Child Care and Development Fund

How It Works

The Child Care and Development Fund (CCDF) provides federal funding to States to assist low-income families obtain child care so they can work or attend training/education. Assistance is provided in the form of a contracted childcare slot or a voucher that can be used with any childcare provider who meets state requirements. Families typically pay a monthly co-payment and the CCDF subsidy covers the difference between the co-payment and the full cost.

The federal government has established broad general requirements for state CCDF programs:

Children must be less than 13 years old and living with parents who are working or enrolled in school or training.
Income eligibility is set at a maximum of 85% of the state median income.

However, states have significant discretion with income limits, work requirements, payment rates, family co-payment rates and other program rules. In 2005, the income eligibility between states varied from $17,784 to $46,248 for a family of three.

CCDF is authorized under the Child Care and Development Block Grant Act (CCDBG) and administered by the Department of Health and Human Services. CCDF subsidies are funded through a combination of state and federal funds. Federal funding is subject to the annual appropriations process. CCDF provides states with an annual base amount as well as matching funds for states that meet their maintenance of effort and matching requirements. States may also transfer money from TANF or other sources into their CCDF program.

CCDF subsidies are not a federal entitlement, so there is no guarantee that all families who qualify will receive a subsidy. The only state that guarantees benefits to all eligible families is Rhode Island.

History

The Child Care and Development Block Grant (CCDBG) was enacted under the Omnibus Budget Reconciliation act of 1990. The Personal Responsibility and Work Opportunity Act of 1996 amended and reauthorized the CCDBG and consolidated three federal childcare programs previously serving low-income families under the program formerly known as Aid to Families with Dependent Children (AFDC).

Policy Update

For the sixth consecutive year, the Administration has proposed a freeze in CCDBG funding in its FY 2008 Budget. Research shows the CCDF is successful. Parents who receive assistance with child care are more likely to be employed and children in quality child care have improved health and development outcomes. By the Administrations’ own predictions, 300,000 fewer children would receive child care assistance by 2010. For the full report, click here.

Links

U.S. Department of Health & Human Services, Child Care Bureau

National Center for Children in Poverty

Center for Law and Social Policy

References

National Center for Children in Poverty. Child Care and Development Fund (CCDF) Subsidies. Available at: http://www.nccp.org/policy_long_description_13.html. Accessed February 22, 2007.

Butler A, Gish M. The Child Care and Development Block Grant: Background and Funding. April 7, 2003. Available at: http://kohl.senate.gov/childcare2.pdf. Accessed March 1, 2007.

Ewen D, Matthew H. Families Forgotten: Administration’s Priorities Put Childcare Low on the List. February 7, 2007. Available at: http://clasp.org/publications/2008_budget_child_care.pdf. Accessed April 19, 2007.