State Policy Documentation Project



Findings in Brief: Child Care Assistance

This section addresses a set of state child care policies implemented under the 1996 welfare law.  The 1996 law eliminated the federal entitlement to child care assistance for families receiving or leaving AFDC, combined the principal preexisting federal child care funding sources into a single Child Care and Development Fund (CCDF) block grant, and increased state discretion in designing and operating child care programs.

 TANF Families

Under AFDC, states were required to guarantee child care to cash assistance recipients who needed child care in order to work or participate in education or training.  Under the new law, states have no affirmative duty under federal law to provide needed subsidized child care assistance to families receiving TANF assistance.  States are free to maintain an affirmative duty under state law to provide assistance to meet, in whole or in part, the cost of child care, but they are not obligated to do so.  According to a 1998 Congressional Research Service review of state CCDF plans for 1997-1999, 35 states reported that they provided a child care guarantee for TANF families.[1]

 Under AFDC, states had the option of either paying for care provided to employed recipients, or disregarding all or a portion of the cost of child care paid by the recipient when determining the family=s eligibility and benefit level.  Under the new law, 30 states have opted to provide direct payments, 3 states provide a disregard, and 11 states provide a choice between a disregard or a direct payment.  In addition, 7 states reported some other policy, such as allowing a combination of payment and disregard (1 state) or allowing counties discretion in setting this policy (1 state).

 Under AFDC, states could not require recipients participating in activities other than employment to pay a fee or co-payment in connection with child care assistance.  TANF does not prohibit the requirement of a fee or co-payment.  Under the new law, 38 states do not to require a copayment for non-employed families and 13 do.  Among the 13 states, 6 sometimes charge more than $25 a month, 2 sometimes require between $10 and $25 a month, 4 always require less than $10 a month, and one state did not report fee information.

 Families Leaving TANF Cash Assistance

Under AFDC, qualifying families were entitled to child care assistance for 12 months after they became ineligible for cash assistance due to an increase in earnings.  Under TANF, there is no requirement that states provide child care assistance to families that become ineligible. 

 Twenty-seven states indicate that they have a transitional child care guarantee for certain families who become ineligible for cash assistance.  Of the 27 states, all extend the guarantee to families with increased earnings and 19 extend the guarantee to those who voluntarily close their case and need child care to retain employment.  Only 4 states indicate that the guarantee is extended to those who become ineligible for TANF due to a sanction.

 The 1996 law allows states broad discretion when structuring any transitional child care guarantee.  Seven states use a time limit to curtail the guarantee, 6 set limitations on the amount of income a family may earn, and 14 states use both time and income limitations, whichever comes first.  Two of the states indicating a priority for these families also allow counties discretion to set these policies.  States set time limits ranging from 2 months to 36 months, and limits on maximum monthly family income (for a family of three) ranging from $1533 to $3817. 

 Among the 24 states that do not have a specific transitional child care guarantee, 15 states indicated that they give priority to families transitioning from cash assistance over other low income working families, 8 indicated no priority status, and 1 did not provide any policy.  Note that in some cases, states that indicated prioritization for transitional families also provided specific policy statements that did not indicate a priority policy and it is unclear how prioritization is operationalized in those states.  In addition, a group of states are now seeking to provide assistance to all families that meet a set income guideline, however some of these states do and some do not indicate a priority policy exists for transitional families.

 Low Income Families Receiving Child Care Assistance Funded Under the CCDF

The CCDF is a block grant to states to provide subsidized child care programs for low-income families, including those who are not current or former cash assistance recipients.  Prior to 1996, no federal guarantee existed to guarantee child care to this population, and that continues to be true. Rhode Island is the only state that has a statutory guarantee that all working families under a certain income level will receive child care assistance. 

 Under CCDF law and regulation, states may decide whether to extend eligibility for child care assistance to families in education or training.  Thirty-six states provide assistance to families in education and training, often with a work requirement attached as well. 

 Under CCDF, the state may set eligibility for subsidy up to 85% of State Median Income (SMI), which varies among the states.  For ease of comparison, SPDP translated state eligibility levels to their Federal Poverty Level (FPL) equivalent for a family of three based on 1999 standards.  State initial eligibility levels for applicants vary from 125% of FPL (South Carolina) to 255% of FPL (Alaska).  In addition, 8 states allow families to remain in the subsidized child care program until their income rises to a higher income limit.  Of those states, Massachusetts has the highest exit limit at 278% of FPL.

 The TANF Child Care Protection

The TANF statute prohibits states from reducing or terminating assistance based on the refusal of an individual to work if the individual is a single custodial parent caring for a child under the age of six, and the individual proves that he or she has a demonstrated inability (as determined by the State) to obtain needed child care, for one or more of the following reasons: unavailability of appropriate child care within a reasonable distance from the individual's home or work site; unavailability or unsuitability of informal child care by a relative or under other arrangements; or unavailability of appropriate and affordable formal child care arrangements.

 Less than half of the states (20) have not extended the TANF child care protection to categories of children or families beyond the federal minimum requirement.  In the category of single custodial parents: 23 states implement the child care protection up to and including age 5, and 28 states extend the protection to families with children age 6 or older.  Among the 28 states, 24 cover single custodial parent families with children up to and including age 12. Three other states (Maryland, California, and Rhode Island) set the age limit for the protection at a different age (ages 6, 10 and 13, respectively).  One state (Texas) stated that policy did not specify an age limit.  Among those states that extended the TANF child care protection to other categories of families, 13 states extend to two-parent families and 9 states to non-parent caretaker families.  In addition, 14 states indicated that they extend the protection to families with children with special needs or a disability, and that children up to age 18 are included in this provision.  Note that SPDP did not systematically collect this information on children with special needs from all states, therefore where a state does not explicitly note such a protection extension it does not necessarily indicate that such an extension does not exist in state policy.

 CCDF regulations provide that CCDF lead agencies must inform parents about the TANF child care protection, including the procedures and criteria or definitions applied by the TANF agency to determine the whether the parent has a demonstrated inability to obtain needed child care, including: 1) "Appropriate child care"; 2) "Reasonable distance"; 3) "Unsuitability of informal child care"; 4) "Affordable child care arrangements"; and the fact that the federal time limit clock will continue to run during the period when needed child care is unavailable.  The regulation also provides that a state=s biennial CCDF plan must include the definitions or criteria used by the TANF agency to implement the child care protection.  The SPDP report provides definitions from 49 states.  However, it is difficult to compare state definitions because slight differences in wording may or may not indicate major policy differences. 

 The majority of states defined “appropriate child care” as that which is appropriately licensed or regulated by the state, or legally exempt from such oversight.  About a dozen states mentioned the importance of parental choice and/or the developmental needs of the child(ren) in defining appropriate care.  A handful of states also consider whether the child care provider will accommodate the parent’s work schedule.

 Most states defined “reasonable distance” according to a specific time limit regarding the parent’s commute, but vary in what part of a parent’s commute is considered.  Fifteen states place restrictions on how much time a parent may be expected to travel between home or work/activity site and the child care site (range of 30 minutes to 1 hour).  About a dozen states specify that travel time from the home to the child care site and to the parent’s work/activity site must be considered (range of 1 to 3 hours per day).  One state requires that the full round trip commute between home, child care and work/activity site be equal to no more than 25% of the participant’s work day.  Other states either specified a limit on the number of miles parents could be expected to travel to their child care site, or provided other considerations (e.g. geographical region, customary travel time) for caseworkers to use in determining reasonable distance.

 Over half of the states included some reference to meeting existing state law and regulation in order to be considered a “suitable” informal child care provider.  About a dozen consider child development in judging whether informal care arrangements are appropriate.  At least ten states say they consider the background of a potential informal care provider, such as a history of abuse or neglect.  One state indicated that if the only care available was an informal provider legally exempt from licensing or regulation, the parent would not be required to place their child(ren) in this care.  

 In defining “affordable child care arrangements”, most states make reference to the system of subsidized child care.  For example, 11 states consider care paid for by state subsidy to be “affordable”; 14 states define affordable care as that which costs no more than the state’s maximum reimbursement rate to child care providers in the subsidy system; 5 state define child care that costs no more than what is required under the state’s published sliding fee scale as affordable.  Other states set guidelines according to family income. Five states indicate that consideration of whether family income is sufficient to cover child care costs is necessary.  Six states set a maximum percentage of family income that may be applied to child care costs, ranging from 10 to 25%.  Two states indicate that affordable care for these TANF participants must be free.

[1] Evelyne Parizek, Gene Falk, and Karen Spar, Child Care: State Programs Under the Child Care Development Fund (CRS Report 98-875, October 1998). 

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This page last updated September 02, 2023

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