WASHINGTON, D.C. — The U.S. Department of Health and Human Services (HHS), through the Administration for Children and Families (ACF), recently announced a new rule that will decrease costs for families receiving child care subsidies and enhance their choices. The rule, which is a response to President Biden’s Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers, signed in April 2023, aims to reduce childcare costs and improve payment practices.
This rule introduces significant updates to the Child Care and Development Fund (CCDF), the country’s leading financial resource designed to help families afford child care and enhance quality in childcare settings.
The CCDF adjustments aim to alleviate some of the financial burdens faced by families across the United States. One key change caps the amount families pay for child care at just 7 percent of their household income. It also simplifies the process for states to eliminate co-payments for households below 150 percent of the poverty level, families with a child with a disability, and other vulnerable households.
Moreover, the rule seeks to expand choices for families, making it simpler for them to find childcare that suits their specific needs. This flexibility is crucial in a country as diverse as the United States, where family structures and needs vary widely.
Childcare providers also stand to benefit under the new rule. It mandates states to make timely payments to these providers, better covering the cost of providing care—a common business practice that will encourage more childcare providers to participate in CCDF and stabilize their operations.
The rule also takes steps to reduce bureaucratic hurdles. It streamlines processes, allowing families who have demonstrated eligibility for another benefit program to more easily apply for and receive childcare assistance. Online applications will become more accessible, and more families can start childcare assistance immediately, preventing disruption to parents’ employment, training, or education.
According to HHS estimations, this rule will lower childcare costs for approximately 100,000 children. Vice President Harris expressed her support for the rule, stating, “President Biden and I believe that every family in our nation should be able to access affordable child care. [We] are taking another important step forward by lowering the cost of child care for more than 100,000 working families that receive federal child care assistance.”
HHS Secretary Xavier Becerra echoed these sentiments: “Child care is a necessity for most working families across the country. Today we are taking an important step to reduce costs for families and give them more child care options. When families have access to affordable, quality child care, they can pursue job opportunities, cover other basic needs, and go to work knowing their children are safe.”
The importance of this rule extends beyond just the families it directly benefits. By improving the financial health of childcare providers, it supports the overall community. Ruth Friedman, Director of the Office of Child Care, said, “We have an opportunity to make improvements for child care providers, who do the critical work of caring for our youngest learners and supporting working families.”
In a country where childcare costs often exceed those of college tuition, this rule represents a significant step towards making affordable, quality childcare accessible to all families. It’s a move that promises not just financial relief for families but also a brighter future for the nation’s youngest citizens.
Additional information on this rule may be found here.
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