Meet the new moms using up to $700 in monthly basic income to afford childcare. It could be the answer to helping parents stay employed.

Guaranteed basic income helps some parents pay for childcare — participants and experts say it leads to better job and educational outcomes.

• Guaranteed basic income helps some parents pay for childcare and stay afloat during maternity leave.
• With cash payments, parents report more job security and higher educational outcomes.
• Basic income critics say the programs are too expensive and discourage participants from working.

Celeste Lord-Timlin just had her first baby. Siobhan is about a month old, and it's a victory when she naps just long enough for Lord-Timlin to rest or take a phone call. Meals or a shower sometimes have to wait until her husband returns from work and can hold the rosy-cheeked newborn.

The 31-year-old and her husband love being parents. She said motherhood can feel "selfless," but it brings her so much joy to have Siobhan sleep on her lap in their Flint, Michigan home.

"I am so thankful that I get to be her mom," she told Business Insider.

Still, children are expensive. Lord-Timlin was thrilled to find out she was pregnant, but she and her husband have been worried about paying for diapers, nursery essentials, pediatrician visits, a car, and grocery trips. And when Lord-Timlin returns from maternity leave to her full-time job in the public service field, the couple knows they will have to pay thousands of dollars a month in day care fees. It felt overwhelming.

Then Lord-Timlin enrolled in RxKids. The guaranteed basic income pilot is offering Flint-based mothers who had or will have children this year $1,500 during pregnancy and $500 a month through their baby's first birthday, no strings attached.

So far, the pilot has over 900 participating families. They were not required to meet any household income requirements, which are typical criteria for basic income programs. RxKids is partially financed from the federal Temporary Assistance for Needy Families (TANF) fund and has already provided a total of $2 million to new parents. It's expected run through at least 2026, and program leaders hope to extend funding for as long as possible.

The US has launched over 100 guaranteed basic income pilots — and RxKids joins a growing number focused on families. The cash payment model is an increasingly popular approach to poverty reduction in cities like Los Angeles, Denver, Chicago, and Philadelphia. Pilots offer participants, who are often low-income individuals, recurring cash payments for a set period of time to spend as they choose.

As these pilots publish results — which include anecdotes from participant interviews, job outcomes, and spending data — there's a trend emerging: Parents are using their monthly payments to afford the soaring cost of childcare. And, with stable childcare, parents like Lord-Timlin can have stronger job security and financial freedom.

Shafeka Hashash is the associate director of guaranteed income at the Economic Security Project, an advocacy nonprofit. She told BI that guaranteed basic income lets parents choose a childcare and employment situation that works best for their families.

"Not only are they having a more stable source of employment, they're able to spend more time with their kids," she said.

The cash has already allowed Lord-Timlin to buy a stroller so she can take Siobhan on walks through their neighborhood. It's also helping her pay for dual master's degrees — tuition is costly, and Lord-Timlin lost her FAFSA benefits because she had to switch to part-time enrollment during her pregnancy. She said GBI gave her the flexibility she needed to stay in school. She's expected to graduate next May.

Parents use guaranteed basic income to pay for childcare, improve job outcomes

Nearly one in four parents report being fired from their jobs due to lack of steady childcare, according to a survey of 806 working parents across the US by ReadyNation Council for a Strong America, a bipartisan nonprofit, that was published in 2023. The vast majority of the parents surveyed said childcare challenges hurt their time and productivity at work — leading to lower earnings and forgone promotions.

Meanwhile, it will cost parents about $26,000 this year to raise one small child in America, about $12,900 of which often goes to paying for childcare. But 13% of American households live at or below the federal poverty line, which is $25,820 annually for a family of three, according to the nonprofit United Way. And around 29% of American households live paycheck to paycheck.

Shamarra Woods, 31, is a single mother in Atlanta. When her daughter was a newborn, Woods was selected as a participant for in In Her Hands, a guaranteed basic income pilot for low-income Black women in Georgia. She had previously been struggling to get by and often had to choose between paying her electricity or rent.

The pilot, run by the nonprofits Georgia Resilience and Opportunity Fund and GiveDirectly, gave 650 participants $20,400 over two years. Beginning in 2022, one group received $850 a month for 24 months, while Woods' group received $4,300 during the first month of the program, then $700 a month for the following 23 months. Payments concluded in spring 2024.

Woods said she spent the first $4,300 to pay outstanding bills, then bought the formula, diapers, and clothing she needed for her newborn baby. And, as her daughter grew into a toddler, Woods directed the money toward day care. The average childcare cost in Atlanta is $20 an hour — which amounts to over $3,000 a month if a parent works full-time.

Woods recently earned a promotion and raise at her management job, an accomplishment she credits to being able to afford steady, predictable childcare. She feels some anxiety about continuing to pay bills now that her GBI payments have ended, but the promotion makes her feel prepared to support her daughter.

"I really wanted that for my daughter," Woods previously told BI. "I wanted to build a really good foundation — put her in good schools and really invest in her education. I still want that."

GBI joins other safety nets for families — but critics worry cash payments aren't sustainable

To be sure, there are still questions about the continued feasibility of guaranteed basic income. More research is needed to determine how GBI impacts participants in the long run, as most pilots only study short-term financial and job outcomes along with participants' self-reported spending data.

GBI continues to face political and legal challenges throughout the US. Some lawmakers worry that the millions of dollars it costs to run each pilot isn't sustainable for city, federal, or private funders. Others say that cash payments discourage work.

It's also true that not all families struggle to afford stable childcare. Care costs are often at their highest when a child is an infant, but nearly 30% of parents say the expense becomes manageable once their child is old enough to attend school, per the financial research firm Nerdwallet. In the same survey — which polled 2,000 US adults in December 2023 — one in five parents with children under the age of 18 said the cost of childcare is their biggest financial stressor. The other 80% of parents cited other expenses, like housing.

Hashash said that guaranteed basic income can help parents cover these childcare costs and build a career with predictable hours. With cash payments, she said many parents can switch to working one stable job, instead of having to cobble together a living wage with three low-paying gigs. It can also give families the resources they need to pursue higher education — and, in turn, potentially land higher-paying roles.

"The ability for families to spend that time with their kids: It's not always the most easy thing to quantify in a data point," Hashash said. "That's why it's so important to hear folks stories, and that's what we hear every single time."

The GBI model joins other social safety nets for low-income families like the child tax credit and federal programs like the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) and TANF, she added.

As for Lord-Timlin, she's expected to return to work soon. She plans to use her guaranteed basic income to afford childcare for Siobhan, who she wants to raise to be "generous" and "think beyond herself," she said.

"Anyone who's had a child knows that this is not like a luxury income," Lord-Timlin said, referring to the cash payments from RxKids. "This is just assisting us in our time of need."

Are you a new parent struggling with the costs of raising a child? Have you benefited from a guaranteed basic income program? If you're open to sharing your story, reach out to this reporter at allisonkelly@businessinsider.com.