North Dakota Child Care Assistance Program

2 Apr

Overview

The North Dakota Child Care Assistance Program helps low-income families pay for childcare so parents can work or attend school. In 2023, the state’s Legislative Assembly approved increased provider payment rates, reduced family co-payments, and additional funding to support care for infants and toddlers. Building on this momentum, the state policy team implemented extended eligibility periods, improved access for families engaged in job searching, and simplified the application process for homeless households. Together, these efforts strengthen the program and complement the Working Parents Child Care Relief Program in supporting North Dakota families across a range of income levels

Why It Matters

Many North Dakota families cannot afford childcare without help, making it hard for parents to work or continue their education. The Child Care Assistance Program directly addresses this problem by reducing what families pay for childcare, making it possible for parents to join the workforce while their children receive quality care.

The program has recently focused on improving affordability by eliminating co-payments for the lowest-income families (below 30% of state median income) and reducing co-payments for most others to less than 6% of their overall income, as federally recommended.. Higher payments to providers caring for infants and toddlers help address the higher costs of caring for the youngest children, when care is most expensive and often hardest to find.

The program is especially important in parts of North Dakota considered "childcare deserts," where families have few options for care. By ensuring providers receive reliable payments, the program helps keep childcare businesses open while giving parents the financial support they need.

Quick Facts

Core Model: Financial assistance that reduces what low-income families pay for childcare
Notable Feature: Families now remain eligible for an 18-month period, giving them stable, uninterrupted support
Eligibility: Income up to 75% of state median income for new applicants; 85% for existing participants
Current Funding: $42 million for 2023-2025, including $22 million for program expansion, $15 million for infant and toddler care incentives, and $3 million for quality-rated provider payments
Participation Rates:
- Children: 5,028 children served monthly
- Providers: 1,275 licensed providers enrolled (97% of all licensed providers)
Program Coverage: Statewide across all North Dakota counties

Background

The North Dakota Child Care Assistance Program has undergone significant improvements since 2023, following the passage of legislation that allocated $42 million to enhance the program through multiple phases of improvements implemented throughout 2023 and 2024.

Key enhancements include eliminating co-payments for families with incomes below 30% of state median income, increasing reimbursement rates for infant and toddler care, providing bonus payments to quality-rated providers, extending the eligibility period from 12 to 18 months, and creating a special benefit for childcare workers that covers 100% of their childcare costs.

These changes are part of a coordinated effort to address North Dakota's childcare challenges, working in conjunction with the Working Parents Child Care Relief Program to support families across different income levels.

How it Works

Eligible families apply through an online portal or their local Human Service Zone office
Families choose any participating childcare provider that best fits their needs
The program pays providers directly, with families paying a portion of costs through co-payments based on their income
Families remain eligible for 18 months before needing to renew, providing stable support

The program encourages parent choice by allowing families to select from a wide range of providers – including centers, homes, and providers who match their cultural preferences, schedules, and children's needs.

Key Features

Parent Choice: Families can choose from nearly all licensed providers across the state (97% participation rate), allowing parents to find care that matches their values, schedules, and children's needs
Extended Support: 18-month eligibility period gives families uninterrupted assistance, reducing paperwork and ensuring stable childcare arrangements
Higher Payments for Infant/Toddler Care: 30% bonus payments above standard rates for providers caring for infants and toddlers help address the higher cost and limited availability of care for the youngest children
Reduced Family Costs: Eliminated co-payments for families below 30% of state median income and reduced co-payments for most other families
Quality Incentives: Additional payments of 5-15% for quality-rated providers encourage higher standards of care
Childcare Worker Benefit: Complete waiver of co-payments for childcare workers who work at least 25 hours weekly, helping retain qualified staff in the childcare sector

Policy Levers

Funding Investments: Recent legislation allocated $42 million, including $22 million to serve more families, $15 million for infant and toddler care incentives, $3 million for quality provider bonuses, and $2.3 million to eliminate co-pays for the lowest-income families
Application Flexibility: Extended application timeframes (30 days, and 90 days for families experiencing homelessness) make it easier for families to complete the process
Income Guidelines: Recently adjusted to 75% of state median income for new applicants while maintaining 85% for existing participants
Job Search Support: Four months of childcare assistance while parents search for work or educational opportunities
Direct Provider Payments: Changed from family to provider payments, ensuring more reliable income for childcare businesses

Results

The North Dakota Child Care Assistance Program has shown significant progress through its recent enhancements:

Expanded Reach: Currently serves 5,028 children monthly, with plans to increase to 6,460 children by the end of the 2023-2025 period
Provider Participation: 1,275 licensed providers (97% of all licensed providers in the state) participate in the program, giving families broad choice
Improved Affordability: Eliminated co-payments for the lowest-income families and reduced co-payments for most others
Enhanced Provider Support: Increased payment rates and 30% bonus payments for infant and toddler care help sustain childcare businesses