Child Care Assistance: How Subsidized Care Is Actually Awarded

Child care in the United States costs more than college tuition in much of the country, and there is a federal program that pays most of it for low- and moderate-income working families. Around one in six eligible children receives it.

The gap is not caused by the eligibility rules. It is caused by the funding, and by how little the program is explained to the people it is for.

What the program is

The Child Care and Development Fund is a federal block grant that states use to subsidize care so parents can work, train or study. You will rarely hear that name: states call it a child care subsidy, a voucher, a certificate, or something local.

The state pays the provider most of the cost; you pay a co-payment set on a sliding scale by income.

Who qualifies

• Income. Federal rules allow states to serve families up to 85% of state median income. Most states set their entry limit lower — often between 150% and 250% of the federal poverty level — while allowing families already enrolled to stay until they reach the 85% ceiling.
• An approved activity. Working, looking for work, in training, or in education. Some states include participation in a TANF work program or treatment for a health condition.
• A child under 13, or under 19 with a disability or under court supervision.
• Cooperation with child support, in some states.

The entry limit and the exit limit are different numbers. This is the most useful thing to know about the program. A pay rise that takes you over the entry threshold does not end your subsidy — you keep it until you cross 85% of state median income. Families turn down promotions and extra shifts over a cliff that, in most states, is not there.

What you pay

Co-payments are set on a sliding scale by income and family size. Federal rules treat a family co-payment above 7% of household income as unaffordable, and states have been moving their scales to that benchmark — several now charge nothing at all to the lowest-income families.

Watch for one thing: if the provider charges more than the state’s payment rate, some states allow them to bill you the difference. Ask any prospective provider, before enrolling, whether they charge above the subsidy rate and what that would cost you each month.

The waiting list

This is a capped program, not an entitlement. Meeting every rule does not guarantee a place — it puts you on a list, which in many states runs to tens of thousands of families and in some is closed to new applications altogether.

Because of that, three things matter:

• Apply before you need it. Apply while pregnant, or the day you start looking for work. The list does not move faster because your need is urgent, unless a priority applies.
• Claim every priority. States must prioritize very low income families, children with special needs, and children experiencing homelessness. Many add priorities for teen parents, families leaving TANF, survivors of domestic violence and military families. Say so, and document it.
• Keep your contact details current and respond the day a letter arrives. Places are reallocated quickly.

Twelve months of stability

Once you are in, federal rules guarantee a minimum 12-month eligibility period. During it, your subsidy cannot be cut off because income rose — so long as it stays under 85% of state median income — and generally cannot be ended because of a temporary change in your work or study.

Losing a job does not end the subsidy immediately either: states must allow a period of continued assistance, usually at least three months, while you look for work. Without that rule, losing a job would cost the childcare needed to find another one.

Choosing care

The subsidy follows the child, and parental choice is built into the law. Depending on your state you can usually use:

• A licensed child care center
• A licensed family child care home
• A faith-based or school-based program
• Before- and after-school and holiday programs
• In many states, a relative — a grandparent, aunt or uncle — who registers as a license-exempt provider and is then paid

That last option is regularly overlooked and can be the best answer for shift work, night work or an infant. Ask specifically whether your state pays relative caregivers, and what registration involves.

Other routes to affordable care

If the list is long or closed, these run on separate rules and separate money:

• Head Start and Early Head Start — free early education with health, nutrition and family services attached. Generally for families at or below the poverty level, but children who are homeless, in foster care, or whose family receives TANF or SSI are categorically eligible regardless of income. Early Head Start covers pregnancy to age three. Find a program at the Head Start locator.
• State pre-kindergarten — free for four-year-olds in many states, and universal in some regardless of income. Run by school districts, so apply through the district.
• The Child and Dependent Care Credit — a tax credit for care costs that allow you to work. Claimable alongside a subsidy, on the costs you paid yourself.
• A Dependent Care FSA — if your employer offers one, it lets you pay for care from pre-tax salary.
• Military fee assistance — separate programs for service members, including in-home and community care.
• Provider scholarships. Many centers hold sliding-scale places funded by local charities. Ask directly; they are almost never advertised.

How to apply

Applications go to your state child care agency, or in many states to a local child care resource and referral agency. Start at the ChildCare.gov state directory, which links to the right office in every state and territory.

Bring proof of income, proof of your work, training or study, identification and birth certificates for the children, and proof of address. Apply for TANF, SNAP and Medicaid in the same visit if you have not already — it is usually the same agency, and one interview can cover all of it.

Your state’s resource and referral agency is worth calling even if you never receive a subsidy. They keep the list of licensed providers with vacancies, know which ones have scholarship places, and it costs nothing.