Hi,

Ok, so I have a friend "another provider"that mention something she plans to due that I just thinks is un-ethical.

Long store short-I had a previous client refer a mbr of her family to me for child care; at the time I could not take the kid...so I refer her to my provider friend and she took them.
Back story-I do not have a personal or business relationship with the referred parent...but do with the referring parent. Now the the "referred parent" is able to receive state assistance "provider friend" will accept it under this conditions. No tax statement given, parent has to pay difference between state pay and providers rates. When provider mention this I said it wasn't right...but she didn't seem to care and would still set it up like this. I feel I should call my previous client...shoot the breeze with her and just see if something comes up about this...if so I would in so many words say "That's wrong"

What do you think?

What would you do?

Thanks

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I personally would stay out of it. It certainly does sound unethical...but why add drama to your life? If your provider friend is not being ethical, I am not sure it is your concern. I don't think ethics are something that can be policed, but rather are personal. As long as you aren't doing something unethical, I think it isn't your issue to handle. It will probably just stir up problems and hard feelings...

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The provider can't accept state pay under the table. Even if she thinks she is doing it that way, the state is reporting the money paid to her.

Parents don't need a tax statement from the provider to claim their child care expenses so even if the provider is not willing to provide a tax statement (she isn't even required to do so by law) the parent can still claim their expenses.

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Blackcat that's always been my understanding of it too. I have never had state assistance parents, so I can't speak 100%, but I don't think there is any way possible if the gov't is paying you to do it under the table. I'm pretty sure that the gov't will have record of that. Or are you talking about the part where the family is paying the difference between what she charges and what the state pays? For instance if she charges $25 a day and the state pays $20 a day, the parent pays an extra $5.00. Are you saying that she is doing that portion under the table? All the parent has to do is keep her receipts to what she is paying and the provider will get in trouble for not claiming the income.

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I'd stay out of it. The parent can still claim the child care on their taxes. I don't see anything wrong with charging the difference.

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I personally would stay out of it. It certainly does sound unethical...but why add drama to your life? If your provider friend is not being ethical, I am not sure it is your concern. I don't think ethics are something that can be policed, but rather are personal. As long as you aren't doing something unethical, I think it isn't your issue to handle. It will probably just stir up problems and hard feelings...

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Yea, the state pay will be reported by the government so provider has to claim as income... but the difference between what the state says the parent has to pay "parent fee" and what the provider actually charges...the provider wants the parent to pay out of pocket and will not give her a tax statement.

I know the parent can still claim the expense without the statement, however this provider only takes cash and does not give receipts. I agree this is not my job to inform an un-informed parent on how to take care of business...but I hate people trying to get over on other people.

This really sucks!

Thanks

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I would stay out of it. I certainly wouldnt get someone like the previous client involved (who is not the DCP in this scenario). The provider told you something private about a current daycare parent, I would think that it would be unethical to discuss the DCPs personal financial matters with their relative/your previous client. If you feel that there is some breech with licensing regulations, you could always report that anonymously.

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Here in my State if you agree to accept the state program...then your're agreeing to the pay scale they have in place and can not charge the parents out side of that. Even the parent fee is based on the parents allowable income per-state guidelines.

I guest I feel so strongly about this too because I once receive state funds to help pay for childcare and what have been very upset if my daycare would have charge me extra just because the state didn't pay their full rates for my kid.

Thanks

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Here it is typical to charge the difference (pd days off as well)

The provider has to be given a check from the state, they will keep track of that.

It is quite illegal to not claim the difference, BUT that isn't harming kids or going over ratio, or anything like that so I wouldn't say/do anything.

My dh occassionally does jobs for free/barters work. He did a bathroom fixture install for a friend of a friend, and then the friend did our drywall in our basement. The drywall job ended up being MUCH larger/time consuming compared to the bathroom, so we ended up paying him. He isn't claiming the income. That isn't my problem, I can still write it off because I have the receipt. Yes, it might be unethical, but it isn't something I would stick my nose in.

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On the other hand, why is it fair for me to accept less for one child over another? I don't do the full amount of work/care for both?

In my state, parents sometimes have a co-pay (state pays max 125, provider charges 150, parent has a $25 copay). I no longer accept state pay, but if I did, I would add it back into my handbook that parents are required to pay the difference, including paid time off, when kids or provider are out sick, etc.

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It sounds like a sucky deal but in all honesty, I feel that it is the parents responsibility to know their rights in regards to who they pay and how.

If this parent is choosing a provider who only accepts cash, then that is on her. I personally would not choose a provider who told me that as I would immediatley suspect there was something shady going on.


That makes the situation even suck-ier (lol! is that even a word?) But again, the parent should know this as SHE is the one applying for and allowing the state to make payments on her behalf.

The parent should know that the provider isn't suppose to be charging more but is still doing so.

I still think this whole thing falls on the parents shoulders as the recipiant of a subsidized program it is their responsibility to know the rules and regulation of the program.

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Totally agree Why should you lose income...and if you can't afford too then dont take part in the program....as the business owner you have choice. Yes, here too parents have a "co-pay/parent fee". But this proivder wants to charge on top of that..."which the program pprgram doesnot allow.

Look at it this way...if you get food stamps...should wal-mart limit the type of food you can buy???

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Ahhh ok I see. She is charging more than allowed to. THAT could be fraud, in my state if she is caught she could be not allowed to be a subsidized provider, again, ever AND have to pay it ALL back.

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I would really check into that. I do not believe this is accurate. There is no way the government can tell you you have to accept less for a child because they are state pay.

Typically the law is that you cannot charge state pay clients MORE than other families and you can require that they pay the difference between what you charge every other client and what the state pays.

The provider should recieve a 1099 from the state agency that will detail her payments recived and it is to be filed with her tax return, as it is reported directly to the IRS. She should also claim the other amount recieved from the parent, and if she does not the parent can still claim it and the IRS will contact the provider regarding the discrepancy in what she claimed as income and what was reported by her clients.

As far as the OP.....it really is none of your business, and calling up your client and talking about it would be more unethical than what the other provider is doing, IMHO.

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Well, I'd like to say yes, and I DO think there should be limits as to what food you can buy with food stamps. It peeves me off to see people fill their cart with serious crap to feed their children, knowing that it will last a brief amount of time, is not nutritious and in a couple of weeks they will be going hungry. Grrrrr......soory for going off topic, but that kinda thing makes me angry

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I know in Washington State you can't charge the parents the difference if the state pays less. So if for example my day rate is $26 and the state rate is $22. I can't bill the parents the $4 rate difference. We can get in a lot of trouble if we do. Any co pay is taking out of the amount the state pays. Even with a copay you don't get more.

Personally while it is unethical, I would stay out of it. But then again, I'm a non-confrontational person so I may not be the best person to give you advice. Maybe contact your licensor.

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Man this is a hott topic

I love the feed back from this community.

To clarify or add more information to the topic, the provider is a friend...well some one I have been looking upto "respecting" as it relates to the daycare business..and lately I have been seeing a side of her I really don't like...makes me re-think our friendship. But, after all the fed back I realize it's not my business and I will stay out of it. Just really peeeees me off when I referred these people and she's trying to pull a fast one on them. I agree the parent should know her rights...but not everyone realize they have rights. And I know from dealing/taking to this provider she can come across as a big Bully very intimidating for some people.

On a personal note: Having received state assistance before for childcare & food & health...I don't think it's far to be pre-judged as some one not able to "pay their bills or some one who should get less food options then others or less health insurance"

Anywoo-I gotta go do some work to do "end of month"

Thanks yall for the vent.

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i totally understand your frustrastion frugal.. i am in texas and you most certainly CANNOT charge a client the difference between what you normally charge and their authorized charges. as you said, you have the choice to accept state subsidized clients and if so you will need to follow their rules. This is explained in the providers training, probably in the parents as well, but i dont know..these programs are so understaffed who knows if they have time to explain every detail..i doubt that i would say anything but i also wouldnt report alot of other things either..

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In Iowa you can't charge the state more than you charge private pay but you can charge private paid more than the state pays. You must agree that you will not charge any additional fees for the state paid client beyond the copay the state may require the parents to pay. You can't have parents make up the difference between what the state pays and your private pay rates. If you charge 150 a week and the state max is 120 you can't ask or take the 30 from the parents. You must agree to only take the 120. If you take any money other than the 120 it is a crime and you will ne banned from accepting state funding clients.

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This is utterly ridiculous. I can understand not being able to charge more than you charge private pay, but to HAVE to accept less than you charge? No wonder so many providers will not accept state pay clients. Here, they pay what I charge or I can charge the parent the additional fees.

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Thanks allsmiles...I will pray on it...and hope that the parent finds care elsewhere...

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Crystal,

I agree it sucks...it is the government after all.

These programs are no different then any other state assistance program...look at housing "government says on the south side of town the "moderate-income limit is $50,000 for a family of 4 this gives them free rent up to $800" and on the north side its $70,000 free rent up to 500" but my rental property is is worth 150,000 and rents for 1,300.00 a month. Well if I participate in the program and accepted the $800/$500 I can not charge the difference on the back in.

Yes, it sucks be time...but the law is the law and right is right. It's unfair to try and get over on someone like this. It's a choice to take the state pay families the state is not holding a gun to her "provider in question" head.

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I like your state system better. It's more fair.

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Like nannyde, crystal, and snips&snails pointed out it is different in every state and probably the type of child care. I'm in California, one of my ECE teachers used to do home daycare and is now the director of the preschool/daycare center at my college. They charge a flat monthly fee rate based on the schedualed attendence instead of a weekly or daily fee to avoid issues with the state as far as it only paying for "when the child is in attendence". But they say flat out in their contracts that parents on substidized programs are responsible for paying what the state doesn't pay (whether they get full coverage or not including late fees/field trip fees). They also can only have their child attend when they are at work or school (may be different if it is only for stricktly preschool instruction hours) and if they take their child to school on the days they don't work/go to school or extra curricular activities they are are expected to pay.

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Wow here in California my subsidy person explained that the subsidy was intended to ASSIST parents in covering the cost, not to necessarily cover the full cost. Parents are expected to pay any difference between the state max & the provider's fees.

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I believe this is the case in my state, although I do not have anyone on state pay. We are told we can't charge a person on state pay more than private pay, but they are expected to make up the difference. In my mind a state that says you can't have the parent make up any difference is making it more difficult for parents on state pay to find child care

As for the tax thing - there was a provider in my town who would have parents pay under the table. Parents seemed to love her and she was always full. This was all private pay, though. I believe her rates were lower, because I can only imagine a hit it must be come tax time if you can't claim those credits.

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I completely agree! I am legally allowed to charge the difference but i no longer accept state pay as I had a parent NOT working and didn't tell me. Subsidy caught up with her----two months later and I had to pay it ALL BACK. full time care, for TWO kids. I have a judgement in court against her, but I wont ever see a penny of that money as since she was no longer eligible for subsidized daycare, she went straight to welfare and has been living on the system ever since.

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This peeves me . Why should you have to pay it back ?!?!?! You did your part so the parent that was dishonest should have to pay it back, not the hard working provider. Grr.

Im also in CA and my SIL forgot to report a raise that she had gotten at her job to her subsidy payment specialist and they dropped her from the program when they found out at her yearly re-evaluation. They also made her pay back EVERY CENT THAT THEY HAD EVER GIVEN HER. Another provider in a similar situation as OP had a client that was going to school and had subsidized child care during her school hours. Well she stopped going to class and dropped but still kept taking her child to DC. Well they asked for her grades and well she didn't have them so they made HER pay it all back, not the provider. THAT's what should happen, why should the honest people have to pay while the dishonest people get away with it.

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Its so commonplace here to charge parents the difference between the state payment and the actual rate, I didn't even understand what the thread was about until I got about 10 posts in....

DSS tells you that's what you should do, because they pretty much never pay your entire rate unless you're really low.

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