Child Care: State Programs Under the Child Care and Development Fund (CRS Report for Congress)
Premium Purchase PDF for $24.95 (54 pages)
add to cart or
subscribe for unlimited access
Pro Premium subscribers have free access to our full library of CRS reports.
Subscribe today, or
request a demo to learn more.
| Release Date |
Oct. 8, 2002 |
| Report Number |
RL31605 |
| Report Type |
Report |
| Authors |
Melinda Gish and Shannon Harper, Domestic Social Policy Division |
| Source Agency |
Congressional Research Service |
Summary:
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 ( P.L. 104-193 ,
PRWORA) restructured the major federal-state child care programs. It repealed three welfare-related
child care programs and initiated a new set of federal rules referred to as the Child Care and
Development Fund (CCDF). The CCDF combines funds provided under Section 418 of the Social
Security Act established by PRWORA with funds provided under the Child Care and Development
Block Grant (CCDBG). Both streams of funding are authorized through FY2002. Funds are
distributed as grants to states for their use in subsidizing child care services to low-income families
with children.
Federal law defines eligible children as those under age 13 residing with a family whose income
does not exceed 85% of the State Median Income (SMI), taking into account family size. The
federal eligibility rules are maximum income limits for states in designing their CCDF programs.
States may adopt income eligibility limits below that maximum, and currently, all but nine states
have indeed set a lower eligibility limit. Regardless of the established limits, because CCDF is not
an entitlement for individuals, states are not required to aid families even if their incomes fall below
state-determined eligibility thresholds.
Although states are not required to guarantee child care for welfare families, states may give
special treatment to families receiving assistance from the Temporary Assistance for Needy Families
(TANF) program, recognizing that under TANF, both states and individuals are now subject to work
requirements. Generally, TANF families continue to have some special status in states' CCDF
programs. In some states, TANF families are categorically eligible for services, although they may
not actually receive service because funding may not always be available. TANF families are not
responsible for a co-payment for child care services in 22 states.
Federal law requires states to assure that payment rates to child care providers ensure that
CCDF-eligible children receive equal access to care comparable to that available to children not
eligible for subsidies. States generally set payment rates based on prevailing market rates for child
care. The most recent state plans indicate that 45 states (or territories) based their current payment
rates on market rate surveys conducted in 2000 or 2001; and rates of the remaining seven states were
based on surveys conducted in or prior to 1999.
Federal law also requires that states use not less than 4% of federal child care funds made
available for each fiscal year to administer activities designed to improve the quality of child care.
Prior to 1996, the CCDBG Act included a list of activities for which the quality improvement funds
were to be spent; however, those categories are no longer itemized in law. Nevertheless, as part of
the CCDF plan, states indicate whether they will spend any of their child care quality funds on
activities that fall into those categories authorized under prior law (and any others).
