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  • Dawn Alexander

Proposed Federal CCDF Changes--Open for Public Comment!

Updated: Jul 13, 2023

Proposed rules for CCDG are being posted in the National Register This document is scheduled to be published in the Federal Register on 07/13/2023 and available online at, and on We will update this blog on how to provide Public Comment as your input on the National level will be CRITICAL!! It is 110 pages long so as we review the details we will pull relevant text from the document to post here for easier review! The document contains TONS of National Data encouraging the implementation of these regulations. As we read through it, here are the high points:

CCDF = Child Care Development Fund

Prohibit Family Co-payments that are a Barrier to Child Care Access

First, at § 98.45(b)(5), this NPRM proposes to establish that co-payments over 7 percent of a family’s income are an impermissible barrier to a family receiving assistance, and family copayments must therefore be no more than 7 percent of a family’s income. Section 658E(c)(5) of the Act (42 U.S.C. 9858c(c)(5)) establishes that Lead Agencies must not set co-payment policies that are a barrier to families receiving assistance. If a family receives CCDF for multiple children,

We request comment on whether 7 percent is the correct threshold, including data on child care affordability and the impact high co-payments may have on families’ ability to access child care assistance

Allow Lead Agencies to Waive Co-payments for Additional Families

Second, we propose to amend § 98.45(l)(4), as redesignated, to explicitly allow Lead Agencies the discretion to waive co-payments for two additional populations - eligible families with income up to 150 percent of the Federal poverty level and eligible families with a child with a disability as defined at § 98.2.

We request comment on whether states would benefit from flexibilities providing the option to waive copays for other populations. We also request comments on potential additional categories of families for which co-payments could be waived under this proposed rule.

Finally, to help ensure families are aware of co-payment policies, we propose to add a new requirement at § 98.33(a)(8) that states and territories must post information about their copayment sliding fee scales.

We request comment on the types of information related to co-payments that should be included and if there are other eligibility policies that should be added to the consumer education websites to improve access to the information parents need to make informed choices

Building Supply with Grants and Contracts

This NPRM proposes provisions to improve payment practices to child care providers so more providers will participate in the subsidy program, which in turn will increase parent choice in finding care that meets their needs...Correcting these detrimental payment practices is critical to the financial stability of child care providers and for helping families access high quality child care that meets their needs.

The proposed revisions in this section of the NPRM would require Lead Agencies to use grants and contracts to address the acute lack of supply for certain types of care. This section also proposes to support provider stability by requiring Lead Agencies pay providers prospectively and based on enrollment, as is standard practice for families who do not receive subsidies. Additionally, the proposed revisions in this section clarify that Lead Agencies may account for child care cost considerations and pay providers at the CCDF agency established payment rate approved in the Lead Agency’s CCDF plan, even if it is above the providers’ private pay price. These proposed revisions to payment practices will lead to improved program financial stability, higher-quality care, and increases in the supply of child care, all of which are essential to promoting parent choice in care.7

First, we propose to make changes at §§ 98.16(y), 98.30(b), and 98.50(a)(3) as redesignated, to address the lack of supply of child care for underserved communities and populations that Lead Agencies must prioritize pursuant to the directives in the statute (section 658E(c)(2)(M), 42 U.S.C. 9858c(c)(2)(M)). We propose to require states and territories to provide some child care services through grants and contracts as one of many strategies to increase the supply and quality of child care, including at a minimum, using some grants or contracts for infants and toddlers, children with disabilities, and nontraditional hour care. We would specifically require some use of contracts for these populations because of the particularly stark supply issues that lead to minimal parent choice, but encourage lead agencies to also consider other populations that may benefit from grants or contracts

Sustainable Payment Practices

Second, to support child care provider stability, make it easier for providers to serve children with child care subsidies, and increase parent choices in care, we propose to amend § 98.45(m) to require Lead Agencies to implement payment policies that are consistent with the private-pay market. Specifically, we propose to require Lead Agencies to pay child care providers serving CCDF families prospectively and to either pay these child care providers based on a child’s enrollment or an alternative equally stabilizing approach proposed by the Lead Agency and approved by the OCC in the Lead Agency’s CCDF Plan.

The Act also requires the Lead Agency, to theextent practicable, to implement enrollment and eligibility policies that support the fixed costs of providing child care services by delinking provider payment rates from an eligible child’s attendance which includes occasional absences due to holidays or unforeseen circumstances, such as illness....Prospective payment is the norm for families paying privately (e.g., payment for child care for the month of February is due February 1st) because providers need to receive payment before services are delivered to meet payroll and pay rent. But according to the FY 2022-2024 CCDF States Plans, only eight states and territories pay providers prospectively. Current CCDF regulations allow lead agencies to pay providers within 21 days of receiving a completed invoice. This practice places an up-front burden on providers in serving CCDF families and makes it difficult for providers to accept child care subsidies; providers often mention delayed payments as a key reason why they do not participate in the CCDF program and that it has a destabilizing effect on child care operations.

At § 98.45(m)(2), as proposed, the NPRM deletes two of three current payment practice options at paragraph (m)(2)(ii), which allows for full payment if a child attends at least 85 percent of authorized time, and paragraph (m)(2)(iii), which allows for full payment if a child is absent five or fewer days a month, to require that Lead Agencies pay child care providers based on a child’s enrollment rather than attendance at paragraph (m)(2)(i).

Thirty-six states and territories report they pay based on enrollment not attendance. The fixed costs of providing child care, including staff wages, rent, and utilities, do not decrease if a child is absent, which is why private pay families are generally required to pay for a full week or month, regardless of whether their enrolled child is absent. Providers in states that pay based on attendance either absorb the lost revenue associated with a child’s occasional absences or choose not to participate in the subsidy system and limit parent choices.

The Act and 2016 CCDF final rule require Lead Agencies to implement § 98.45(l)(2) ‘‘to the extent practicable’’ so in continuing policy set in the preamble of the 2016 CCDF final rule, we interpret this language as setting a limit on the extent to which Lead Agencies must act, rather 87 Ibid. than providing a justification for not acting at all (81 FR 67517). We propose to revise paragraph (l)(2) to require Lead Agencies who determine they cannot pay based on enrollment, describe their approach in the CCDF Plan, provide evidence that their proposed alternative reflects private pay practices for most child care providers in the state, territory, or tribe and does not undermine the stability of child care providers participating in the CCDF program.

Paying the Established Subsidy Rate

Finally, this NPRM proposes to codify at § 98.45(g) that Lead Agencies should strive to pay eligible child care providers caring for children receiving CCDF subsidies the Lead Agency’s established subsidy rate in order to account for the actual cost of care, even if that amount is greater than the price the provider charges parents who do not receive subsidy

OCC has prioritized the importance of increasing the percentile on which provider payment rates are based, and in April 2023 determined that any payment rates set at less than the 50th percentile were insufficient to meet the equal access requirements of CCDF

Reducing Bureaucracy for Better Implementation (§ 98.21)

This NPRM proposes changes to lessen the burden on families seeking child

care assistance, making it faster and easier for them to apply for and receive child care subsidies by clarifying ways that Lead Agencies can simplify subsidy eligibility determination, redetermination, and enrollment processes. The proposed revisions encourage strategies for Lead Agencies to expedite families’ access to services by facilitating presumptive enrollment and encouraging an online application option. Additionally, the proposed revisions identify opportunities for Lead Agencies to streamline eligibility policies by leveraging eligibility information from other programs and to align family eligibility timelines. These provisions are designed to align with the Act’s goal of providing families with continuity of care, which benefits child well-being and family economic security.

Presumptive Eligibility (page 34)

This NPRM proposes to amend § 98.21(e) and (h)(5) to clarify that, at a Lead Agency’s option, a child may be considered presumptively eligible for subsidy prior to full documentation and verification of the Lead Agency’s eligibility criteria and eligibility determination. This will help ensure timely access to reliable child care assistance and reduce burden on families.

The proposal further specifies that CCDF payments may be made for presumptively eligible children and those payments will not be considered an error or improper payment if a child is ultimately determined to be ineligible and will not be subject to disallowance, except in cases of fraud or intentional program violation. However, Lead Agencies would be required to implement a minimum verification process that incorporates criteria that reduces the likelihood of error and fraud.

Eligibility Verification

This NPRM proposes to clarify in § 98.21(g)(1) and (2), as redesignated, that Lead Agencies have flexibility to use a family’s enrollment in other public benefits program or documents or verification used for other benefit programs to verify eligibility for CCDF, where appropriate.

Application Processes (page 39)

To make it easier for eligible families to access child care services, we propose a change at § 98.21(f)(1), as redesignated, to require Lead Agencies implement eligibility policies and procedures that minimize disruptions to parent employment, education, or training opportunities to the extent practicable.

Additional Children in Families already Receiving Subsidies

In cases where multiple children in the same family have initial eligibility determined at different points in time, we would encourage Lead Agencies to align eligibility periods to the new child’s eligibility period so that all the children’s re-determinations can occur at the same point in time to limit burden on the family and the Lead Agency.

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