Supportive Services Resources - Welfare to Work Vouchers

Childcare after Welfare Reform: an Overview

Childcare assistance for the poor changed dramatically in 1996 with passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The legislation eliminated federal childcare entitlements. This legislation also consolidated the four major sources of federal childcare subsidies for low-income children into a single block grant for states-the Childcare and Development Fund (CCDF). The consolidated funding system is intended to help states eliminate gaps in assistance for families as the families' circumstances change. However, the elimination of the entitlement funding may also mean that some working poor families do not receive assistance as the limited funds are reserved for certain populations (i.e., families transitioning off of welfare).

The U.S. Department of Health and Human Services (HHS), which administers CCDF, issued final regulations in July 1998. As with other block grant programs, each state must submit a plan to HHS detailing how the state will spend the grant. However, the new federal law allows states greater flexibility and autonomy in designing their childcare assistance programs. This provides an opportunity to streamline the complex system that existed prior to PRWORA and design a system that better meets the states' childcare needs and objectives. While neither CCDF nor Temporary Assistance to Needy Families (TANF) provides a federal entitlement to childcare, some states retain a childcare guarantee for TANF families, families who leave the TANF program, or low-income families regardless of welfare status. To learn about the childcare system in your state, visit the National Childcare Information Center's State Profile page.