Child care subsidies

Local governments can invest in this strategy using State and Local Fiscal Recovery Funds (SLFRF) from the American Rescue Plan Act (ARPA).

  • This strategy provides assistance to households that can help mitigate the economic impacts of COVID-19. The U.S. Department of Treasury has indicated that strategies that help achieve this outcome are eligible for the use of Fiscal Recovery Funds.
  • Investments in this strategy are SLFRF-eligible as long as they are made in qualified census tracts or are designed to assist populations or communities disproportionately impacted by COVID-19.

Program overview

  • Provide financial assistance to working parents or, in some cases, parents attending school, to cover the costs of certified in-home or center-based child care, which is often higher quality than non-family home-based care

Evidence and impacts

Proven

Ranked as having the highest level of evidence by County Health Rankings and Roadmaps

  • Increased employment and earnings for low-income families
  • Increased enrollment in center-based care for children from low-income households

Best practices in implementation

  • Before any program development, review federal and state statutes and subsidy funding formulas, especially the Child Care and Development Block Grant; they will likely vary dramatically across jurisdictions.
  • Develop clear, simple eligibility criteria – especially around income – and share explanatory materials (ideally written in multiple languages and/or delivered verbally) with families during any recruitment activity or engagement with the program.
  • Create a strong outreach plan to promote the subsidies, such as by developing a presence at child care providers (like Headstart) and human resource administration offices.
  • Streamline the enrollment to the greatest degree possible, including co-locating family services and human resources administration offices, or housing a family services case worker within the human resources office.
  • Provide families with detailed information on subsidy-eligible child care providers and associated costs.
  • Embed flexibility into eligible child care options, giving families a greater opportunity to afford their preferred caregiver, including licensed child care centers and private providers. Consider trade-offs for subsidizing licenses providers based on workforce.
  • Reevaluate participant eligibility only on an annual basis, allowing families to plan for the longer term.

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