Stabilizing Child Care and COVID-19 FAQs

Publication Date: June 16, 2021

The Frequently Asked Questions (FAQs) describes how Lead Agencies can support the stability of the child care sector during and after the COVID-19 public health emergency and measures to prevent, prepare for, and respond to coronavirus. Questions are grouped in the drop-down menu below into four major categories—ARP Stabilization Grants, Supplemental Funds, Tribes, and Emergency Response—and each category has subcategories.

Description of Categories

ARP Stabilization Grants — Congress awarded approximately $24 billion to the CCDF program with the goal of providing financial relief to child care providers to help defray unexpected business costs associated with the COVID-19 pandemic, and to help stabilize their operations so that they may continue to provide care. States, territories, and tribes must use the majority of these funds to provide subgrants to child care providers. FAQs in this category focus on questions about how to implement subgrant programs and allowable uses for these funds by the provider.

Supplemental Funds — Congress awarded additional (or “supplemental”) funds to the CCDF program through several COVID-19 relief packages (i.e., the CARES Act, the CRRSA Act, and the ARP Act). These funds, which have different flexibilities and restrictions from regular CCDF funds, can be used to respond to the COVID-19 pandemic while carrying out the activities of CCDF programs. These FAQs describe those flexibilities and answers questions about how to use the COVID-19 Supplemental funds.

Tribes — Tribal Lead Agencies have additional flexibilities to meet the unique needs of the populations they serve. FAQs under this heading discuss stabilization subgrants and supplemental funding in relation to Tribal-specific flexibilities.  

Emergency Response  includes FAQs about temporary, short-term measures and existing flexibilities available to Lead Agencies under CCDF that may be taken during the current public health emergency in response to COVID-19.

ARP Stabilization Grants: Applications

If a provider meets applicable standards when they apply but no longer meets them (e.g., a significant licensing violation jeopardizing child safety) prior to receiving funds, can lead agencies reverse an application decision before awarding funds?

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.

If a child care provider is temporarily closed due to COVID-19 at the time of application, is there a timeframe for when the provider must reopen to qualify for a subgrant?  Can the lead agency require a provider to reopen within a certain time?

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 Visit disclaimer page.)

Are lead agencies required to post ARP Act stabilization subgrant applications online even if they are sending a prepopulated application to eligible providers?

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) Visit disclaimer page.; 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.

Do ARP Act stabilization subgrant applications have to include the certifications?

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) Visit disclaimer page).  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.

ARP Stabilization Grants: Certifications

What is the time period during which a child care provider must meet the three certifications required in the ARP Act stabilization subgrant applications?

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

If child care providers must certify they will continue to pay at least full compensation and benefits throughout the life of the ARP Act stabilization subgrant, does that mean they have to use subgrant funds to cover staff wages?

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.

Can child care providers receiving an ARP Act stabilization subgrant terminate an employee for cause during the life of the subgrant?

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.

ARP Stabilization Grants: Copays

Are child care providers required to provide relief from copayments and tuition for families in their care while they are receiving an ARP Act stabilization subgrant?

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 Visit disclaimer page 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 Visit disclaimer page 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.  

ARP Stabilization Grants: Renovation

Questions and answers will be added at a later date. 

ARP Stabilization Grants: Monitoring and Documentation

Questions and answers will be added at a later date. 

ARP Stabilization Grants: Eligible Providers

Does the lead agency have any discretion in deciding which provider types will be recipients of ARP Act stabilization subgrants?

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 Visit disclaimer page.  Lead agencies are encouraged to include center-based and family child care programs, as well as programs that serve school-age children.

Are school-age programs that are not open during the summer due to scheduled closure (and not because of COVID-19) eligible for subgrants?

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.

What are requirements around including Head Start programs in the group of eligible providers for ARP Act stabilization subgrants?

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) Visit disclaimer page.  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.

Would a child care provider that is temporarily closed due to a lack of qualified staff or demand because businesses have not fully reopened and children are still in virtual school be considered a qualified provider?

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.

Are child care providers that are regulated under state and local health and safety standards, but do not meet CCDF requirements at the time of application, eligible for ARP Act stabilization subgrants?

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 Visit disclaimer page 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.

If a provider has a license but had their Provider Services Agreement for subsidy revoked due to fraud or misappropriation, or is under investigation for either, do they qualify for funding?

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.  

Is a child care program that permanently closed after 3/11/2021 eligible for an ARP Act stabilization subgrant?

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.

ARP Stabilization Grants: Fiscal Policy

The ARP Act uses the term "subgrants" when describing the stabilization funds awarded to qualified child care providers. Are lead agencies required to use their agencies' official subgrant process?

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

Are Data Universal Numbering System (DUNS) numbers or Unique Entity Identifiers (UEIs) a requirement for the subgrants?

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 Visit disclaimer page)

Are child care stabilization subgrants considered “payments made to beneficiaries of a federal program," as described in 45 CFR 75.2, similar to direct child care subsidies paid under the voucher program? Or are these considered “sub-recipients”?

Child care stabilization subgrants included in the ARP Act Visit disclaimer page 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 Visit disclaimer page

ARP Stabilization Grants: Intermediaries

Are intermediaries subject to the same obligation and liquidation periods for the ARP Act stabilization funds? Does it matter if they are administering the subgrants versus one of the administrative activities?

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 Visit disclaimer page 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.

What role can intermediaries play with the ARP Act stabilization subgrants?

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 Visit disclaimer page (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.

ARP Stabilization Grants: Reimbursement

Questions and answers will be added at a later date. 

ARP Stabilization Grants: Set-aside

Can lead agencies use ARP Act stabilization funds to hire staff to administer the stabilization funds, including term-limited staff?

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.

ARP Stabilization Grants: Lead Agency Spending

Are lead agencies required to submit plans to OCC about how they plan to spend their ARP Act stabilization funds and ARP Act supplemental discretionary funds?

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. 

Are lead agencies required to spend down previous supplemental relief funding (i.e., CARES Act and the CRRSA Act) before spending the ARP Act stabilization funds?

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.

Can a lead agency use stabilization funds to incentivize license-exempt, non-CCDF-eligible providers to become CCDF-eligible and therefore eligible to receive an ARP Act stabilization subgrant?

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 Visit disclaimer page, and ARP Act supplemental) and regular CCDF funds to also help providers become CCDF-eligible.

Some CCDF lead agencies planned to use regular CCDF, CARES, or CRRSA funds for stabilization grants. Can CCDF lead agencies reprogram these more flexible funds for other allowable activities and fund stabilization grants with the ARP Act funding?

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.

Can ARP Act stabilization funds be used to fund direct child care services, such as covering the price of a child care slot?

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.

Can ARP Act child care stabilization funds be used to provide home visiting 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.

ARP Stabilization Grants: Subgrant Amount and Operating Expenses

Do child care providers applying for ARP Act stabilization subgrants have to submit specific documentation to confirm their current operating expenses?

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.

As part of the process for determining ARP Act stabilization subgrant award amounts, can lead agencies use the size of a child care program to estimate current 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.

Should a child care provider’s current operating expenses be calculated after deducting income, including child care subsidy payments?

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.

Is there a limit on the dollar amount of an ARP Act stabilization subgrant?

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 Visit disclaimer page and be substantial enough to stabilize struggling child care providers.

Can a lead agency incentivize or provide a separate category of funding to child care programs that agree to address priority areas such as staff bonuses, serving children in CCDF, or paying for child care costs for child care staff employees?

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.

ARP Stabilization Grants: Taxes

Are child care stabilization subgrants provided under the ARP Act taxable?

The ARP Act  Visit disclaimer pagedoes 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.

ARP Stabilization Grants: Provider Use of Funds

Can ARP Act stabilization subgrant funds be used to assist in the purchase of a child care program?

No, ARP Act stabilization subgrants cannot be used to assist in the purchase of a child care program.  The ARP Act Visit disclaimer page 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.

Can ARP Act stabilization subgrants be used to help a new child care provider open or a permanently closed child care provider reopen?

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 Visit disclaimer page, and ARP Act supplemental funds) to help providers open or reopen.  (See section 2202(d)(B)(i) and (ii) of the ARP Act Visit disclaimer page.)

Supplemental Funds: Eligibility/Redetermination

Can you clarify whether the unemployment benefits provided under the Coronavirus Aid, Relief, and Economic Security Act or CARES Act should be treated as income for the purposes of determining CCDF eligibility and family co-payment amounts?

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 Visit disclaimer page

Are essential workers receiving subsidies funded by the CARES Act or the CRRSA Act program fund subject to the minimum 12-month eligibility period? *Note: Changes made on 12/29/2020 are italicized.

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.

Supplemental Funds: Provider Eligibility

Can child care providers receive CCDF funding (e.g., grants from CCDF quality dollars) from the CARES Act or CRRSA Act in addition to other federal or state program funds (e.g., the Payment Protection Program from the Small Business Administration)?

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).

Supplemental Funds: Use of Funds

The CARES, CRRSA, and ARP Acts exempt families of essential workers from income eligibility requirements to receive funds for child care assistance. Are families of essential workers subject to the restriction of family assets that exceed $1 million?

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) Visit disclaimer page 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.  

Can CARES Act funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act or the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) of 2021 be used to upgrade IT or data systems?

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.

Can CCDF funds be used to purchase COVID-19 testing kits for use at child care facilities?

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.

Can CCDF funds be used to provide sanitation and cleaning supplies to families?

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.

Can CCDF funds be used to pay the salaries of staff hired to assist with cleaning and health screening?

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)).

Supplemental Funds: Vaccination

Can CARES Act, CRRSA Act, and ARP Act Supplemental Discretionary funds be used to provide incentives for providers to be vaccinated?

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)] Visit disclaimer page.  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.

How can CCDBG supplemental funds provided by the American Rescue Plan (ARP) Act be used to support health and safety in child care settings by supporting families in accessing the COVID-19 vaccination?

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.

Supplemental Funds: Renovation

Can CARES Act or CRRSA Act funds be used for construction or renovation?

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: Construction

Questions and answers will be added at a later date. 

Tribes: Eligible Providers

Questions and answers will be added at a later date.

Tribes: Use of Funds

May Tribes use CARES Act funds to serve children outside of their service area (e.g., in adjoining counties)?

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.

Tribes: ARP Stabilization Grants Construction

Can a tribal lead agency use their full ARP Act stabilization allocation for construction?

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.  Lead agencies are reminded that ARP Act stabilization funds, including those used for construction or major renovation, must be obligated by September 30, 2023.

Can a tribal lead agency use ARP Act stabilization funds to construct administrative offices and parent/provider training center?

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.

Can a tribal lead agency use funds for an existing multiyear construction project?

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.

Tribes: ARP Stabilization Grants Eligible Providers

We only use our CCDF funds to support our tribally operated child care center. Can we use all of the ARP Act stabilization subgrant funds for the tribally operated center?

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.

If we only use our CCDF funds to support our tribally operated child care center, do we have to have an application process?

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.

We use our CCDF funds for tribally operated centers and subsidies to other child care providers. Can we use all of the ARP Act subgrant funds for the tribally operated center? Do we have to have an application process?

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.

We use our CCDF funds for tribally operated centers and subsidies to other child care providers. Do we have to have an application process?

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.

Can a tribal lead agency provide ARP Act subgrants to providers not within its service area if the provider is serving Indian children (as defined by the CCDF Plan)?

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.

Are tribal lead agencies required to limit ARP Act stabilization subgrant applications to providers serving Indian children (as defined by the 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.

Are tribal culture or language preservation camps eligible for ARP Act stabilization subgrants?

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.

Tribes: ARP Stabilization Grants Use of Funds

Can a Tribal lead agency use funds to create a child care licensing department for the tribe?

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 Visit disclaimer page, 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.

Are tribal ARP stabilization subgrants subject to all the same allowable uses as those for states and territories?

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.

Can multiple tribal lead agencies pool their ARP Act stabilization funds and administer a single subgrant program?

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.

Tribes: Provider Payment

Can Lead Agencies that directly operate child care programs (such as Tribally operated child care centers) continue to pay child care staff, if child care programs close due to COVID-19?

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.  

Tribes: Emergency Response

May Tribes expand their definition of an “Indian Child” to serve more children during the COVID-19 pandemic?

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.

Emergency Response: Amendment/Waiver

What options do Lead Agencies have when considering changes to CCDF policies and program requirements?

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.

Emergency Response: Copays

What flexibilities do Lead Agencies have to adjust families’ co-payments if they are affected by COVID-19 job loss?

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.

Emergency Response: Renovation

Can CCDF be used to pay for renovation of child care facilities, including family child care homes, to support COVID-19 safety policies and practices?

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.

Emergency Response: Disaster Plans

What types of planning can Lead Agencies take, when evaluating how to handle provider payments, family applications, and unannounced inspections if there is an outbreak impacting Lead Agency staffing or a drop in available child care due to COVID-19?

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.

Does the Office of Child Care have any recommendations or guidance around the closure or operation of child care facilities?

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...

Emergency Response: Eligibility/Redetermination

Can a Lead Agency use CCDF to pay for child care for children who are not currently CCDF-eligible (e.g., children of health care and emergency workers), and if so under what circumstances? Note: Changes made on 3/26/2021 are italicized.

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.

If a parent stops working or works fewer hours due to circumstances related to COVID-19 (e.g., voluntary or mandatory quarantine), how does that impact their eligibility for CCDF subsidy?

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).

If a parent is not working after three months of continued assistance due to COVID-19 circumstances, how long can CCDF subsidy payments continue?

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.

What kind of populations can be included in the “protective services” eligibility category during the COVID-19 situation? Note: Changes made on 3/26/2021 are italicized.

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.

Should a CCDF Lead Agency count the $1,200 economic impact payments to individuals under the CARES Act as income when it determines eligibility and family co-payment amounts for CCDF or disregard them?

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.”

Emergency Response: Fiscal Policy

Can Lead Agencies receive an extension on the date to liquidate FY2018 CCDF funds (including FY2018 funds obligated for tribal construction or major renovation)?

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.

How does the FMAP enhancement as part of the Families First Act affect the state match for CCDF Federal Matching funds?

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.

Emergency Response: Improper Payments

What steps should Lead Agencies take to ensure effective regulatory oversight of CCDF programs if there is a State, Territory, or Tribal government mandated curfew/quarantine/telework policy for Lead Agency staff due to COVID-19?

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.

Emergency Response: Parental Access

Can CCDF lead agencies allow child care providers to limit physical entry of parents into child care facilities as a means of controlling COVID-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.

Emergency Response: Provider Eligibility

If COVID-19 results in increased child care demand (e.g., all schools close down and parents still need to work during the day), can the Lead Agency enroll temporary unlicensed care providers to serve additional 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.

Emergency Response: Provider Payment

Can CCDF Lead Agencies continue to pay providers, if child care programs close and/or parents keep their children home due to COVID-19?

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.

For a child receiving a CCDF subsidy, can the Lead Agency pay two child care providers for the same time period—one temporarily closed due to COVID-19, and a second (such as a relative) who is temporarily providing care while the first provider is closed?

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. 

Can Lead Agencies provide "hazard pay" for providers that remain open and care for children during COVID-19 situation?

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.

Do child care providers need to pay taxes on the CCDF CARES Act funding they received?

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. 

Emergency Response: School-age

Can Lead Agencies use CCDF funds to pay for subsidies for school-age children who participate in remote, virtual, or online schoolwork while in child care? *Note: Changes made on 11/13/2020 are italicized.

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.

Can Lead Agencies pay full-time payment rates for these school-age children on remote learning days?

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.

Can CCDF be used to pay for tutoring and academic support services?

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. 

Can CCDF funds be used to provide electronic equipment to child care providers for school-aged children to access virtual instruction while in child care facilities?

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. 

Can CCDF funds be used to purchase laptops or other equipment for children to access virtual schooling/resources from home?

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.

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