INDIANAPOLIS — The Indiana Family and Social Services Administration (FSSA) has announced that it will reduce reimbursement rates for Child Care Development Fund (CCDF) vouchers. This program helps low-income families pay for child care.
The changes, effective October 5, are intended to close a projected $225 million funding gap created by the use of temporary federal COVID-19 relief funds.
According to a statement from the FSSA, the rate cuts will affect various age groups:
- Infants and toddlers will see a 10% decrease in their reimbursement rates.
- The rate for preschoolers will drop by 15%.
- Reimbursements for school-age children (K-12) will be cut by 35%.
Adam Alson, director of the FSSA’s Office of Early Childhood and Out-of-School Learning, said the adjustments were necessary to protect the program. “We made this decision to protect the children and families that depend on CCDF vouchers,” Alson said. “There is only one pot of money—we could either protect providers or kids, and we chose kids.”
The FSSA explained that an overexpansion of child care capacity was made possible by using one-time COVID-19 relief funds in 2021, which lacked a sustainable plan. This led to a projected deficit of $225 million by 2026. The new rates, determined after surveying 25 percent of licensed child care providers, are designed to reflect current operating costs and ensure federal compliance.
While the number of children using CCDF vouchers has decreased from a peak of 68,000 in December, the current number of approximately 55,000 children is still significantly higher than the pre-pandemic average of 35,000.
“We remain committed to strengthening Indiana’s early childhood system,” Alson added. “While we regret the necessity of these adjustments, they are essential to ensuring uninterrupted access to affordable care for Hoosier families.”
