Governor Walz announced that increased payment rates for child care assistance take effect this week, as Minnesota continues to move toward making child care accessible to more families.
“Affordable and accessible child care is essential to creating opportunity and economic growth across the state,” said Governor Walz. “We’re raising child care assistance rates to support providers and improve access for more families. This is an investment in our workforce, economy, and the well-being of families.”
Higher reimbursement rates will bring state payments closer to market rates for childcare providers serving over 11,000 families, including 23,000 children, through the Child Care Assistance Program. The increase will help stabilize providers’ finances and improve access to affordable child care for families.
Governor Walz and the Legislature approved the new childcare assistance rates earlier this year, including $146 million in funding over the next two years. The change was part of a $1.3 billion child care package that also included payments to improve compensation for childcare providers and funding to reduce wait lists for another type of child care assistance known as Basic Sliding Fee.
“Families should be able to get child care when they need it,” said Human Services Commissioner Jodi Harpstead. “It’s so important to their well-being and to our entire economy. The new child care assistance rates will help providers cover basic expenses that allow them to offer quality care.”
The Child Care Assistance Program provides financial assistance for child care to families with low incomes. When rates are low, childcare providers are less likely to serve families in the program, and access to childcare suffers in an already tight market. Low rates also make it harder for providers who participate in the program to cover their costs.
The program’s rates are based on a grid that includes the county, the type of child care, and the child’s age group. When the rate increase takes effect, maximum rates in the grid will increase to match the 75th percentile of market rates, as measured by a 2021 survey of childcare rates. The state will adjust the rates every three years to reflect market rates, beginning in January 2025.
