idea. How it is explained in the article I don't know why this is not more common.

https://www.fastcompany.com/3062792/second-shift/patagonias-ceo-explains-how-to-make-onsite-child-care-pay-for-itself

I don't work at Patagonia. However, I work at a college and they have on-site daycare. It's also discounted. Most colleges and universities provide this for their students and employees.

[SeaEhm]

Does anyone on here work at Patagonia?  I read this article about their on-site daycare for their employees and think it is a brilliant idea. How it is explained in the article I don't know why this is not more common.

https://www.fastcompany.com/3062792/second-shift/patagonias-ceo-explains-how-to-make-onsite-child-care-pay-for-itself

I don't work at Patagonia. However, I work at a college and they have on-site daycare. It's also discounted. Most colleges and universities provide this for their students and employees.

Those two facts are awesome to hear!  It seems like this idea could be set up in a way that would easy be better for parents and employers.

Can anyone play devil's advocate and share reasons why a company having a on site daycare is a negative?

children too close for comfort? Parents may be distracted from work by going to visit their children too frequently?

[mamagoose]

Regarding on-site childcare, my husband's employer claims it as a "potential liability" - the same reason they won't provide on-site fitness facilities. Over 5,000 employees there.

[marion10]

If you have a long commute - you may prefer to have daycare closer to home and not subject baby to a long commute. I see people here taking kids to daycare on public transportation and it seems like rough way to start the day. Also- if you leave your job- you have to change daycare. Depending on where parents work- if you are on site- then one parent might have to do both drop off and pick up.
With day care being near our home- we could split this up.