Learn More About Tier I & Tier II

 

Every qualified daycare provider is eligible for reimbursement on the Food Program.  The level of reimbursement received monthly is determined by which Tier a provider belongs to (I or II).  Tiering was instituted by the USDA and Congress to assure that those daycare providers who fall within the national guidelines of poverty received a higher reimbursement than those whose household income placed them above the poverty level.  There are three methods of Tier level.

By regulation, all income information is confidential.

By Area – Any school with more than 50% of their students who apply and qualify for free or reduced school lunches become qualified by school area.  Any daycare provider who lives within a qualifying school area are automatically classified Tier I (higher reimbursement) for their daycare children (in order to claim their own children on the program, providers must qualify using household income).

By Census data – Using the most recent census information, if a household lives within a “pocket of poverty” where the majority of households are living 185% of poverty, then that area qualifies as Tier I (in order to claim their own children on the program, providers must qualify using household income).

By Income – if a daycare provider does not qualify by area or census, they can submit documentation to qualify by income.  This is a total of household gross income (before taxes and deductions).  For any member of the household who is self-employed, you may submit your most recent copy of the IRS tax forms Federal 1040 (the first two pages) and ALL schedule C’s.  As a daycare provider, you are self-employed.  If the total income falls below the maximum guidelines for household size, then that provider is qualified as a Tier I provider (the guidelines are established every July 1^st by the USDA).

Any provider that cannot qualify by one of these three methods will be classified as Tier II (about 60% less reimbursement that Tier I).  But even then, if you are classified as Tier II and take care of children from lower economic households, you can choose to be a Mixed Tier home.