Child Care Subsidies

Families with very low incomes receive help covering the full cost of early education tuition. Other families make a co-payment (which is a significant discount on tuition) based on a sliding income scale. Through federal Child Care Development Fund dollars and state funding, the subsidy program makes payments to providers to cover the difference between the family’s contribution and a daily reimbursement rate designated by the District.

High-quality, affordable early education is essential to children’s healthy development and a family and community’s economic stability and well-being. Yet, the cost of child care is out of reach for many DC families, including early educators:

• The average cost of center-based infant care for one child in DC is $2,123 per month1, or just below the average cost of housing (monthly rent for a one-bedroom apartment) in the District.2 Child care costs for one child make up more than 20 percent of the median income ($108,492) of families with children in DC.3
• Demand for child care slots outpaces supply. While not all families with infants and toddlers need or desire formal child care, there are more than 23,815 infants and toddlers under age 3 in DC4, and only about 12,000 licensed child care slots available.

Child care assistance helps children and parents thrive and stimulates the economy. High-quality early education supports children’s cognitive, physical, social, and emotional
development, allowing them to develop skills they need to succeed. Parents receiving child care assistance have higher employment rates and fewer work disruptions.6 Child care
assistance also helps providers stay in business, and it boosts the supply of care needed to serve all working parents — something important to any parent on a waiting list for child care. When District families aren’t spending over 20 percent of their income on child care, they have more money to spend elsewhere in the economy.

Working parents, their children, their employers, and the District economy benefit from child care subsidies. In DC, 3,136 infants and toddlers currently participate in the program,1 and there are around 4,000 child care workers in the District.7 They all stand to benefit from one or more of the core four program improvements in the Birth-to-Three Act. By 2028 (under full funding), the subsidy expansion would be available for up to an additional 20,679 infants and toddlers, a projected majority.8

DC families with children under age 13, whose income is below 300 percent of the federal poverty line (approximately $74,000 per year for a family of three9) are eligible for child care assistance if a parent is working or in school, if a child needs or receives protective services, or is deemed “vulnerable.” If a participating family’s income increases, they can still participate in the program as long as their income is below 85 percent of family median income in the District10(approximately $140,000 per year for a family of three11). With full funding, the Birth-to-Three Act would ensure that all families in the District can afford child care, meaning that they spend no more than 10 percent of their household income on child care expenses.

The District subsidy program currently serves children in families with incomes up to 300 percent of the federal poverty level. As DC prepares to expand the program to more families, it is important that the child care workforce is robust, safe child development facilities are abundant, providers are incentivized to participate, families with young children know about the program, and the application process is user friendly and not overly burdensome.