Stabilizing Child Care and COVID-19 FAQs

Lead agencies may reverse an application approval prior to the award of funds if something changes between the approval and award, including, but not limited to, a licensing violation or revocation, fraud, or permanent closure of a provider.  Lead agencies should notify a provider as soon as the decision to reverse the application is made and provide information on why it was reversed and an opportunity to appeal the decision.

OCC is not imposing a specific timeframe for when a temporarily closed provider due to COVID-19 at the time of application must reopen. Rather, lead agencies have the discretion of placing reasonable conditions or timelines with regard to reopening on child care providers who receive a subgrant. (See section 2202(d)(B)(i) and (ii) of the ARP Act .)

Yes, the ARP Act requires lead agencies to “make available on the lead agency’s website an application for qualified child care providers” (section 2202(d)(2)(D)(i) .; Lead agencies that choose to send applications directly to qualified providers or have providers access the applications through a private web portal still must post a copy of the application on their public website.  This could include posting a PDF copy or screenshots of the applications.  When posting information, OCC recommends including details on how interested child care providers can contact the lead agency for more information on accessing and submitting an application.

Yes, the ARP Act requires the lead agency to “make available on the lead agency’s website an application for qualified providers that includes certifications” the child provider, for the duration of the subgrant, will implement certain health and safety requirements and guidance, pay full compensation to staff, and, to the extent possible, provide relief from copayments and tuition for families in their care (section 2202(d)(2)(D)(i) ).  Therefore, the applications must include a way for child care providers to certify they will meet these requirements.  The subgrant applications may include check boxes for providers to select, and the lead agency may treat submission of the application as the certification.  Lead agencies do not have to require additional information at the time of the application as part of the certification process.

Qualified child care providers must certify that they will meet the three certifications for the duration of their ARP Act stabilization subgrant.

No, provided that child care providers are able to meet the certification by using funds from other sources, they are not required to use ARP Act stabilization subgrant funds for personnel costs, including staff wages and benefits.  Providers are allowed to use the subgrant funds to continue to pay full compensation and benefits in order to meet the certification requirements.  Lead agencies are strongly encouraged to make subgrants available to address personnel costs, but personnel costs are just one of the allowable uses of the subgrant funds, and, depending on the stabilization subgrant program in their state, territory, or tribe, child care providers have discretion in deciding how they use the funds.

As part of their ARP Act stabilization subgrant application, child care providers must certify they will pay at least the same amount in weekly wages and maintain the same benefits for each employee throughout the duration of the subgrant.  Child care providers also may not involuntarily furlough employees employed on the date of submission of the application.  The ARP Act does not address if a child care provider can terminate an employee for cause during this period.  Therefore, providers participating in their ARP Act stabilization subgrant programs may terminate an employee for cause during the subgrant period.

OCC encourages child care providers to provide relief from tuition and copayments, if financially possible, especially for low-income families.  However, child care providers are not required to provide relief from copayments and tuition for families in their care during the ARP Act stabilization subgrant period.  The ARP Act requires providers to certify that they “will provide relief from copayments and tuition payments for the families enrolled in the provider’s program, to the extent possible, and prioritize such relief for families struggling to make either type of payment” (emphasis added).  If a provider is in the financial position to provide relief from copayments and tuition for families, they should provide that relief and prioritize the relief for families with incomes below 85 percent of state median income.  Lead agencies are encouraged to use ARP Act supplemental funds, as well as CRRSA and CARES Act funds, to provide relief from copayments for CCDF-eligible families and cover the portion of the child care cost ordinarily covered by copays.  As a reminder, CRRSA Act funds may be used to waive copays for all eligible families without a CCDF waiver.  

No, child care providers cannot use ARP Act stabilization funds to cover family copayments or tuition.

The ARP Act stabilization funds are designed to support the child care market as a whole by covering business related expenses. The law specifies that child care providers may use their child care stabilization funds on the following allowable activities:

• Personnel costs
• Rent, utilities, facility maintenance or improvements, or insurance
• Personal protective equipment, cleaning and sanitization, or training and professional development related to health and safety
• Purchases of or updates to equipment or supplies to respond to the COVID-19 public health emergency
• Goods and services necessary to maintain or resume child care services
• Mental health support for children and employees

ARP Act stabilization funds cannot be used to cover family copayments or tuition. Therefore, the lead agency cannot require child care providers receiving stabilization funds to use the funds to cover the cost of reduced family payments. OCC encourages child care providers in the financial position to provide relief from copayments and tuition for families to use non-ARP Act stabilization funds to provide that relief and prioritize the relief for families with incomes below 85 percent of state median income. The lead agency may use the ARP Act supplemental CCDF Discretionary funds to reduce or waive copayments for a subpopulation of families eligible to receive CCDF. The lead agency may also choose to use funds provided by the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act to cover copayments for all eligible families. CCDF funds, including supplemental funds, cannot be used to cover tuition or copayments for families that are not eligible to receive CCDF child care subsidies.

No, lead agencies cannot use their ARP Act stabilization set-aside funds to cover family copayments or tuition. Set-aside funds can only be used for the following activities:

• Administering child care stabilization funds
• Carrying out activities to increase the supply of child care
• Providing technical assistance and support for stabilization applications
• Publicizing the availability of ARP Act stabilization funding
• Providing technical assistance to providers receiving ARP Act stabilization funds

Lead agencies may use the ARP Act supplemental CCDF Discretionary funds to reduce or waive copayments for a subpopulation of families eligible to receive CCDF. The lead agency may also choose to use funds provided by the CRRSA to cover copayments for all eligible families. CCDF funds, including supplemental funds, cannot be used to cover tuition or copayments for families that are not eligible to receive CCDF child care subsidies.

Lead agencies may determine how they monitor child care providers receiving ARP Act stabilization funds, including what types of documentation and reporting are required. Lead agencies should balance the need to collect information necessary to ensure funds are being spent correctly and not overly burdening providers.

Yes, lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified as defined in the Act .  Lead agencies are encouraged to include center-based and family child care programs, as well as programs that serve school-age children.

In order to be a qualified child care provider and eligible to receive a subgrant, a child care provider must either be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency at the time of application.  As this requirement applies to the date of application, a school-age program that is closed during the summer would be eligible for a subgrant if the program applied for the subgrant when it opened again to provide child care services, such as in the fall when school reopens.  If the program is closed due to schedule during the summer, it would not be eligible to apply for a subgrant during that time.

Depending on a lead agency’s licensing and health and safety rules, Head Start and Early Head Start programs may meet the criteria to be considered eligible for ARP Act stabilization subgrants.  For example, a Head Start program licensed by the state as of March 11, 2021, would meet the definition of eligible provider at section 2202(a)(2)(B) .  However, because other ARP funding explicitly for Head Start programs is available and Head Start programs have continued to receive federal grants during the pandemic, lead agencies should only include Head Start and Early Head Start programs in the stabilization subgrants under limited circumstances.  This may include programs that braid or layer CCDF and other child care funds with Head Start or the Head Start program is the only available early care and education program in a community.  In cases where a lead agency includes Head Start programs in their ARP Act stabilization subgrants, lead agencies should ensure that CCDF funds do not duplicate Head Start funds and prioritize child care programs that are in need of financial relief and have received comparatively fewer resources during the COVID-19 public health emergency.

In order to be a qualified child care provider and eligible to receive a subgrant, a child care provider must either be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency at the time of application.  The terms included in the Act are broad, and lead agencies have the flexibility to define them.  Therefore, a lead agency could define a lack of qualified staff or demand as an accepted reason related to the COVID-19 public health emergency for why a child care provider may be temporarily closed.

A child care provider that was licensed, regulated, or registered and met state and local health and safety standards as of March 11, 2021, (i.e., ARP Act date of enactment) but does not meet CCDF requirements may be considered eligible for an ARP Act stabilization subgrant.  CCDF requirements include completion of CCDF health and safety training requirements, completion of comprehensive background checks, and other lead agency-specific requirements, such as participating in a quality rating and improvement system.  A provider does not have to be serving a child eligible for CCDF in order to be considered as meeting CCDF requirements.  However, a child care provider that was not licensed, regulated, or registered and met state and local health and safety standards as of March 11, 2021, must meet CCDF requirements at the time of application in order to be eligible for a child care stabilization subgrant.  Lead agencies may define what it means to be regulated or registered in the state, territory, or tribe.

Lead agencies should not provide subgrants to providers with a history of fraud or misappropriation.  Lead agencies have the discretion to decide which child care providers are included in their ARP Act stabilization subgrant programs.  Therefore, lead agencies are strongly encouraged to use that discretion to disqualify child care providers who have had their license or ability to participate in the subsidy program revoked or who are under investigation.  

No, a program that permanently closed after 3/11/2021, is not eligible to receive an ARP Act stabilization subgrant.  In order to be eligible for an ARP Act stabilization subgrant, a child care provider must be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency on the date of application.

If the lead agency does not require school-age child care providers to complete safe sleep practices training to be eligible to serve children receiving CCDF subsidies, then school-age providers are not required to complete a safe sleep practices training in order to be eligible for ARP Act stabilization assistance.

No.  Lead agencies may determine the process they use to award the subgrants and are not required to use their agencies’ official subgrant process.

No, child care providers receiving subgrants are not required to have or provide a DUNS number or UEI.
The Office of Child Care (OCC) notes that in cases where the stabilization subgrants are being awarded to qualified child care providers through intermediaries, those intermediaries are sub-recipients administering a subaward, and, as such, would be subject to rules that apply to sub-recipients, including those related to obtainind a DUNS number or UEI.  (45 CFR 75.2 )

Child care stabilization subgrants included in the ARP Act are benefits to a child care provider and are considered payments made to beneficiaries of a federal program, which is the same as with child care subsidies paid under the voucher program.  Providers receiving stabilization subgrants are not categorized as “sub-recipients” as defined at 45 CFR 75.2.
The Office of Child Care (OCC) notes that in cases where the stabilization subgrants are being awarded to qualified child care providers through intermediaries, those intermediaries are sub-recipients administering a subaward, and, as such, would be subject to rules that apply to sub-recipients, including those related to obtainind a DUNS number or UEI.  (45 CFR 75.2 ) 

Lead agencies should use the definition they use for “obligations” for regular CCDF funds when determining whether ARP Act stabilization funds are obligated.  As required at 45 CFR § 98.60(d)(4)(ii), if the lead agency does not have an applicable requirement, the regulation at 45 CFR § 75.2 , Expenditures and Obligations, applies.

Intermediaries are subject to the same obligation and liquidation period for ARP Act stabilization funds regardless of whether those funds are for administering the subgrants or one of the administrative, supply building, or technical assistance activities.  Lead agency agreements with intermediaries must meet CCDF requirements at 45 CFR 98.11 and are subject to the same obligation and liquidation periods for the stabilization funds.  Any expenses incurred by the intermediaries that are not part of the subgrants will count against the administrative set-aside of either 10 percent for states and territories, or 20 percent for tribal lead agencies, and are subject to the same obligation and liquidation deadlines.  Agreements with intermediaries should include a requirement for intermediaries to collect and report data to lead agencies on a regular basis, as lead agencies will be expected to report on this information.

Lead agencies may choose to contract with intermediaries, such as counties, child care resource and referral agencies, and staffed family child care networks, to manage the administration of the ARP Act stabilization subgrants.  This work may include, but is not limited to, designing and reviewing subgrant applications, providing support in estimating current operating expenses, distributing subgrant funds, and monitoring the use of subgrant funds.  Agreements with intermediaries to administer the subgrants must meet CCDF requirements at 45 CFR 98.11  (PDF), including that lead agencies retain overall responsibility for the administration of the program and administrative and implementation responsibilities undertaken by the intermediary must be governed by written agreements.  Further, expenses incurred by the intermediaries that are not part of the subgrant (i.e., passed through to an eligible child care provider) will count against the set-aside of either up to 10 percent for states and territories or up to 20 percent for tribal lead agencies.  Agreements with intermediaries should include requirements for intermediaries to collect and report data to lead agencies on a regular basis, as lead agencies will be expected to report on this information to OCC.

Yes, lead agencies can use funding from the administrative, supply-building, and technical assistance set-aside of up to 10 percent for states and territories and 20 percent for tribes to cover personnel costs associated with administering the stabilization funds, including term-limited staff.  OCC strongly encourages lead agencies to use a portion of their set-aside to cover the cost of staffing necessary to administer and process the subgrants in a timely, transparent, and effective manner.  These funds represent an unprecedented opportunity that will be difficult to realize without adequate staffing.

Lead agencies are not required to submit a new separate report to OCC that details how they plan to spend their ARP Act stabilization funds.  OCC will collect information about use of stabilization funds through the CCDF Plans.
State and territory lead agencies provided information on their implementation of stabilization grant funding plans in their FY 2022-2024 Child Care and Development Fund (CCDF) Plan, Q 4.1.8e due July 1, 2021.  Lead agencies were instructed to include a description of their stabilization grant implementation, including the link to the subgrant application on their website, how grants are awarded, any strategies used to target providers in low-income communities, how funds have been used by providers, and any impacts or results on providers (e.g., increased number of licensed child care programs open in underserved area) or child care staff (e.g., increased number of staff receiving higher wages) as a result of the stabilization grants.  Tribes will submit Plan amendments to describe their child care stabilization grant activities in 3.1.2j(3) Other Quality Activities of their FY 2020-2022 CCDF Plan.  This only applies to Tribal CCDF Plans and not to tribes with approved Public Law 102-477 Plans. 
Because the ARP Act Supplemental CCDF Discretionary funds allocated at section 2201 can be used for the same purposes as regular CCDF funds, states and territories making major policy or programmatic changes effective before October 1, 2021, were instructed to submit amendments to their current FY 2019-2021 CCDF Plans.  States and territories were instructed to include these policies in the FY 2022-2024 CCDF Plans due on July 1, 2021.  Tribal lead agencies must submit amendments to their current FY 2020-2022 CCDF Plan within 60 days of the effective date of implementation.  This only applies to Tribal CCDF Plans and not to tribes with approved Public Law 102-477 Plans. 

No, lead agencies are not required to spend down previous supplemental relief funding before spending the ARP Act stabilization funds.  While lead agencies should be aware of obligation and liquidation requirements for the other COVID-19 related funding (i.e., under the CARES Act and CRRSA Act), lead agencies are strongly encouraged to obligate their ARP Act stabilization grant funds quickly to ensure they reach providers in need and protect the existing child care market.  OCC also recommends that lead agencies be aware of allowable uses of funds and funding requirements with the multiple COVID-19 supplemental funds.  Lead agencies may also consider how they can pair more flexible funding provided by the CARES Act and CRRSA Act with the more prescriptive ARP Act stabilization funds.  Lead agencies should contact their OCC Regional Offices for support and technical assistance related to spending the various funding streams so they can reach child care providers and families quickly.

Stabilization subgrant funds cannot be used to incentivize license-exempt, non-CCDF-eligible providers to become CCDF-eligible and therefore eligible to receive a subgrant.  However, lead agencies may use part of their set-aside for administration, supply building, and technical assistance to help license-exempt, non-CCDF-eligible providers become CCDF-eligible so they can be eligible to apply for ARP Act stabilization subgrants.  Lead agencies may also use other COVID relief funds (CARES Act, CRRSA Act , and ARP Act supplemental) and regular CCDF funds to also help providers become CCDF-eligible.

Yes, CCDF lead agencies may reprogram regular CCDF, CARES, or CRRSA funds until the obligation deadlines, which is September 30, 2022, for CARES and CRRSA.  Obligation and liquidation information for regular CCDF funds is described in the instructions to the ACF-696 and ACF-696T CCDF expenditure reports.  Reprograming funds for other allowable activities does not constitute a cut in funding for child care for eligible individuals and is not considered supplantation.

No, lead agencies cannot use ARP Act stabilization funds for direct child care services.  This prohibition applies to both the set-aside and the subgrant funds.  These funds are designed to support the child care market as a whole by covering business related expenses.  Lead agencies may use their stabilization fund set-asides to carry out activities to increase the supply of child care, especially for historically underserved populations.  While these funds may not be used for direct services, they can be used to cover some of the costs associated with providing and expanding direct services, such as start-up grants and administrative costs associated with using grants or contracts for direct services.  Lead agencies may use regular CCDF, CARES, CRRSA (PDF), and ARP Act Supplemental CCDF Discretionary funds for direct child care services.

With limited exceptions, the funding of home visiting programs is not an allowable use of the ARP Child Care Stabilization Funds.  The ARP Act child care stabilization funds are specifically designed to promote the stability of the child care sector.  Home visiting programs typically provide services to parents and families to ensure that they have the necessary resources and skills to raise and care for their own children.  In contrast, the child care sector provides non-parental care and early education for children.  States and territories must use at least 90 percent of their ARP Act stabilization allocations for subgrants to qualified child care providers, and tribes must use at least 80 percent of their allocations for subgrants.  The remaining funds may be used for administering the subgrants, providing technical assistance and support for applying for and accessing these subgrants, publicizing the availability of these subgrants, carrying out activities to increase the supply of child care, and providing technical assistance to help child care providers meet certain policies.  With limited exceptions, home visiting does not fall within any of these allowable uses.   The limited exceptions where it might be appropriate to use ARP Act stabilization funds for home visiting include instances where there is a direct connection to non-parental child care—for example, providing stabilization grants to child care providers who deliver home visiting as an integral component of their child care program for children enrolled in the child care program, or using the set-aside to support home visiting services that provide resources and support specifically for family child care providers, or if the purpose of the home visiting is to provide mental health services for children in child care.  The use of home visiting services to refer/connect children to early care and education services is not by itself a sufficient connection to non-parental child care services to justify the use of ARP Act stabilization funds (or other CCDF funds) for home visiting services.

Lead agencies have the flexibility to determine the documentation a child care provider must submit to confirm their current operating expenses and are encouraged to accept a variety of types of documentation and limit burden on applicants.  
If a lead agency chooses to provide stabilization subgrants to child care providers that are not licensed, regulated, or registered and have not previously received child care subsidies but are otherwise eligible to receive CCDF, for example relative providers, lead agencies are encouraged to collect additional details and documentation of operating expenses.

Yes.  Lead agencies have wide discretion in how subgrant amounts are formulated, including how current operating expenses are calculated.  Therefore, the lead agency may use the size of the child care program as part of their formula for estimating current operating expenses.  When considering the size of a child care program, lead agencies should use enrollment and/or licensed capacity rather than attendance.  As a reminder, child care providers must confirm the data used and the estimated current operating costs as part of their applications.

No, lead agencies should not calculate current operating expenses after deducting income, including child care subsidy payments.  Even before the public health emergency, child care provider income was unstable and insufficient to cover the costs of providing high-quality care, and the COVID-19 public health emergency has exacerbated this instability.  Deducting income before calculating a provider’s current operating expense as part of determining a subgrant award amount undermines the purpose of the ARP Act stabilization subgrants.

No, there is not a federal limit on the dollar amount of an ARP Act stabilization subgrant.  There is also not a federal limit on the total dollar amount of stabilization subgrants that a qualified provider can receive.  Subgrant amounts must be based on a child care provider’s stated current operating expenses, including costs associated with providing or preparing to provide child care services during the pandemic, and, to the extent practicable, cover sufficient expenses to ensure continuous operations for the intended period of the subgrant.  Subgrant amounts should reflect the significant resources included in the ARP Act and be substantial enough to stabilize struggling child care providers.

Yes, lead agencies may incentivize subgrant recipients to implement certain policies, such as higher pay for staff.  As a reminder, child care providers must certify that they will pay at least the same wages and benefits to staff for the duration of the subgrant.  Therefore, while providers may choose to increase pay or offer bonuses for their staff in order to take advantage of these incentives, the provider may not opt-out of continuing to pay their staff at least the same wages.

The ARP Act does not exempt the ARP child care stabilization subgrant funding from taxation.  Therefore, this funding is subject to the same tax rules as regular CCDF funding.  State tax rules apply.  Regarding federal tax rules, please contact the Internal Revenue Service for guidance.  In some cases, funds used to cover operating expenses may be exempt from taxation.

No, ARP Act stabilization subgrants cannot be used to assist in the purchase of a child care program.  The ARP Act at section 2202(e)(1) specifies that subgrant funds can only be used for the following operating expenses:

• Personnel costs, including payroll and salaries or similar compensation for an employee (including any sole proprietor or independent contractor), employee benefits, premium pay, or costs for employee recruitment and retention.
• Rent (including rent under a lease agreement) or payment on any mortgage obligation, utilities, facility maintenance or improvements, or insurance.
• Personal protective equipment, cleaning and sanitization supplies and services, or training and professional development related to health and safety practices.
• Purchases of or updates to equipment and supplies to respond to the COVID-19 public health emergency.
• Goods and services necessary to maintain or resume child care services.
• Mental health supports for children and employees.

No, ARP Act stabilization subgrants cannot be used to help a new child care provider open or a permanently closed child care provider reopen.  These subgrants are designed to stabilize existing child care businesses, not fund the start-up or reopening of a provider not open for business.  In order to qualify for a child care stabilization subgrant, a child care provider must be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency.  Lead agencies may use part of their set-aside and other COVID-19 funds (i.e., CARES, CRRSA , and ARP Act supplemental funds) to help providers open or reopen.  (See section 2202(d)(B)(i) and (ii) of the ARP Act .)

Paying a share of the ARP Act stabilization funds to another entity, including a bookkeeping firm, to apply for stabilization funding and assist with documentation as part of the grant management, is not an allowable use of the ARP Act stabilization funds. Stabilization funds can only be used for services “necessary to maintain or resume child care services.” Paying another entity to handle the applications for stabilization funding does not fall into this category. In addition, lead agencies can and are expected to use some of their ARP Act stabilization set-aside to help child care providers access and apply for assistance, free of charge to the provider.

While the guidance in this response focuses on how ARP stabilization funds impact the eligibility of child care workers for federal benefit programs, the same guidance would apply to funding from regular CCDF funds and supplemental funds provided under the CARES Act, CRRSA Act, and ARP Act, when the funds are used as stabilization grants or similar provider grants/stipends.  However, this guidance may not apply to other allowable uses of these funds, such as increasing provider payments, improving payment policies, increasing wages for providers, waiving or reducing parent copayments rates, increasing income eligibility for direct services, or other allowable uses.

Temporary Assistance for Needy Families (TANF)

States determine which sources to count as income, unless a statute authorizing funding specifically imposes a requirement to include or exclude funds.  The ARP Act does not impose requirements on whether to include or exclude ARP Act child care stabilization funds.  ACF strongly recommends that CCDF lead agencies coordinate with the state agency that administers TANF to ensure that child care workers do not lose or experience reductions in their TANF benefits when receiving assistance from the ARP Act child care stabilization funds.  States have flexibility to exclude ARP Act child care stabilization funding when determining eligibility for TANF, and ACF encourages states to use this flexibility.  These stabilization funds are time-limited resources that are intended to stabilize the child care sector and workforce.  If child care workers were to lose access to TANF as a result of the stabilization funding, this would be counter to the goals of that funding.

Furthermore, in many states, participation in TANF also makes families automatically eligible for SNAP and/or WIC.  As such, the loss of TANF could trigger an automatic loss of SNAP and/or WIC for child care workers.

Supplemental Nutrition Assistance Program (SNAP)

Federal law defines income for SNAP.  The ARP child care stabilization funds would be considered self-employment income for the child care providers since they are not universally exempted from SNAP eligibility determinations by law.

Additionally, the ARP Act gave states significant discretion in determining how the child care stabilization grants would be apportioned to child care providers, and self-employment income and exclusion determinations may vary by options selected by the state.  Therefore, the grants could be excluded for SNAP purposes because they may end up being excluded from income as a reimbursement , non-recurring lump sum payment , or cost of producing self-employment income (once spent ).  State SNAP agencies will have to determine on a case-by-case basis what portion, if any, is excludable based on how the providers received the funds and how they are spent.

However, families who receive TANF cash assistance may be categorically eligible for SNAP.  To the extent that child care workers continue to participate in TANF, child care workers would not lose SNAP eligibility as a result of receiving child care stabilization funding.

We encourage family child care providers to contact their local SNAP office for more information.

Special Supplemental Assistance Program for Women, Infants, and Children (WIC)

The definition of what counts as income for WIC is determined at the federal level, and payments from child care stabilization funding would generally count as income.  However, families who participate in TANF, SNAP, or Medicaid and additionally have either expecting mothers or children under the age of 5 are automatically eligible for WIC.  To the extent that child care workers continue to participate in TANF, SNAP, or Medicaid, child care workers would not lose WIC as a result of receiving child care stabilization funding.

Furthermore, for family child care providers, whether the child care stabilization funding counts as income also depends on whether it is used as income by the family child care provider who receives it.  For example, if the funding were used to cover rent, and if that did not affect a recipient’s net income, then the funding would not affect WIC eligibility.  We encourage family child care providers to contact their local WIC office  for more information.

Federal housing assistance (including public housing and voucher programs)

The definition of what counts as income for federal housing assistance is defined by section 3 of the U.S. Housing Act of 1937 and HUD’s implementing regulation at 24 CFR 5.609.  Generally, “annual income” means all amounts, monetary or not, which go to, or on behalf of the assisted family that are not specifically excluded by HUD regulations (24 CFR 5.609(a)).  HUD regulations specifically exclude temporary, nonrecurring, or sporadic income from the definition of “annual income” (24 CFR 5.609(c)(9)).  Sometimes ARP Act child care stabilization funds are received by child care workers receiving federal housing assistance in such a way that they may be regarded as temporary, nonrecurring, or sporadic payments.  In those circumstances, the ARP funds would not affect an individual’s “annual income” used to calculate the individual’s portion of rent.  However, because this analysis depends heavily on the individual’s particular circumstances, we encourage child care workers receiving federal housing assistance to contact their Public Housing Agency (PHA) or Owner for more information.

Medicaid

For most Medicaid beneficiaries, the definition of what counts as income for Medicaid is determined at the federal level and includes all income reported to the IRS as part of a tax filer’s Adjusted Gross Income (AGI), plus some non-taxable income sources.  Payments from child care stabilization funding should generally be reported as income.  However, there may be some situations where child care stabilization funding should not be reported as income by a family child care provider (e.g., if the funding were used to cover rent, and if that did not affect a recipient’s net income).  We encourage family child care providers to contact a tax advisor about what should and should not be reported as part of one’s AGI.

Earned Income Tax Credit (EITC)

The definition of what counts as income for the EITC is determined at the federal level and includes all income reported to the IRS as part of a tax filer’s Adjusted Gross Income (AGI).  The EITC phases in with earnings and phases out with the greater of earnings or AGI.  To qualify for the EITC , filing units must not exceed the income/earnings eligibility threshold specific to the filing unit’s filing status (married vs. single/head of household) and number of children (zero, one, two, or three or more).  Payments from child care stabilization funding should generally be reported as income.  However, there may be some situations where child care stabilization funding should not be reported as income by a family child care provider (e.g., if the funding were used to cover rent, and if that did not affect a recipient’s net income).  We encourage family child care providers to contact a tax advisor about what should and should not be reported as part of one’s AGI.

CCDF Lead Agencies have the flexibility to decide whether to disregard Unemployment Compensation (UC) benefits under the CARES Act or the CRRSA Act as income or resources when determining CCDF eligibility and family co-payment amounts.  The CARES Act created three new temporary federally funded unemployment compensation programs to respond to the economic effects of the Coronavirus Disease 2019 (COVID-19). These programs were extended in the CRRSA Act. They are:

1. Pandemic Unemployment Assistance, which provides benefits for up to 50 weeks to individuals who are not eligible for regular UC or extended benefits and who have been COVID-impacted with regard to their unemployment (minus any weeks of regular UC and Extended Benefits (EB) the individual received);
2. Pandemic Emergency Unemployment Compensation, which provides an additional 11 weeks of benefits, through March 14, 2021, to individuals who have exhausted their rights to regular state or Federal UC benefits; and
3. Federal Pandemic Unemployment Compensation, which provides an additional $300 per week to individuals who are collecting regular state or Federal UC, through weeks of unemployment ending on or before March 14, 2021.

For the purposes of determining CCDF eligibility and co-payment amounts, a Lead Agency may treat the UC benefits from the CARES Act or the CRRSA Act differently from the way it treats regular UC benefits. Lead Agencies also have flexibility in treatment of regular UC benefits. Lead Agencies should amend their CCDF Plan with respect to such changes.

Here is a link to the US Department of Labor’s webpage on UC benefits related to the COVID-19 outbreak . 

The CARES Act and the CRRSA Act do not address the minimum 12-month eligibility period for essential workers; accordingly, regular CCDF/CCDBG rules apply. Lead Agencies may submit a waiver to ACF to reduce the eligibility period for essential workers. Alternatively, states could provide quality grants to child care providers for supply retention and/or quality improvement activities to benefit the full range of families, which would make the eligibility determination process for individual families immaterial. Care provided in emergency situations should be of the highest quality that is reasonably practicable given the particular circumstances.

In cases where the income of families of essential workers exceeds the federal income eligibility limit of 85% of state median income (SMI), Lead Agencies may terminate CCDF subsidies funded by the CARES Act within the eligibility period without a waiver from ACF—for example, if the Lead Agency reverses their policy to disregard the income for essential workers or when CARES Act funds are depleted.  Lead Agencies may serve families for a longer period with CARES Act funds.  We do note that families of essential workers would continue to be eligible for the full minimum 12-month eligibility period if the household’s income fell below 85 percent of SMI.  Thus, we suggest that, if any Lead Agency adopts this interpretation, the agency should check eligibility at the time of termination of benefits to determine whether the minimum 12-month eligibility requirement applies or not.

If the family is still eligible at redetermination, they should receive another minimum 12-month eligibility period and should not be placed on a waitlist.  ACF has prioritized continuity of care, as demonstrated by the graduated phase-out policy.  The Child Care and Development Block Grant (CCDBG) Act requires lead agencies “to allow for provision of continued assistance” for families whose income exceeds the initial eligibility threshold but is below the second tier.  (42 USC 9858c(c)(2)(N)(iv); see also 45 CFR 98.21(b)) This safeguards children’s continuity of care as parents move towards economic self-sufficiency.  A policy that moves families currently receiving subsidies to a waitlist is in direct opposition to the graduated phase-out policy.  Thus, a policy that terminates the receipt of the subsidy at redetermination for a child who is otherwise eligible is inconsistent with the law and the rule.  Once a family begins receiving CCDF, their subsidy can only be terminated at redetermination through the graduated phase-out policy, if the reason for termination is income eligibility.  However, if the family is no longer eligible due to other eligibility requirements (e.g., age of child, working, or attending training/education) at redetermination, their subsidy may be terminated.

Lead agencies have flexibility in determining how to best meet the goal of prioritizing certain children while complying with the eligibility requirements. This may include additional eligibility criteria (that apply only at redetermination) or adjusting the graduated phase-out levels to help the lead agency manage the population served and ensure that those most in need are receiving services.

CCDF lead agencies have the flexibility to decide whether to disregard many of the COVID-19 supplemental payments to individuals as income when determining eligibility for CCDF subsidies, unless treatment of those payments as income or not is specified in law.  As noted in a prior FAQ, lead agencies have the flexibility to disregard Unemployment Compensation (UC) benefits or Economic Impact Payments (also called stimulus payments) under the CARES , CRRSA , or ARP Acts as income.  Likewise, lead agencies have the flexibility to disregard payments made to youth in, or formerly in, foster care through the Chafee Program for Successful Transition to Adulthood as income.

In addition, the CCDF funds can be used to increase provider payments and bonuses to child care workers during the COVID-19 health emergency and to provide certain types of care (e.g., infant and toddler care or non-traditional hours).  Lead agencies have the flexibility to disregard bonuses and increases in pay to child care workers as income when determining a child care worker’s eligibility for CCDF.  Payments to child care workers that are sourced from ARP Act stabilization funding are other types of income that can also be excluded from the eligibility calculation.  ACF strongly encourages that lead agencies disregard this funding when determining eligibility for CCDF.  Please note that any changes to a state’s definition of income to take advantage of this flexibility must be reflected in a CCDF plan amendment.

The CARES Act and the CRRSA Act do not restrict child care providers from simultaneously receiving funding from the CCDF Discretionary funds and from other federal or state programs, such as the small business loan funds offered through the CARES Act and the CRRSA Act. However, child care providers who receive ACF grants may not use grant funds for costs that are reimbursed or compensated by other federal or state programs, including the Small Business Administration’s Paycheck Protection Program (PPP), the Public Health and Social Services Emergency fund, or unemployment compensation. OCC notes that the availability of some program funds, such as PPP, have been inconsistent and the extent to which child care providers can access them may be limited. Lead Agencies have the flexibility to consider whether a provider has received funds from other federal or state programs in deciding how best to direct CARES Act and the CRRSA Act resources, but are encouraged to support providers through this child care crisis.

Here is a link to the U.S. Small Business Administration’s webpage on the Paycheck Protection Program (PPP).

Yes, essential workers are subject to the eligibility requirement that family assets do not exceed $1 million.  The eligibility requirements defined at section 98.20(a) of the CCDF regulations have separate financial eligibility requirements — one for income and one for assets.  Income is a wholly different financial test from the assets test — one could have very little income, but significant assets, and vice versa.  The CARES Act, the CRRSA Act, and section 2201 of the ARP Act allowed the supplemental funds to provide child care assistance to families of essential workers “without regard to the income eligibility requirements,” but made no mention of the asset test.  Lead agencies that want to exempt essential workers from the family asset test must request and have an approved waiver from ACF.  Per CCDF regulations, assets can be self-certified by a member of the household.  

Yes. Lead Agencies are permitted to use funds for the establishment and maintenance of computerized child care information systems, including data systems. In addition, expenses for this purpose are reported on the ACF-696 of ACF-696T CCDF Financial Reports under the non-direct services for systems expenditures, which are not subject to the five percent cap on administrative expenditures (45 CFR 98.54(b)(1)). Lead Agencies who receive ACF grants may not use grant funds for costs that are reimbursed or compensated by other federal programs.

Yes, the CCDF, CARES Act, and CRRSA Act program funds may be spent on COVID-19 testing kits. However, ACF strongly recommends that Lead Agencies first consult with their jurisdiction’s public health agency, seek advice on how best to proceed, and coordinate any actions. Broader considerations could include asking:

• Are there other local resources or options for testing?
• Are available COVID-19 testing capacities meeting the needs of the community or would increasing testing in child care draw limited testing capacity away from populations with greater risk and exposure (e.g., health care workers and nursing home residents and workers)?
• Does the plan for COVID-19 testing at child care facilities adhere to FDA recommendations (i.e., FDA-authorized equipment or certified operators administering and interpreting the tests)?

Testing capabilities vary among communities and may be changing often. ACF additionally recommends seeking funding outside of CCDF to increase testing capabilities for the broader community. One example is the Rural Tribal COVID-19 Response (RTCR) program established by the Health Resources and Services Administration (HRSA) with CARES Act funds which allows rural tribes to increase their capacity to test suspected COVID-19 patients within their communities.

Yes, CCDF funds can be used to provide some sanitation supplies to families, provided that the supplies relate to the provision of child care.  For example, CCDF funds could be used to give packages of gloves and masks to families with the understanding that these materials will be used when parents drop off and pick up children from child care.  However, equipment, materials, and supplies that are not directly related to child care may be an unallowable use of CCDF funds.  For example, providing families with sanitation and cleaning supplies to use at home would have little to do with the provision of child care—and, therefore, would be an unallowable CCDF expenditure.

Yes, additional child care staff or staff time to assist with cleaning and health screening is an allowable use under CCDBG as an activity to improve the quality of child care services and child safety (45 CFR 95.53(a)(10)).

Incentives for providers may be considered an allowable expenditure in the CCDF program if the incentives are used as part of quality improvement or other activity that meets the purposes and goals of CCDF.  For example, providing gift cards to child care providers may be allowable if the cards relate to an integral part of the child care program.  As the incentives in question would be to promote vaccination among child care providers and support health and safety in child care programs, this would be an allowable use of CCDF quality funds.  This applies to regular CCDF, CARES, CRRSA, and the ARP Act supplemental discretionary funds.  OCC notes that incentives that are not connected to child care program’s activities are not an allowable CCDF expenditure.  
In addition, CCDF regulations provide that “Lead Agencies shall expend and account for CCDF funds in accordance with their own laws and procedures for expending and accounting for their own funds” [45 CFR § 98.67(a)] .  Thus, lead agencies should check their own laws and procedures to ensure that using funds for incentives is acceptable practice.  OCC suggests the lead agency document the use of funds, including a written demonstration that the use of funds for incentives is directly connected to a CCDF authorized activity, and that the costs are reasonable and "ordinary and necessary" to accomplish CCDF objectives.

Parents may need additional hours of child care during the time they are receiving or recovering from a COVID-19 vaccine.  State, territory, and tribal lead agencies may use the supplemental funds to provide bonuses or other financial incentives to child care providers who choose to stay open extra hours or provide care on the weekends so parents can be vaccinated. These incentives are considered quality expenditures.

The ARP Act supplemental funds may also be used to support child care providers in accessing COVID-19 vaccines.  For example, lead agencies may provide stipends to child care providers to cover the cost of transportation to vaccine sites and paid time off to receive the vaccine and recover from any side effects.

Some child care businesses may qualify for tax credits to support paid sick leave while they receive a vaccine and recovery from any side effects.  Additional information is available at: https://www.irs.gov/coronavirus/employer-tax-credits.

Note: the Office of Child Care is issuing this FAQ to lead agencies due to the time sensitive nature and urgency with ensuring that Americans can access the COVID-19 vaccine. Forthcoming guidance will comprehensively address use of the CCDBG Supplemental funds in the American Rescue Plan Act.

The CARES Act and the CRRSA Act do not address use of funds for construction or renovation; accordingly, regular CCDF/CCDBG rules apply. All Lead Agencies may use CARES Act or CRRSA Act funds for minor renovations, as described in 45 CFR 98.56(b), but only Tribal Lead Agencies may use the CARES Act and CRRSA Act funds for construction or major renovations. As such, states and territories cannot use CARES Act or CRRSA Act funds for construction or major renovation. Tribal Lead Agencies must complete the full construction/major renovation application process and receive ACF approval (45 CFR 98.84). The application must justify that the construction/major renovation activity is for the purpose of preventing, preparing for, and responding to, COVID 19. Pursuant to the CARES Act language, CARES Act funds can be obligated in fiscal year 2020 or the succeeding two fiscal years (by September 30, 2022). CARES Act funds (including those used for construction and major renovation) must be liquidated by September 30, 2023. The CRRSA Act funds are silent to the obligation and liquidation periods. CRRSA funds (including those used for construction and major renovation) follow CCDF Discretionary funding requirements and must be obligated by September 30, 2022 and liquidated by September 30, 2023.

Tribes are limited to serving CCDF children within their service area. In order to serve children outside of the service area established by the child count and the CCDF Plan, a Tribe would need to submit a CCDF Plan amendment to change its service area, and the new service area would have to be on or near the reservation. In addition, Tribes would have to consult with nearby Tribes (if applicable) to ensure children in the adjoining areas are not being served by other Tribes.

No, tribal COVID-19 CCDF supplemental funds, like regular CCDF program funds, cannot be used to provide direct services for families who do not meet the tribe’s definition of “Indian child” or do not live within the tribe’s service area. Though essential workers are not subject to the income eligibility requirement to receive child care services funded by the COVID-19 supplemental funds, they are subject to the other CCDF program eligibility requirements. While tribes have some flexibility in defining "Indian child," the definition must be limited to children from federally recognized Indian tribes, consistent with the CCDBG Act's definition of Indian tribe (45 CFR § 98.2 ). Allowable changes to the tribe’s definition could include children who are tribal members, whose membership is pending, who are eligible for membership, and/or are children/descendants of members.  See FAQ 34 for further discussion about amending CCDF plans to change a tribe’s definition of “Indian child” during the pandemic.

Yes, tribal lead agencies may use the entirety of their ARP Act stabilization funds on construction and major renovation. However, the ARP Act stabilization funds are meant to support the child care sector during and after the COVID-19 public health emergency. OCC will review construction and major renovation applications to make sure that the use of ARP Act stabilization funds for construction or major renovation will not result in a decrease in the level of child care services provided in the service area. Tribal lead agencies should describe how the child care sector will be maintained while using the ARP Act stabilization funds for construction or major renovation.

Consistent with the existing construction or major renovation application requirements (https://www.acf.hhs.gov/occ/policy-guidance/tribal-construction-or-major-renovation), applications to use ARP Act stabilization funds had to be submitted prior to July 1, 2021.  If a tribal lead agency was unable to submit all the information prior to the deadline, a partial application was accepted.  OCC encourages tribal lead agencies to request targeted technical assistance to complete a final application by the required deadline.  ARP stabilization funds used for tribal construction or major renovation must be liquidated by September 30, 2023; there is no separate obligation deadline for funds used for construction or major renovation.

The facility to be constructed must be used principally to provide direct child care services to children.  The instructions for submitting applications for construction or major renovation (available on the OCC website) require the tribal lead agency to describe the percentage of floor space that will be used to provide direct services to children.  OCC will not consider construction or major renovation applications for facilities that do not provide direct child care services to children.

Yes, tribal lead agencies may use ARP Act stabilization funds for an existing multiyear construction project.  Tribal lead agencies may use CCDF funds from more than one funding stream (i.e., Mandatory, Discretionary, Supplemental, or stabilization funds) to fund a construction or major renovation project, as indicted in their application for construction or major renovation (https://www.acf.hhs.gov/occ/policy-guidance/tribal-construction-or-major-renovation). However, in order to ensure compliance with the “supplement not supplant” requirement, OCC recommends using the ARP Act child care funds to expand the scope of the project rather than amending the funding streams described in the initial application.  OCC would presume any decreases in spending on child care services for eligible individuals below the amount that would have been spent under tribal law and policies in place of the date of enactment of the ARP Act (March 11, 2021) to be supplantation.

Tribal lead agencies may choose to award all of the ARP Act stabilization subgrants to their tribally operated centers.  Tribal lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified as defined in the ARP Act. However, OCC encourages tribal lead agencies to consider expanding their stabilization funds to include providers in the service area who have not previously been part of their CCDF programs, such as family child care providers.  Tribal lead agencies may request technical assistance to expand services to existing child care providers that have not previously been involved in the tribal CCDF program by contacting the OCC regional program office.

OCC reminds tribal lead agencies that the ARP Act requires stabilization funds be used to supplement not supplant tribal funds expended for child care services for eligible individuals, including when stabilization funds are used for tribally operated centers.

OCC recognizes that tribally operated centers may not need to submit an application to indicate their need for funds because the tribal CCDF program operates the center, but the tribal lead agency is still accountable for assurances about the supplantation requirements and ensuring that the funds are being used for allowable activities.  Tribal lead agencies must also ensure that throughout the subgrant period, the tribally operated center meets the certification requirements, including implementing health and safety policies in line with local guidelines, continuing to pay at least the same wages and benefits to staff as those in place at the time of application, and to the extent possible, providing relief from copayments and tuition for families. Also, tribal lead agencies may be accountable for reporting to OCC on data elements that would have been included in the application.  Tribal lead agencies should develop a process to verify the assurances while collecting the information to report on use of funds and data elements about the subgrants and subgrant recipients.  Additional information for tribes that operate their CCDF program under a consolidated 102-477 plan is available here.

Tribal lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified, as defined in the ARP Act, which may include limiting subgrants to tribally operated centers.  However, OCC encourages tribal lead agencies to include center based and family child care programs outside of the tribally operated centers, as well as programs that serve school-age children.

Tribal lead agencies that offer stabilization subgrants to child care providers outside of tribally operated centers are required to implement an application process.  Applications need only request the minimum information necessary to make the subgrants and meet the federal reporting requirements.

Applications must be posted on the lead agency’s child care website. Tribal lead agencies that do not have a child care website must post it on a website associated with the tribe so child care providers know the application is legitimate and from a trusted source.

No, tribal lead agencies are limited to providing stabilization subgrants to providers within their service area.  OCC has interpreted the stabilization subgrants to be restricted to providers within the tribal lead agency’s service area. OCC encourages tribes to coordinate with states and tribes regarding tribally affiliated children who do not live in the tribal lead agency’s service area. Note that child care providers that are receiving stabilization subgrants from a tribal lead agency should be serving at least one Indian child, as defined by the tribal CCDF Plan.

Yes, tribal lead agencies are required to limit applications to providers serving Indian children (as defined by the CCDF Plan) from federally recognized tribes. Like regular tribal CCDF funds, tribal ARP Act stabilization funds are set-aside to serve tribal children. Child care providers that are receiving stabilization subgrants from a tribal lead agency must be serving at least one Indian child but are not restricted from receiving stabilization subgrants from a tribal lead agency if they also serve non-Indian children or have received a stabilization subgrant from a state.  OCC encourages tribal lead agencies to include center-based and family child care programs outside of their CCDF program, as well as programs that serve school-age children.

Yes, tribal culture or language preservation camps can receive stabilization subgrants. Tribal lead agencies may determine which provider types to include in their stabilization subgrant programs, as long as those providers are eligible and qualified as defined in the ARP Act. Tribal lead agencies are encouraged to include center-based and family child care programs, as well as programs that serve school-age children in after-school, summer, and weekend programs.

In order to be a qualified child care provider and eligible to receive a subgrant, a child care provider must either be open to provide child care services or temporarily closed due to public health, financial hardship, or other reasons relating to the COVID-19 public health emergency at the time of application. As this requirement applies to the date of application, a school-age program that is open only during the summer would be eligible for a subgrant if the program applied for the subgrant when it opened again to provide child care services, such as in the summer when the program reopens. If the program is closed during parts of the year due to schedule (e.g., operational only during the school year), they would not be eligible to apply for a subgrant during that time.

OCC reminds tribal lead agencies that CCDF funds, including stabilization subgrants, are restricted to serving children who are under age 13, or at the tribal lead agency’s option, children under age 19 and are physically or mentally incapable of caring for himself or herself, or under court supervision as defined in the tribal CCDF Plan.

Tribal lead agencies may set-aside up to 20 percent of their ARP Act stabilization funds for administration, supply building, and technical assistance. Because efforts to increase access to licensing are considered a supply building activity, funds from this set-aside could be used to create a child care licensing department for the tribe. In addition, all tribal lead agencies were allocated $30,000 as a base amount of the ARP Act stabilization funds prior to allocating funds based on the number of children served.  Base amount funds can be used for any approved CCDF activities and are not restricted by spending requirements.

Regular CCDF funds or COVID relief funds (CARES Act, CRRSA Act , and ARP Act supplemental) have a limit of 15 percent of funds that can be used for administrative purposes.  However, as stated above, efforts to increase access to licensing is considered a supply building activity.  This means that funds used to create a licensing department would count toward quality activities or non-direct services rather than administrative purposes.

The allowable uses of subgrant funds are the same for tribal child care providers as for state and territory providers, except that tribal lead agencies may use any of the stabilization funds for construction or major renovations.

No, tribes that are not already part of a consortium cannot pool their ARP Act stabilization funds to administer a single subgrant program. However, tribal lead agencies who do not currently operate under a consortium may coordinate a common framework such that each tribal lead agency establishes the same requirements and procedures for the stabilization grants. For example, a shared framework might involve using a common provider subgrant application, developing a shared model for estimating child care provider operating expenses and setting subgrant amounts, and coordinating outreach to eligible child care providers.

Paying a share of the ARP Act stabilization funds to another entity, including a bookkeeping firm, to apply for stabilization funding and assist with documentation as part of the grant management, is not an allowable use of the ARP Act stabilization funds. Stabilization funds can only be used for services “necessary to maintain or resume child care services.” Paying another entity to handle the applications for stabilization funding does not fall into this category. In addition, lead agencies can and are expected to use some of their ARP Act stabilization set-aside to help child care providers access and apply for assistance, free of charge to the provider.

Yes, Lead Agencies may pay child care staff based on a child’s enrollment rather than attendance. This is consistent with the statutory requirement at section 658E(c)(2)(S)(ii) of the Act that requires Lead Agencies to support the fixed costs of providing child care services by delinking payments from an eligible child's occasional absences due to holidays or unforeseen circumstances such as illness, to the extent practicable.  

Yes, Tribes may amend their CCDF Plan to change their definition of “Indian Child.”  While Tribal Lead Agencies have some flexibility in defining "Indian Child," the definition must be limited to children from federally recognized Indian Tribes, consistent with the CCDBG Act's definition of Indian Tribe (45 CFR § 98.2).  Allowable changes could include children who are Tribal members, whose membership is pending, who are eligible for membership, and/or are children/descendants of members.  This could also include adopted children, foster children, and step-children, etc.  In order to change their definition of an Indian child, a Tribe would need to submit a CCDF Plan amendment (see Program Instruction CCDF -ACF-PI-2019-03 for more information about submitting CCDF Plan amendments).  In addition, if the Tribe’s service area overlaps with other Tribes’ service areas, Tribes should consult to ensure the children in the adjoining areas are not being served by other Tribes.  Such an amendment, however, would not modify the Child Count.  There are only limited circumstances under which the Child Count can change.

When considering changes to policies and program requirements, CCDF Lead Agencies have two main options for such changes: (1) Amend CCDF Program Requirements, through a Plan Amendment if Necessary, and (2) Apply for a Waiver for Extraordinary Circumstances, with subsequent Amendment if needed.

1. Amend CCDF Program Requirements, through a Plan Amendment if Necessary: If the Lead Agency needs to revise some program policies, but would still be in compliance with federal requirements, they can do so without a waiver (e.g., expanding definition of protective services to accommodate impacted families; waiving copays for a portion of the caseload, etc.). A Plan amendment is required for any substantial program change (e.g., change in eligibility, rates, copays, etc.) and is required within 60 days of the effective date of the requirement.  A Plan amendment should not create any delay since the Lead Agency may proceed with implementing the program change, and subsequently submit the amendment within 60 days
2. Apply for a Waiver for Extraordinary Circumstances: If the Lead Agency needs relief from specific CCDF requirements (e.g., a reduction in 12-month eligibility for impacted families) due to the COVID-19 situation, the Lead Agency may apply for a waiver for Extraordinary Circumstances.  However, OCC reminds Lead Agencies that a waiver for extraordinary circumstances is only necessary if the change would not comply with federal CCDF requirements; otherwise, changes can be made through Option 1: amending requirements, through Plan amendments if necessary.  Examples of changes that would require a waiver include exempting providers from some or all health and safety standards, health and safety training requirements, background check components;  suspending annual inspections of providers; changing income eligibility to be higher than 85% of State Median Income; or changing the subsidy eligibility period to be less than 12 months. Upon approval of the waiver, the Lead Agency has 60 days from the date of approval to submit any associated amendments for the waiver.

The CCDF rule allows for copayments to be waived for families whose incomes are at or below the poverty level for a family of the same size, for children in protective services, or other criteria the Lead Agency establishes. This enables Lead Agencies to have the flexibility to define in their CCDF Plan the criteria that the Lead Agency believes would best serve subsidy families, such as families affected by COVID-19 circumstances.

As noted at section 45 CFR 98.21(a)(3) of the CCDF rule, Lead Agencies are prohibited from increasing the family co-payment amount within the minimum 12-month eligibility period (except for families eligible through graduated phase-out).

Lead Agencies may temporarily lower a family’s co-payment while the family is experiencing temporary or non-temporary job loss. However, when families resume work, it would not be considered an increase to subsequently raise the co-payment to the original amount, provided it does not exceed the amount established at the previous eligibility determination/re-determination.

States and territories are restricted from using CCDF funds for major renovations but can use CCDF funds for minor renovations. Major renovation is defined as: (1) structural changes to the foundation, roof, floor, exterior or load-bearing walls of a facility, or the extension of a facility to increase its floor area; or (2) extensive alteration of a facility such as to significantly change its function and purpose, even if such renovation does not include any structural change. For example, building a new entrance to better align with CDC health and safety recommendations during drop off/pick up would likely constitute a structural change and would likely not be allowable. However, adding plexi-glass barriers to an existing entry way or entrance would likely be allowable.

Tribes, on the other hand, are permitted to use CCDF funds for construction and major renovation to prevent, prepare for, and respond to, COVID-19. The Tribal Lead Agency must request and receive approval from ACF prior to using CCDF funds for construction and major renovation. Additional instructions for construction and major renovation procedures for Tribes can be found in the Program Instruction (CCDF-ACF-PI-2020-02) on the OCC website.  Tribes may also use CCDF for minor renovation without prior approval.

We remind Lead Agencies to develop emergency preparedness plans that contain guidelines for continuation of child care subsidies and child care services, which may include the provision of emergency and temporary child care services during a disaster, and temporary operating standards for child care after a disaster. State, Territory, and Tribal Lead Agencies have broad flexibility to operate the CCDF program and have a number of options within federal statute and regulation to adapt policies in order to maintain continuity of services for families affected by a disaster. It is important that Lead Agencies have a plan in place to perform essential functions and achieve programmatic continuity during and after an emergency or disaster for families receiving CCDF benefits. These essential functions include (i) continuing payments to child care providers serving children receiving subsidies; (ii) provisions for extending eligibility re-determination for families; (iii) communication with the licensing agency to ensure that licensed programs receiving CCDF funds are safe and operational; (iv) assisting new enrollees or preparing for an influx of families who may need assistance; (v) implementation of a waiting list if the Lead Agency does not have one, as appropriate; and (vi) tracking families receiving subsidies impacted by the disaster.

OCC recommends Lead Agencies to follow guidance established by local and state (or tribal) public health authorities regarding the closure or operation of child care facilities. In addition, Lead Agencies should consult the updated CDC guidance on child care and COVID 19:

Guidance for Child Care Programs that Remain Open: https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare...
Guidance for Schools and Child Care Programs: https://www.cdc.gov/coronavirus/2019-ncov/community/schools-childcare...

The Lead Agency has a number of options:

1. Broaden the Lead Agency’s definition of protective services to permit emergency eligibility as a temporary, short-term measure. A child in a family that is receiving, or needs to receive, protective intervention is eligible for child care subsidies even if certain eligibility criteria are not met. Lead Agencies have the option to waive the income eligibility requirements for children who receive or need to receive protective services, if determined to be necessary, on a case-by-case basis. In emergency situations, Lead Agencies have the option of deeming certain impacted children—such as children of health care, emergency, or other essential workers-- to be in need of protective services and therefore, the regular CCDF eligibility requirements (e.g., income threshold) need not apply. This does not require a waiver, but could require a Plan amendment. It would be OCC’s expectation that Lead Agencies would employ this flexibility only on a temporary basis for the period of the public health emergency related to COVID-19.
2. Use quality dollars to provide immediate assistance to impacted providers, even if they do not currently serve families receiving CCDF. Such an expenditure could be viewed as a necessary to retain the child care supply during the public health emergency. Care provided in emergency situations should be of the highest quality that is reasonably practicable given the particular circumstances. This does not require a waiver, but could require a Plan amendment.
3. Broaden/loosen any State-, Territory-, or Tribal-specific eligibility requirements for CCDF subsidies up to the Federal maximum allowed. For example, a Lead Agency could increase income eligibility up to 85% of State Median Income; many Lead Agencies currently have lower thresholds.  In addition, the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act” (Public Law 116-136) and the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (Public Law 116-260) provided a combined $13.5 billion in supplemental CCDF program funds to help State, Territory, and Tribal Lead Agencies address COVID-19 impacts, as well as some additional flexibilities for the use of those funds.  The supplemental appropriations under the CARES Act and the CRRSA Act can be used to provide child care assistance to health care sector employees, emergency responders, sanitation workers, farmworkers, and other workers deemed essential during the response to the coronavirus, without regard to the income eligibility requirements.
4. Apply for a waiver to use CCDF funds to provide direct services to families who do not meet CCDF eligibility requirements (e.g., with income above 85% of State Median Income; see note above regarding additional flexibility regarding use of the CARES Act and CRRSA Act CCDF program funds) and/or providers who do not meet CCDF health and safety requirements.  Lead Agencies could also apply for a waiver to establish eligibility periods less than 12 months to serve targeted populations (such as health care, emergency, and essential workers) that have a time-limited need for child care.

The Lead Agency may not terminate assistance for family impacted by COVID-19 prior to the end of the minimum 12-month eligibility period if a family experiences a temporary job loss or temporary change in participation in a training or education activity. The CCDF rule’s definition of temporary job loss at 45 CFR 98.21(a)(1)(ii) includes, among other circumstances:

• Absence due to the “need to care for a family member or an illness”;
• “Any reduction in work, training or education hours, as long as the parent is still working or attending training or education”; and
• “Any other cessation of work or attendance at a training or education program that does not exceed three months, or a longer period of time established by the Lead Agency”.
• Such temporary changes would not impact the amount of care the child would receive.

If a parent has a non-temporary loss of job, the Lead Agency has the flexibility to allow the child to remain eligible through the end of the redetermination period. If the Lead Agency chooses to terminate assistance before the end of the eligibility period, the Lead Agency would be required to offer a minimum of 3 months of continued assistance. Lead Agencies have the flexibility to establish continued assistance periods for more than 3 months.

Lead Agencies have the flexibility to determine which children qualify as receiving or needing to receive “protective services,” and could include families affected by COVID-19 circumstances in that definition as a temporary, short-term measure. A child in a family that is receiving, or needs to receive, protective services is eligible for child care subsidies even if the parent is not working or in education or training. For protective services cases, the Lead Agency has the option to waive the family co-payment (in accordance with 45 CFR 98.45(k)(4)) and may waive the income eligibility requirements on a case by case basis in accordance with 45 CFR 98.20(a)(3)(ii)(A).

Lead Agencies have the option to continue serving the child until the next eligibility redetermination, and may establish eligibility periods longer than 12 months. Lead Agencies may also establish periods of continued assistance longer than three months.

Section 658P(4) of the Act indicates that, for purposes of eligibility for CCDF subsidies, an eligible child includes a child who is receiving, or needs to receive, protective services (in addition to children of parents who are working or attending training/education).  Lead Agencies have the option to waive the income eligibility requirements for children who receive (or need to receive) protective services, if determined to be necessary, on a case-by-case basis.  Furthermore, a child in a family that is receiving, or needs to receive, protective services is eligible for child care subsidies even if the parent is not working or in education or training. 

The CCDF regulation at 45 CFR 98.20(a)(3)(ii) clarifies that the protective services category may include specific populations of vulnerable children as identified by the Lead Agency. In instances specific to COVID-19, for example, the protective services population, at Lead Agency option, may include children of health care and emergency workers, and other workers deemed essential by public officials—as a temporary, short-term measure. During the current public health emergency, these essential workers cannot work from home, and many of the regular child care arrangements for their children have closed.  In addition, many of these individuals are working extended or irregular hours, and under stressful circumstances.  As a result, the children of these workers are vulnerable during this time.  To ease service delivery to these children, Lead Agencies may choose to classify them as in need of protective services for purposes of child care subsidy eligibility.  Children do not need to be formally involved with child protective services or the child welfare system in order to be considered eligible for CCDF assistance under this category. The CCDBG Act references children who “need to receive protective services,” demonstrating that the intent of this language was to provide services to at-risk children, not to limit this definition to serve children in the child protective services system.  Including additional categories of vulnerable children in the definition of protective services is only relevant for the purposes of CCDF eligibility and does not mean that those children should necessarily be considered to be in official protective service situations for other programs or purposes.

In addition, the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136) and Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (Public Law 116-260) provided a combined $13.5 billion in supplemental CCDF program funds to help State, Territory, and Tribal Lead Agencies address COVID-19 impacts, as well as some additional flexibilities for the use of those funds. The supplemental appropriations under the CARES Act and the CRRSA Act can be used to provide child care assistance to health care sector employees, emergency responders, sanitation workers, farmworkers, and other workers deemed essential during the response to the coronavirus, without regard to the income eligibility requirements.

A CCDF Lead Agency should not consider the economic impact payments (up to $1,200 for qualifying individuals and an additional $500 per child) as income for CCDF eligibility or co-payment calculations.  These payments count as a rebate or advance payment of a credit that are exempted as income.  Section 103(d) of the American Taxpayer Relief Act amended the relevant statutory provision, 26 U.S.C. § 6409, and specifies that, “… any refund (or advance payment with respect to a refundable credit) made to any individual under this title shall not be taken into account as income, and shall not be taken into account as resources for a period of 12 months from receipt, for purposes of determining the eligibility of such individual (or any other individual) for benefits or assistance (or the amount or extent of benefits or assistance) under any Federal program or under any State or local program financed in whole or in part with Federal funds.”

Without a waiver in accordance with 45 CFR § 98.19 (covering requests for temporary relief from requirements), OCC does not have the authority to provide an extension of the CCDF obligation and liquidation periods. If a Lead Agency is unable to fully liquidate its CCDF FY2018 incurred obligations by September 30, 2020 due to the COVID-19 pandemic, there are three options to consider.

First, Lead Agencies can consider “re-purposing” other obligations in FY2018 or FY2019.  CCDF funds allocated in FY2018 were available for obligation in FY2018 or FY2019.  If a Lead Agency obligated funds during that time on activities that meet CCDF requirements and were not charged to their FY2018 CCDF allocation, it could re-purpose those funds and instead claim the obligation against uncommitted funds for FY2018 and liquidate those funds in order to meet the liquidation deadline for FY2018.  Such action can only be taken if such re-purposing is allowable under the Lead Agency’s rules and if the funds being repurposed meet CCDF requirements and were obligated in FY2018 or FY2019.  Under 45 CFR § 98.67(a), Lead Agencies shall expend and account for CCDF funds in accordance with their own laws and procedures for expending and accounting for their own funds.

Second, if the Lead Agency is unable to re-purpose the funds or does not have policies to allow for this, the Lead Agency can request a waiver of the FY2018 liquidation period due to the COVID-19 for a specified period of time in accordance with 45 CFR § 98.19, requests for temporary relief from requirements. Your regional office can help provide support for submitting these waiver requests.

Third, Lead Agencies should review their own laws and procedures for expending and accounting for their own funds, and, where possible, proceed with the liquidation of existing obligations.

CCDF Federal matching funds are available to states, provided that states match those funds at the Federal medical assistance rate (FMAP). The Families First Coronavirus Response Act (Families First; P.L. 116-127) added a temporary FMAP increase of 6.2 percentage points beginning January 1, 2020, and continuing through the Coronavirus Disease 2019 (COVID-19) public health emergency period. This enhanced FMAP rate has the effect of decreasing the amount that states will be required to spend to claim their full CCDF match allotment. Additionally, FMAP rates are applied quarterly, which means that the original FY 2020 FMAP rates apply to CCDF funds received in Q1, but the enhanced FMAP rates apply to CCDF funds received in Q2, Q3, and Q4. FMAP rates and state matching requirements are published on the GY 2020 state and territory CCDF allocation tables page.

Lead Agencies should follow their Continuity of Operations Plans (COOPs). The CCDF final rule at 45 CFR 98.16(aa) requires the Statewide Disaster Plan (or Disaster Plan for a tribe’s service area) to incorporate guidelines for continuation of child care subsidies and child care services. Lead Agencies have fiduciary responsibility to protect the integrity of the CCDF program funds. As noted in 45 CFR 98.16(cc), Lead Agencies must provide descriptions in their CCDF Plans of (1) internal controls to ensure integrity and accountability; (2) processes to investigate and recover fraudulent payments and to impose sanctions on clients or providers in response to fraud; and (3) procedures to document and verify eligibility, pursuant to 45 CFR 98.68. Finally, Lead Agencies must inspect child care providers for compliance with fire, health, and safety standards in accordance with 45 CFR 98.42. Lead Agencies unable to meet federal statutory or regulatory CCDF requirements due to COVID-19 impacts may apply for a temporary waiver due to extraordinary circumstances in accordance with 45 CFR 98.19.

Under federal rules, lead agencies must ensure that parents of children receiving Child Care and Development Fund (CCDF) assistance have “unlimited access” to their children while they are attending child care.  Ensuring parents have access to their children while they are attending child care is a longstanding CCDF requirement that supports program quality and transparency, as well as parent and family engagement.  Lead agencies must continue to meet this requirement throughout the public health emergency.  However, lead agencies do have flexibility in defining “unlimited access,” and we are deferring to lead agency interpretation, as long as it is recognizably reasonable to the average person, as to how to maintain this policy while balancing health and safety concerns related to the Coronavirus Disease 2019 (COVID-19) public health emergency.

 Section 658E(c)(2)(B) of the Child Care and Development Block Grant (CCDBG) Act, 42 USC 9858c(c)(2)(B), and 45 CFR 98.31 of the CCDF regulations require CCDF lead agencies to have in effect procedures to ensure that child care providers receiving CCDF funds afford parents unlimited access to their children and the providers during normal hours of operation and whenever the children are in the care of the provider.  Federal regulations do not define “unlimited access”.  Rather, lead agencies define their policies to meet this requirement and report them as part of the CCDF plan (45 CFR § 98.16(t)).  If a lead agency allows certain limitations to physical access to a child care facility, child care providers who choose to limit physical access should ensure that parents have a way of contacting the child care provider and the ability to see or take their child out of care during regular hours (e.g., some providers bring children to the entrance of the facility to meet parents).  Further, providers caring for infants must be aware of, and responsive to, parents who choose to breastfeed while their child is in care (e.g., by making arrangements such as providing space specifically for this purpose).  Providers may also consider using technological options that allow parents to check-in remotely, including the ability to see their child and child care provider in the child care setting.

Further, child care providers should keep certain things in mind when determining how to interact with parents in order to control COVID-19.  The Centers for Disease Control and Prevention (CDC) guidance suggests staggering drop-off and pick-up times and/or having a child care provider meet children outside of the facility when they arrive.  For providers that implement this policy, CDC recommends limiting direct contact between parents and staff.  Providers may also require additional screening processes, such as temperature checks and wearing masks, when feasible, during interactions.

Going forward, child care providers should continue to consider CDC guidance and follow lead agency requirements related to COVID-19, and be prepared to update processes if and when states, territories, and tribes resume pre-COVID policies for parental access to children.

Yes, Lead Agencies may enroll new providers to meet increased demand. Absent a waiver, Lead Agencies must require these providers to meet health and safety requirements. Specifically, providers serving children who receive CCDF services would need to meet requirements for health and safety standards, training, inspections, and background checks. However, Lead Agencies may apply for temporary waivers for extraordinary circumstances in response to emergency situations in accordance with 45 CFR 98.19. If approved, these waivers may temporarily exempt Lead Agencies from meeting health and background checks requirements. In order to request temporary waivers for extraordinary circumstances in response to emergency situations, the Lead Agency must submit a written request to the Office of Child Care (OCC) Director (with a copy to the OCC Regional Program Manager), indicating the reason why the Lead Agency is requesting the waiver including a description of the extraordinary circumstances. The request must also provide sufficient detail on the provision(s) from which the Lead Agency is seeking temporary relief and how relief from the sanction or provision, by itself, will improve the delivery of child care services for children and families. The request must also certify and describe how the health, safety, and well-being of children served through CCDF will not be compromised as a result of the waiver.

The waiver request must include the preferred start date (which may be retroactive to the time the emergency occurred) and the duration of the waiver. The request is limited to an initial period of no more than two years from the date of approval, and at most, an additional one-year renewal from the date of approval of the extension. Upon approval of a waiver request, Lead Agencies have 60 days to submit a CCDF Plan amendment to correspond with the provision(s) in the waiver request.

Yes, Lead Agencies can use or modify their absence policy to pay providers if programs are closed or children are absent due to COVID-19. At their option, Lead Agencies may pay providers based on a child’s enrollment rather than attendance (45 CFR 98.45(l)(2)(i)). The statutory requirement at section 658E(c)(2)(S)(ii) of the Child Care and Development Block Grant (CCDBG) Act requires Lead Agencies to support the fixed costs of providing child care services by delinking provider payment rates from an eligible child's occasional absences due to holidays or unforeseen circumstances such as illness, to the extent practicable. Lead Agencies may also use CCDF quality dollars to provide temporary grants or assistance to impacted providers to retain the child care supply during periods of closures. Care provided in emergency situations should be of the highest quality that is reasonably practicable given the particular circumstances.

The CCDF final rule at 45 CFR 98.16(aa) requires the Statewide Disaster Plan (or Disaster Plan for a tribe’s service area) to incorporate guidelines for continuation of child care subsidies and child care services, which may include the provision of emergency and temporary child care services during a disaster, and temporary operating standards for child care after a disaster. State, Territory, and Tribal Lead Agencies have broad flexibility to operate the CCDF program and have a number of options within federal statute and regulation to adapt policies in order to maintain continuity of services for families affected by COVID-19. 

In addition, the Coronavirus Aid, Relief, and Economic Security Act or the “CARES Act” (Public Law 116-136) and the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (Public Law 116-260) provided a combined $13.5 billion in supplemental CCDF program funds to help State, Territory, and Tribal Lead Agencies address COVID-19 impacts, as well as some additional flexibilities for the use of those funds.  The supplemental appropriations under the CARES Act and the CRRSA Act can be used, among other purposes, to provide continued payments and assistance to child care providers in the case of decreased enrollment or closures related to coronavirus, and to assure they are able to remain open or reopen.

While we support Lead Agencies’ attempts to stabilize child care supply and funding during the public health emergency, under existing law and rules, it is not allowable for a Lead Agency to use regular CCDF funds to double-pay subsidies to two different providers for the same child for the same time of service.  However, it would be allowable for a Lead Agency to use the supplemental appropriations under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (Public Law 116-136) or Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021 (Public Law 116-260) to pay for both a closed provider and a new temporary replacement provider; the CARES Act and the CRRSA Act specifically say that the supplemental funds can be used to provide continued payments and assistance to child care providers in the case of decreased enrollment or closures related to coronavirus, and to assure they are able to remain open or reopen.  These laws provided a combined $13.5 billion in supplemental CCDF funds to help State, Territory, and Tribal Lead Agencies address COVID-19 impacts, as well as some additional flexibilities for the use of those funds.  

It would also be allowable for the Lead Agency to use CCDF quality dollars to provide grants to impacted child care providers to improve quality and/or maintain the supply of child care. Care provided in emergency situations should be of the highest quality that is reasonably practicable given the particular circumstances. Alternatively, a Lead Agency may seek a waiver due to extraordinary circumstances that would allow double subsidy payments to two providers for the same child and period of service. 

Yes, Lead Agencies can provide hazard pay to providers that remain open during COVID-19.  We encourage Lead Agencies to take steps to assure that the hazard pay reaches staff actually providing care for those providers. Lead Agencies should ensure that payment practices for each type of provider reflect generally accepted payment practices in order to ensure that families have access to a range of child care options. Lead Agencies may consider additional policies that are fair to providers and promote the financial stability of providers in response to COVID-19.

The $3.5 billion in supplemental CCDF CARES Act funding is subject to the same tax rules as regular CCDF funding.  In other words, there is nothing in the CARES Act that specifically exempts CCDF CARES Act funding from taxation.  State tax rules vary by State.  Regarding Federal taxation, please contact the Internal Revenue Service for guidance. 

Yes, Lead Agencies have the option to pay CCDF subsidies for school-age children for time in child care when the children are completing remote, virtual, or online schoolwork. Section 658M(b) of the Child Care and Development Block Grant (CCDBG) Act, 42 U.S.C. 9858k(b), and 45 CFR § 98.56(c) of the CCDF regulations prohibit spending CCDF for any service provided to students enrolled in grades 1 through 12 during the regular school day. Lead Agencies may interpret this provision (i.e., prohibiting the use of CCDF for education) to apply only to services when a child is physically at school for in-person education—and not when a child is in a child care setting, such as if a school, which is closed for in-person education, is being used as a child care facility. The closure may be a school-wide closure or for “off-days” of a hybrid model (e.g., a combination of in-person, virtual, and/or off days.) If a Lead Agency adopts this interpretation, it would be allowable (but not required) for a Lead Agency to use CCDF for child care services when children are completing remote, virtual, or online schoolwork or instruction while in child care.

However, under the CCDBG Act and CCDF rule, regardless of whether a child is physically at school or not, it is not allowable to use CCDF for any regular education services for which students receive academic credit toward graduation or any instructional services which supplant or duplicate the academic program of any school. Therefore, even if a Lead Agency opts to use CCDF to fund a child care provider’s caregiving and supervision of a child who is participating in remote learning, the Lead Agency cannot use CCDF to fund any instruction or services associated with academic credit or a school’s program. Furthermore, given finite CCDF funding to meet child care needs, the federal Office of Child Care encourages Lead Agencies to set parameters that restrict the use of CCDF for child care services during times when schools are open and children are able to attend safely in person. It would be reasonable, for instance, for Lead Agencies to prioritize services for, or even restrict eligibility to, families with children who are unable to attend school in person because of closures or health reasons over families with children who are able to attend school in person, but opt not to.

In addition, states may use CCDF to subsidize child care services for school-age children (up to age 13) that provide care and supervision in situations where schools are not otherwise providing in-person instruction and an outside source pays for instructional services that are delivered in-person in the child care setting.

OCC has not released specific guidance that addresses all possible scenarios related to categorizing regular educational services for school-aged children that would not be eligible for CCDF subsidies.  Some activities would be clearly unallowable like using CCDF to pay for teachers employed by the schools during the school day when the school is in session, but many circumstances in the COVID-19 context are more nuanced.  Where not addressed by OCC guidance, OCC will defer to Lead Agencies' reasonable interpretation of these decisions and encourages Lead Agencies to provide guidance to providers on implementation of this policy where they think it is useful.  OCC has no plans to mandate specific oversight or compliance measures on this policy.

Yes, Lead Agencies may pay full-time subsidy payment rates for school-age child care as long as the Lead Agency is not paying for time when a child is physically attending school and is not paying for any regular education services. Lead Agencies have the flexibility to define full-time and part-time rates.

The dynamic environment associated with the COVID-19 pandemic has created new challenges for federal, state, and local policy makers charged with the administration of the CCDF program.  ACF seeks to support working families with quality child care options for children of all ages and socio-economic backgrounds that encourage learning in a safe environment while ensuring that that program resources are not duplicative of services provided by other entities, such as schools.  In an effort to properly balance these interests, consistent with statutory and regulatory restrictions on the use of CCDF for school, we offer the following:

A CCDF Lead Agency has the option to use CCDF to pay for tutoring or academic support services, but only if meeting all of the following conditions:

1. The tutoring or academic support services occur within a child care setting as an integral component of the child care services (such as “homework help” or other learning components that have traditionally been a part of many afterschool or school-age child care programs).  Tutoring or academic support services that are stand-alone services or delivered outside of child care settings/services are not an allowable use of CCDF.  Child care services with a tutoring or academic support component that are funded through CCDF subsidies must be paid in accordance with the Lead Agency’s CCDF payment rates.
2. The tutoring or academic support services do not occur during the regular school day pursuant to 42 U.S.C. 9858k(b)(1) and 45 CFR 98.56(c)(1).  CCDF Lead Agencies have the option to interpret this provision (prohibiting funding of services during the regular school day) as applying only to services when a child is physically at school—and not when a child is in a child care setting.  Alternatively, CCDF Lead Agencies also have the option of interpreting the prohibition as applying only during times when schools are open for in-person classes, since there may not be a “regular” school day during times when schools are closed for in-person classes. 
3. The child cannot receive academic credit towards graduation solely for participating in the tutoring or academic support itself, pursuant to 42 USC 9858k(b)(2) and 45 CFR 98.56(c)(2).
4. The tutoring or academic support services do not duplicate or supplant the academic program of any public or private school, pursuant to 42 USC 9858k(b)(3) and 45 CFR 98.56(c)(3), although the services may supplement or enrich the child’s education. 

Yes, electronic equipment is an allowable use under CCDBG as an activity to improve the quality of center-based, home-based, or in home child care services provided for school-aged children (45 CFR 95.53(a)(10)).  Lead Agencies should consider whether there are more appropriate sources of funding—such as public education dollars—to pay for this equipment.  The purchase of such equipment may be more appropriate in circumstances where the child care provider will use it for additional technology-based learning or recreational activities in the child care program beyond virtual school instruction. 

No, CCDF funds cannot be used to purchase laptops or equipment solely for the purpose of allowing children to access virtual school instruction from home.  CCDF funds provide financial assistance to low-income families to access child care so they can work or attend a job training or educational program, and provide resources for quality improvement of child care.  Therefore, there must be a connection to non-parental child care in order to use CCDF funds.  Lead Agencies should consider whether there are other sources of funding—such as public education dollars—to pay for equipment being used by children and families in the home.