Basic Facts About Child Care Assistance

Aug 02, 2007

Stable, affordable child care is essential for families to work and to succeed financially. High-quality child care is often unaffordable for families, especially low-income families. The Child Care and Development Block Grant (CCDBG) is the primary source of federal funding for child care subsidies for low-income working families and funds to improve child care quality. CCDBG helps families receiving welfare, families transitioning off welfare, and low-income working families. Most states provide parents with vouchers or certificates and families may choose to use any legally operating child care provider. Some states also provide assistance through grants or contracts. Over half of children receiving CCDBG-funded assistance are served in child care centers. Families may receive assistance for children up to age 13; 64 percent of children receiving assistance are under the age of six. CCDBG allows states a great deal of flexibility in how they design their programs, within minimal federal guidelines. States set income eligibility, reimbursement rates for providers, and family copayment rates.

States are required to spend at least 4 percent of CCDBG funds to increase quality and expand access to child care programs. The majority of these funds are spent on basic health and safety investments, supporting accreditation or quality ranking systems, professional development, and caregiver training and education.

Some states also provide child care assistance through Temporary Assistance for Needy Families (TANF) funds. Federal TANF funds may be spent directly on child care assistance, in the form of vouchers given to parents. States may also choose to transfer up to 30 percent of their annual TANF block grant to CCDBG. TANF funds may also be used to support early education programs.

Currently, federal and state funds for child care assistance fall far short of meeting the need. Inadequate funding levels in recent years have led to a steady decline in the number of children receiving child care subsidies. It is estimated that only one in seven children who is eligible for child care assistance, based on federal eligibility rules, receives any help. Due to near flat federal funding for child care, many states have made policy changes in recent years that restrict the availability of child care assistance. In 2005, 22 states made cuts in child care.