in effect
This is a final rule from the U.S. Department of Health and Human Services (Office of Child Care) that amends the regulations governing the Child Care and Development Fund (CCDF), the main federal program that helps low-income working families pay for child care. It removes four requirements that a March 2024 rule had imposed on the states, territories, and tribes that run the program. It was published on May 12, 2026, and takes effect July 13, 2026.
The rule rescinds four mandates from the 2024 rule and makes them optional instead. First, it removes the requirement that family co-payments be capped at 7 percent of a family’s income, reverting to the older standard that co-payments simply cannot be “a barrier” to receiving assistance. Second, it drops the requirement that agencies deliver some services through grants or contracts (for example, for infants, children with disabilities, or underserved areas), though families must still always be offered a child care certificate/voucher. Third, it ends the requirement to pay providers in advance (“prospectively”), letting agencies instead pay by advance or by reimbursement, while still paying providers in a timely manner. Fourth, it removes the requirement to pay providers based on a child’s enrollment rather than actual attendance—a policy the document says was estimated to cost $16.5 million per year—while agencies must still separate payment from a child’s occasional absences; HHS estimates the overall change produces about $6.1 million in annualized cost savings.
The rule applies to the state, territory, and tribal agencies (“Lead Agencies”) that administer CCDF—the 50 states, the District of Columbia, 5 territories, and 264 tribal organizations—which no longer have to follow the four requirements but may keep or adopt them by choice; only the co-payment change applies to tribes, since tribes were already exempt from the payment rules. It indirectly affects the families and child care providers in the program (in 2023, subsidies reached more than 1.6 million children from 994,000 families each month), because individual agencies now decide co-payment amounts and how providers are paid.