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The Childcare Management Blog

COVID-19 Relief for Childcare: What You Need to Know

Posted by EZChildTrack Team on Jan 21, 2021 4:30:00 PM

covid-19 relief for childcare

After months of waiting, the US Congress is finally moving on additional pandemic relief for small businesses, including childcare. $10 billion in Child Care Development Block Grant Funds (CCDBG) has been approved to reduce family copays and tuition plus other childcare provider expenses related to COVID-19 restrictions.

The Need for Funding

States can maximize the impact of funds in several ways:

  • Initiate or continue policies that help parents
  • Encourage fund usage for supporting and stabilizing the childcare workforce
  • Work with providers in communities where the need is greatest
  • Simplify and streamline the application process for grants and other resources

This funding is crucial, as childcare providers and parents alike are facing several challenges:

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What You Need to Know About the CCDBG

A majority of the $10 billion package is slated for essential childcare services, including $250 million for the Head Start program for infants, toddlers, and preschoolers from low-income families.

Who Qualifies?

A childcare center may be eligible for funding whether they serve children receiving subsidiaries or not. Funding goes directly to state-funded subsidiary programs and grants.

In most states, children continue to receive subsidies covering full tuition.

How to Claim the Benefit

Individual states distribute CCDBG funding. Contact your local CCR&R agency to help you find and apply for these and other grants. Consider connecting certain family clients with financial assistance resources, too.

All About the Paycheck Protection Program Loans

The second round of PPP loans is also part of the package. It encourages lenders to provide loans to assist small businesses with payroll, supply worker benefits, and make payments towards utilities, rent, mortgage, and other expenses.

The package provides $284 billion through the US Small Business Administration for first and second-time PPP loans to small businesses, explicitly calling out childcare providers. You can receive a loan up to 2 1/2 times your average monthly payroll costs in the year before the loan.

Loan forgiveness is available if at least 60% of the loan is spent on payroll. As much as 40% can be used to rent, mortgage interest, operational expenditures, and more.

Who Qualifies?

If you have not received a previous PPP loan and have fewer than 500 or fewer employees, you are eligible to apply.

Suppose you have received a previous PPP loan, have fewer than 300 or fewer employees, and have not fully used the first loan amount. In that case, you are eligible if you can show a gross revenue decline of 25% or more in any quarter of last year compared to the same quarter in 2019.

How to Claim the Benefit

The second round of loans started on January 11, 2021 and closes on March 31, 2021. Visit the US Small Business Administration loan program website to find prospective lenders. 

Apply early! The demand is high. If you applied for loans before, keep your documentation files handy to save time on the next loan application.

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What You Need to Know About the Second Round of Stimulus Checks and Unemployment Relief

Every adult earning up to $75,000, and each dependent child receives $600 in stimulus money. Direct deposits began January 4, with paper checks going out the week of January 11. 

The relief package adds $300 to weekly unemployment benefits through the middle of March. It provides self-employed and contract workers with jobless checks. Also, it enhances the child tax credit to help families facing unemployment or reduced wages due to the pandemic.

Who Qualifies?

All adults earning less than $75,000 a year and dependent children receive a direct payment. Those who earn between $75,000 and $99,000 get reduced payments.

Married couples earning up to $150,000 receive $1,200 with reduced payments for earnings between $150,000 and $174,000.

Everyone eligible for unemployment qualifies for the added $300 per week, plus those receiving state benefits and checks from the Pandemic Unemployment Assistance program qualify for the extension until March 14, 2021.

How to Claim the Benefit

Use a stimulus check calculator to determine how much you may receive and encourage your clients to do so as well. There are no stipulations for spending the money, but many families are likely to use it to pay for childcare. 

If you have families that are considering pulling their children from your childcare arrangement due to inadequate unemployment benefits, help them find and understand the new benefits to help you both.

Conclusion

The COVID-19 pandemic has created a childcare crisis in the US, but it isn't the only problem. Demand for childcare has outpaced capacity and growth throughout the past few decades. 

Families need quality childcare to continue working, but quality childcare can be scarce and expensive, stretching the budget to its limits for many. Providers choose between profit and charging affordable rates to attract business. The average cost of childcare in the US is nearly $10,000 a year, which can eat up much of a family’s income.

New grant money from the CCDBG package is a welcome resource for families and providers. Help your clients find their way to relief, and both you and the children you care for benefit.

reopening during covid19

Topics: Billing and Finances, Childcare Management

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