Biden-Harris Administration Announces New Rule to Reduce Costs for More than 100,000 Families Receiving Child Care Subsidies

Today, the Biden-Harris Administration’s U.S. Department of Health and Human Services (HHS), through the Administration for Children and Families (ACF), announced a new rule that will reduce costs for families that receive child care subsidies and improve options for families. This final rule delivers on the Executive Order on Increasing Access to High-Quality Care and Supporting Caregivers, signed by President Biden in April 2023, which directed HHS to reduce child care costs and improve child care payment practices.

The changes make much-needed updates to the Child Care and Development Fund (CCDF), which is the nation’s largest funding stream to help families afford child care and improve quality in child care settings.

Key updates to CCDF include:

• Reducing costs to families: The rule limits the amount that families pay to 7 percent of their household income and makes it easier for states to eliminate co-payments for children in households below 150 percent of the poverty level, families that have a child with a disability, and other vulnerable families.
• Expanding choices for families: The rule makes it easier for families to find child care that meets their needs.
• Increase payments to providers: The rule requires states to make timely payments to child care providers and better cover the cost of providing care, common business practice that will make it easier for child care providers to participate in CCDF and will help stabilize their operations.
• Cutting red tape: The rule streamlines processes to make it easier for families to apply for and receive child care assistance if they have already demonstrated eligibility for another benefit program. This also includes making online applications more accessible and allowing more families to start child care assistance right away so that parents don’t have to disrupt their employment, training, or education.

HHS estimates that approximately 100,000 children will have lower child care costs as a result of this rule.

“President Biden and I believe that every family in our nation should be able to access affordable child care,” said Vice President Harris. “Today, we are taking another important step forward by lowering the cost of child care for more than 100,000 working families that receive federal child care assistance. President Biden and I will continue fighting to cap child care costs at $10 a day for millions of American families and make preschool free for all four-year-olds as we once again call on Congress to get it done.”

“Child care is a necessity for most working families across the country. Today we are taking an important step to reduce costs for families and give them more child care options,” said HHS Secretary Xavier Becerra. “When families have access to affordable, quality child care, they can pursue job opportunities, cover other basic needs, and go to work knowing their children are safe. That’s why the Biden-Harris Administration has made investments in early care and education a top priority – and why we will continue to take actions to support families across the country.”

“We have an opportunity to make improvements for child care providers, who do the critical work of caring for our youngest learners and supporting working families,” said Ruth Friedman, Director of the Office of Child Care. “When child care providers are financially healthy, the whole community benefits.”

Additional information on this rule may be found here.