Key Provisions of CCDF

Below are key provisions of CCDF. More detailed information is available throughout this resource guide.

Key CCDF Provisions

  • CCDF Plan
  • Consumer and provider education
  • Eligible children
  • Eligible families
  • Eligible providers
  • Establishing priorities
  • Family cost sharing
  • Parental choice
  • Payment methods
  • Provider payment rates
  • Licensing of providers
  • Health and safety
  • Criminal background checks
  • Minimum expenditures on quality
  • Activities to improve the quality of care
  • Limit on administrative costs
  • Minimum for direct services
  • CCDF Plan (ACF-118): By statute, Lead Agencies are required to have in place an ACF-approved CCDF Plan, describing how a Lead Agency will implement the provisions of the CCDBG Act of 2014 and CCDF regulations to be submitted on a triennial basis. [1] States are required to submit plan amendments as changes are made in the implementation of the program. In the CCDF Plan, states provide descriptions of the child care program and certify or assure that specific requirements are met as required by the statute. Submission date is July 1st every 3 years (beginning with 2016). 

  • Consumer and provider education: The CCDBG Act and CCDF final rule require Lead Agencies to collect and disseminate certain consumer education information to parents of children receiving CCDF assistance, the general public, and, where applicable, child care providers. The law and rule require states to provide information to the public about choosing child care. Specifically, the rule requires states to establish a consumer-friendly and easily accessible website that ensures the widest possible access to services for families who speak languages other than English and people with disabilities. States must also develop and disseminate materials to parents with young children to help them understand the importance of monitoring their children’s development during key milestones in the first years, including highlighting how parents and child care providers may access early screenings for developmental problems. CCDF parents must be given a consumer statement with easily understandable information about the provider they choose, including health and safety records, last date of inspection, and any voluntary quality standards met by the provider. The statement must also include general information about background checks, parental complaints, and equal access. [2]

  • Eligible children: By statute, a CCDF Lead Agency may deem eligible children younger than age 13 who are U.S. citizens or qualified legal aliens. By regulation, a Lead Agency also may deem eligible children younger than 19 who are physically or mentally incapable of self-care, under court supervision, or in need of protective services as defined in the CCDF Plan. [3]

  • Eligible families: By statute, Lead Agencies may serve families whose parents are working or in education or training activities, and families whose children are receiving protective services. By statute, Lead Agencies may serve families whose income levels do not exceed 85 percent of the state median income (SMI) for a family of the same size, and whose family assets do not exceed $1,000,000 (as certified by a member of such family). [4]

  • Eligible providers: An eligible child care provider is a center-based child care provider, a family child care provider (FCC), an in-home child care provider, or another provider of child care services for compensation that is licensed, regulated, or registered under applicable state or local law and satisfies state and local requirements, including health and safety requirements applicable to the child care services it provides; or a child care provider who is 18 years of age or older who provides child care services to eligible children who are by marriage, blood relationship, or court decree, the grandchild, great grandchild, sibling (if such provider lives in a separate residence), niece, or nephew of such provider, and complies with any applicable requirements that govern child care by the relative involved. [5]

  • Establishing priorities: By statute, Lead Agencies must give priority to children with special needs and to children from families with very low income. Lead Agencies have the flexibility to define in their CCDF Plans the terms “very low income” and “children with special needs,” which may include vulnerable populations as defined by the Lead Agency. Under the 2016 CCDF final rule, Lead Agencies must also give priority to children experiencing homelessness. In addition, states have chosen to give priority to such categories as teen parents, families receiving Temporary Assistance for Needy Families (TANF), families transitioning off TANF, non-TANF teen parents with no high school diploma or general equivalency diploma, families with medical emergencies or who have been impacted by disaster, parents who are students in postsecondary education, parents in homeless or domestic violence shelters, children in protective services or in foster care, and children in need of before- and after-school care. [6]

  • Family cost sharing: Federal law and regulations require that families contribute to the cost of care on a sliding fee basis. The CCDF Plan must include information on how the sliding fee scale(s) is used to determine family contributions. The regulations require that the scale is based on family size and income, and not the cost of care or amount of subsidy payment. The Lead Agency may add other factors, such as the number of children in care and rules for counting income. The Lead Agency may exempt from copayments families with income at or below the poverty level for a family of the same size. In addition, the Lead Agency may exempt from copayments families with children who receive or need to receive protective services or families that meet other criteria established by the Lead Agency. [7]

    Relative Providers

    Relative providers are defined as those people

    • who are 18 years or older, and
    • who are providing care only to children who are, by marriage, blood relationship, or court decree, their
      • grandchildren,
      • great-grandchildren,
      • siblings (if the provider lives in a separate residence), or
      • nieces or nephews. [19]
  • Parental choice : The statute provides for parental choice in allowing parents to enroll their children with providers who have a grant or contract for child care services, or be provided a child care certificate. Lead Agencies are required to offer the choice of a provider who has a grant or contract if such services are available. If provided a certificate, the regulations require parents to be allowed to choose any legally operating child care provider who meets the CCDF health and safety requirements and who is eligible to provide services to families receiving CCDF assistance. A certificate or voucher is defined in the statute as a check or other disbursement that is issued by a state or local government under the statute directly to a parent who may use the certificate or voucher only as payment for child care. 

    The regulations define child care providers as one who provides child care either in a center, a family home, or in the child's own home. [8] Care by a sectarian provider, a relative provider, and any other type of legally provided child care are allowable choices. [9] To receive CCDF Funds, states may not impose health and safety requirements or payment rates that restrict parental choice by excluding any category of care or type of provider; excluding any type of provider within a category of care; limiting access to or choice among categories of care or types of providers; or excluding a significant number of providers in any category or type of care. 

  • Payment methods: The statute requires that states establish policies that reflect generally accepted payment practices for child care providers, including (to the extent practicable) delinking provider payments from occasional absence days, paying on a full- or part-time basis versus hourly, and timely reimbursement for child care services. In addition, Lead Agencies must pay for reasonable mandatory registration fees that the provider charges to private-paying parents (unless the Lead Agency provides evidence that this practice is not generally accepted).  [10]

  • Provider payment rates: Consistent with the requirements in the Act, the Lead Agency must certify in its CCDF Plan that provider payment rates for CCDF subsidies are sufficient to ensure that eligible children have equal access to child care services comparable to those provided to children whose parents are not eligible to receive child care assistance. In order to ensure that payment rates are sufficient, federal regulations require that the Lead Agency describe the following points, among other information, in its CCDF Plan: 1) How payment rates are adequate and have been established based on the most recent market rate survey or ACF pre-approved alternative methodology; 2) How base payment rates enable providers to meet health, safety, quality, and staffing requirements; 3) How the Lead Agency took the cost of higher quality into account, including how payment rates for higher-quality care, as defined by the Lead Agency using a quality rating and improvement system or other systems of quality indicators, related to the estimated cost of care at each level of quality; and 4) How and on what factors the Lead Agency differentiates payment rates. [11]

  • Licensing of providers: By statute, a Lead Agency must certify that it has in effect licensing requirements applicable to child care services provided within the state, and provide a detailed description of such requirements and how they are effectively enforced. 
    If the state uses CCDF funds to support a child care provider that is exempt from the corresponding licensing requirements, the state shall describe why such licensing exemption does not endanger the health, safety, or development of children who receive services from child care providers who are exempt from such requirements in the CCDF Plan. [12]

  • Health and safety: By statute, a Lead Agency must certify that there are requirements in place designed to protect the health and safety of children that are applicable to the providers that serve children supported through CCDF. The requirements must address 10 specified health and safety topics as well as child abuse reporting. With the exception of relative providers, all providers of care to children supported through CCDF must meet the basic health and safety standards—whether through licensure or regulation or through requirements designed by the Lead Agency that apply to unregulated providers serving families receiving CCDF. 

  • Comprehensive background check requirements: By statute, the Lead Agency must establish comprehensive background check (CBC) requirements, policies, and procedures for child care staff members (including prospective child care staff members) of licensed, regulated, or registered child care providers or child care providers eligible to deliver CCDF-funded services. Furthermore, a child care provider receiving CCDF funds is prohibited from employing a child care staff member who refuses to consent to the check, provides false statements, is registered (or required to be registered) on a sex offender registry, or who has been convicted of certain crimes. [13]

  • Minimum expenditures on quality: By statute, states must spend no less than 9 percent of total CCDF expenditures each federal fiscal year on activities to improve the quality of child care services and increase access to high-quality child care. In addition, a minimum of 3 percent of total CCDF expenditures must be used to carry out activities related to the quality of care for infants and toddlers. [14]

    % Quality Set-Aside

    % Infant and Toddler Set-Aside

    Total % Quality Set-Aside

    9% 3% 12%

    Source: CCDBG Act of 2015 658G(a)(2).

  • Activities to improve the quality of child care: The CCDBG Act and CCDF final rule include a new framework for quality investments and activities. States are required to carry out no fewer than one of the following 10 activities:

    1. Supporting the training and professional development of the child care workforce

    2. Improving upon the development or implementation of the early learning and developmental guidelines by providing TA to providers

    3. Developing, implementing, or enhancing a tiered quality rating system for child care services

    4. Improving the supply and quality of child care programs and services for infants and toddlers

    5. Establishing or expanding a statewide system of child care resource and referral (CCR&R) services

    6. Facilitating compliance with state licensing standards as well as requirements for inspection and monitoring

    7. Evaluating the quality and effectiveness of child care programs in the state, including evaluating how programs positively impact children

    8. Supporting accreditation

    9. Supporting state or local efforts to develop or adopt high-quality program standards on health, mental health, nutrition, physical activity, and physical development

    10. Other activities determined by the state to improve the quality of services provided and for which measurement of outcomes is possible. [15]

  • Limit on administrative costs: By statute, a Lead Agency may not spend more than 5 percent of its total CCDF expenditures (discretionary, mandatory, and state and federal share of the matching funds) on administration. Activities such as eligibility determination, child care placement, and providing parents with information about child care services are not considered administration. [16]

  • Minimum for direct services: By statute, a Lead Agency shall, after setting aside funds for quality and administrative activities, use at least 70 percent of the remaining discretionary funds for direct services provided by the state. [17] In addition, at least 70 percent of the mandatory and combined federal and state share of matching funds must be used to meet the child care needs of families who are receiving Temporary Assistance for Needy Families (TANF), are making efforts through work activities to transition off of TANF, or are at risk of needing TANF. [18]


[1] CCDBG Act of 2014 658E; Child Care and Development Fund, 45 C.F.R. § 98.16 (2016).

[2] Child Care and Development Fund, 45 C.F.R. § 98.33 (2016).

[3] CCDBG Act of 2014 658P(4); Child Care and Development Fund, 45 C.F.R. § 98.20 (2016).

[4] CCDBG Act of 2014 658P(3); Child Care and Development Fund, 45 C.F.R. § 98.20 (2016).

[5] CCDBG Act of 2014 658P(6); Child Care and Development Fund, 45 C.F.R. § 98.2 (2016).

[6] CCDBG Act of 2014 658E(c)(3)(B)(i); Child Care and Development Fund, 45 C.F.R. § 98.46 (2016).

[7] Child Care and Development Fund, 45 C.F.R. § 98.45(k) (2016).

[8] Lead Agencies may limit the use of in-home care [Child Care and Development Fund, 45 C.F.R. § 98.30(f)(2) (2016)].

[9] CCDBG Act of 2014 658E(c)(2)(A); Child Care and Development Fund, 45 C.F.R. § 98.30 (2016).

[10] Child Care and Development Fund, 45 C.F.R. § 98.45(l) (2016).

[11] Child Care and Development Fund, 45 C.F.R. § 98.45 (2016).

[12] CCDBG Act of 2014 658E(c)(2)(E); Child Care and Development Fund, 45 C.F.R. § 98.40 (2016).

[13] CCDBG Act of 2014 658H.

[14] Child Care and Development Fund, 45 C.F.R. § 98.50(b) (2016).

[15] CCDBG Act of 2014 658G(b); Child Care and Development Fund, 45 C.F.R. § 98.41 (2016).

[16] Child Care and Development Fund, 45 C.F.R. § 98.54 (2016).

[17] CCDBG Act of 2014 658E(c)(3)(E); Child Care and Development Fund, 45 C.F.R. § 98.50(f) (2016).

[18] Child Care and Development Fund, 45 C.F.R. § 98.50(e) (2016).

[19] CCDBG Act of 2014 658E(c)(2)(I-L); Child Care and Development Fund, 45 C.F.R. § 98.41 (2016).