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Issue Alert - 03-03-04

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Date:

Apr 01, 2003

Issue Summary:

FIA will now send Child Day Care payments for Day Care Aides to the recipient in the recipient's name. The recipient will then have to pay the Day Care Aide with that money.

Persons Affected:

Recipients or CDC assistance whose children are cared for by a Day Care Aide.


Background

Child Day Care assistance

What's Happening?

Effective April 1, 2003, FIA will begin to send payments for Day Care Aides to the recipient of CDC assistance. The payments will be in the recipient's name and the recipient will have to pay their provider directly using that money. FIA made this change to clarify that FIA is not the Day Care Aide's employer. The recipient is the Day Care Aide's employer, according to the IRS, and the recipient will be responsible for paying any taxes related to employing that person. The payments that recipients of CDC receive to pay Day Care Aides will not be considered income for any FIA program.

What Should Advocates Do?

Advocates should assure that their clients know about this change in the payment system for Day Care Aides. Advocates should make sure that their clients know they have to pay their Day Care Aides directly with the money they receive from FIA. Advocates should also make sure their clients know that they are considered to be the Day Care Aide's employer and are responsible to pay related taxes. Clients who want help in finding alternative child day care arrangements or in figuring out what taxes must be paid, should contact their local Child Care Coordinating ("4c") Agency.

What Should Clients Do?

Clients should be aware of this new payment system and be sure to pay their Day Care Aides with the money that FIA sends them. Clients should also be aware that they are considered the Day Care Aide's employer and are required to pay taxes related to employing the Day Care Aide.Cients who do not want to be responsible for the aide's taxes, should consider other types of child day care. Clients should contact their 4C agency (child care coordinating agency) for more information about their tax duties and/or help in finding alternative child day care arrangements.

Finding Help

Most legal aid and legal services office handle these type of cases, and they do not charge a fee. You can locate the "free" legal services or legal aid office that serves your county on the Michigan Legal Assistance Network website (http://www.mlan.net/locate.html) or look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738