State Child Care Programs

Basic Concept:

  • Child care subsidies on both the federal and state level provide low-income families that contain parents who are working or gaining education or training with financial assistance for child care. This is motivated by a goal to improve the quality of care for all children.


Federal Subsidies: The Child Care and Development Fund (CCDF) Program:

  • This federal program provides monthly financial assistance to low-income families with children 13 years and younger to facilitate access to child care so parents can work or attend a job training or educational program.

  • It is a federal and state partnership program and is administered by states, territories, and tribes with support from the Administration for Children and Families’ Office of Child Care.

History of the Program:

  • Funding for child care subsidies was first authorized in 1990 under the Child Care and Development Block Grant Act, which was enacted under the Omnibus Budget Reconciliation Act of 1990 (provided group health insurance coverage, among other things.)

  • Then, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) appropriated new entitlement child care funds under section 418 of the Social Security Act and reauthorized discretionary funding under the 1990 Child Care and Development Block Grant Act.

  • Specifically, PRWORA required that child care funds be transferred to state/tribal Lead Agencies for the CCDBG and be administered by that agency.

  • PRWORA also consolidated three federal child care programs previously serving low-income families under the program formerly known as Aid to Families with Dependent Children. The Administration for Children and Families (ACF) named these combined funds the CCDF, Child Care and Development Fund.

  • These first regulations (child care provisions of PRWORA) that established the CCDF program went into effect in 1998, changes were made to the program when it was reauthorized in 2016, which are described below.

How Subsidies are Distributed:

  • Parents typically receive subsidies in the form of vouchers that they can use with a provider of their choice – such as a relative, neighbor, child care center, or after-school program.

  • Care providers who accept CCDF vouchers also receive monetary reimbursements from their State government to ensure that each subsidized child is receiving quality care.

  • Reimbursement rates are determined by the states (amount is part of state expenditure.)

CCDF Eligibility Requirements: 1

  • The fund aids low-income families with children 13 years old and younger whose parent/guardian(s) are able to provide proof that their gross income is at or below 85% of the state median income and that for a minimum of a 12-month period, there is parent participation in sustained work, training, or education activities.

  • Eligibility periods that are longer than 12 months promote continuity of care and extend the time period that eligible children and families have access to child care assistance.

  • However, children may be eligible even if their parents do not meet work or activity requirements:

  • The agencies that discern eligibility are not required to determine a family’s need for care based only on the amount of hours a parent attends work, education, or training activities. Agencies have the flexibility to consider each child’s specific developmental needs and family circumstances (such as jobs requiring split work schedules, breaks between education courses, and sleep time for parents who work multiple jobs or have non-traditional work hours.)

CCDF Statistics:

  • In FY 2017 2, the CCDF served 1.32 million children, mainly those over the age of six and predominantly children in family child care homes (see charts.)

  • In 2017, $5,799,967,325 of federal funds were allocated to CCDF. In FY 2019, the CCDF was allocated a total of $8,140,240,000 in federal funds 3.

  • These values do not include state funding for this program and are different from the fiscal year’s total expenditure.

  • Age of children receiving CCDF subsidies in FY 2018:

    • 27 percent were infants and toddlers (younger than 3 years old)

    • 28 percent were preschoolers (3 & 4 years old)

    • 10 percent were kindergarten-aged (age 5 years)

    • 34 percent were school-aged (6 years & older)

  • How care was provided in FY 2018:

    • 73 percent of children receiving subsidies were cared for in a child care center

    • 20 percent were cared for in family child care homes

    • 2 percent were cared for in the child’s own home

    • 4 percent had invalid data or did not report any data

*Note: The category Family Child Care Home Providers describes providers that offer care in their own home to one or more children who aren’t related to the provider while Child Home Providers describes providers that care for a child in his/her own home, such as a babysitter, or another non-related or related caretaker.

Shortcomings of all Child Care Subsidy Programs:

  • The number of care providers willing to accept subsidies is dropping. This is potentially because providers do not want to risk receiving less payment than they deserve from reimbursements from the state, because the program is not fully funded. In 2018, for example, the number of child care providers taking subsidies dropped from 4,135 in 2013 to 2,147, giving many subsidy-receiving families fewer care options from which to choose.

  • Additionally, less children are receiving subsidies. This is because although funding for child care programs has overall increased in recent years, the programs have yet to reach the entire eligible child population. Until further funding is provided, it leaves states no choice but to tighten eligibility standards.

Endnotes

  1. Information from the US Department of Health and Human Services, https://ccdf-fundamentals.icfcloud.com/family-income

  2. Information from Administration for Children and Families Preliminary FY 2017 Data, https://www.acf.hhs.gov/occ/resource/characteristics-of-families-served-by-child-care-and-development-fund-ccdf

  3. Statistics from the Administration for Children and Families 2019 CCDF Allocations, https://www.acf.hhs.gov/occ/resource/fy-2019-ccdf-allocations-based-on-appropriations