The blog of the Urban Institute
February 4, 2020

How State Policies for Special Populations Can Support Access to Subsidized Child Care

Affording quality child care is a challenge for most families with parents who are working or in school.

In 2017, the average annual cost for full-time, center-based care (PDF) for a 4-year-old ranged from $4,670 in Mississippi to $18,657 in the District of Columbia. The average cost of full-time, center-based care for two children also significantly exceeded the average cost of other household expenses (PDF), such as transportation, food, health care, and even housing.

For some families, like families with a child with a disability or families experiencing homelessness, the challenges are even greater.

States can take those special circumstances into account when they set their policies under the Child Care and Development Fund (CCDF)—the main federal government program that funds child care subsidies. CCDF is a block grant program in which overall rules are set at the federal level, but states and territories set their specific policies within the federal guidelines.

For example, states determine which families get priority for subsidies when there isn’t enough funding available for all eligible families seeking assistance. States and territories also establish how much families have to pay out of pocket. In most states and territories, policies in both these areas take special needs into account.

What groups are given priority for CCDF subsidies?

Because CCDF is not a guaranteed benefit, there may be more eligible families applying for assistance than there is funding available. In 2016, of the 13.3 million children with income under the federal eligibility limits for subsidized child care, only 15 percent actually received subsidies (PDF).

When there is not enough funding to provide subsidies for all eligible applicants, states and territories can choose to establish waiting lists and prioritize vulnerable, at-risk, or underserved children and families to receive subsidies. States and territories can assign different levels of priority to these families.

They can guarantee that all families in a certain group—such as recipients of Temporary Assistance for Needy Families (TANF) benefits or with a child in foster care—receive subsidies. Or they can give priority to families in the group without guaranteeing subsidy receipt, meaning that when there is a waiting list for services but not enough funding, the families with priority will be given precedence when new subsidy applicants are accepted and approved, although they still won’t be guaranteed a subsidy.

Some states and territories also have policies that vary within a group of families, meaning that they might guarantee a subsidy for some, but not all, families in that group. For example, in Iowa in 2018, families with a child with special needs were given priority only if the family’s income was less than 200 percent of the Federal Poverty Guidelines and the parent or parents worked at least 28 hours per week. These three levels of priority are shown for selected subgroups in the figure below.

figure 1

As of October 1, 2018:

  • 34 states and territories gave priority to families with children with special needs,
  • 29 states and territories gave priority to families with very low income (according to their definition of very low income),
  • 41 states and territories gave priority to families receiving TANF,
  • 36 states and territories gave priority to families with children in child protective services (CPS),
  • 23 states and territories gave priority to families with children in foster care, and
  • 36 states and territories gave priority to families experiencing homelessness.

Other groups that may be given priority include families with teen parents or military families.

Which families are exempt from copayments?

In most states and territories, families who receive a subsidy are responsible for paying a copayment, or a portion of the cost of care. However, many states and territories exempt some families from paying anything out of pocket. Some states and territories categorically exempt all families in a group, while other states exempt families who meet certain additional criteria.

For example, in Arkansas in 2018, families with a teen parent were exempt from copayments only if the parent was attending high school full time, while all teen parents were exempt from copayments in the District of Columbia.

figure 2

As of October 1, 2018, families with open CPS cases were exempt from copayments in at least some instances in 36 states and territories. Thirty states and territories granted exemptions for families with a child in foster care in at least some cases. Thirteen states and territories did not require families with income under 100 percent of the Federal Poverty Guidelines to pay a copayment.

Teen parents were not required to pay a copayment in at least some cases in seven states, and families with children with special needs were exempt only in Missouri. Other families that may be granted exemptions from copayments include TANF or SNAP Employment and Training Program participants, or families receiving SSI.

The CCDF Policies Database

States and territories have significant flexibility in determining policy approaches to support vulnerable or underserved populations in accessing subsidized child care. In addition to establishing priority groups and offering copayment exemptions for special populations, states and territories may set differential reimbursement rates for families with children with a disability or allow housing search to be an approved activity for eligibility for families experiencing homelessness.

The policies shown in the graphics above represent a subset of the information collected on priority policies and copayment exemptions in the CCDF Policies Database. We track these varying policy choices—and a full range of CCDF policy choices—in the CCDF Policies Database.

This longitudinal database holds policies going back to 2009 for each of the 50 states, the District of Columbia, and five US territories and outlying areas, allowing users to conduct cross-state and over-time comparisons.

This information can support researchers and policymakers as they work to implement policies that promote access to care for children and families.

Illustration by A-Digit via Getty Images.

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