TWC Approves Additional $81.5 Million To Extend Child Care Enhanced Reimbursements

AUSTIN – The Texas Workforce Commission (TWC) authorized an additional $81.5 million in federal CARES Act funding to extend the 25 percent enhanced reimbursement rate for child care providers in Texas through July 2021.

The enhanced reimbursement rate is a temporary measure to help subsidized child care providers address the higher operating costs as a result of the COVID-19 pandemic.

“High-quality child care plays an essential role in maintaining a strong Texas workforce,” said TWC Chairman Bryan Daniel. “These enhanced reimbursement rates help us ensure child care providers will be able continue to provide essential services for the children of working families.”

Previously, the Commission had approved $154 million to support the enhanced reimbursement rate, beginning in April and scheduled to continue through the end of the year.  

While the program was scheduled to end in December, child care providers continue to experience lower overall enrollment numbers and reduced tuition collection, while also maintaining fixed operational and administrative costs.

“So many times, child care is the difference between a parent working or leaving the workforce,” said Commissioner Representing Labor Julian Alvarez. “As jobs and opportunities open up, we want to help Texans take advantage of those opportunities by eliminating roadblocks to returning to the workforce.”

The commission approved a continuation of the funding, but with a stair-stepped phase-out.

The full 25 percent reimbursement will be provided for the months of January, February and March, then the percentage will decrease by five percent each month from April through the end of July.

The total cost for the program is estimated at $81 million. The funds come from a $371 million federal Child Care Development Block Grant (CCDBG) to help Texas respond to COVID-19 impacts on child care.  

“Extending these reimbursements gives Texans and our Texas employers predictability in these uncertain times,” said Commissioner Representing Employers Aaron Demerson. “It is vital to the Texas economy that we continue to assist our child care facilities as they are a major puzzle piece that makes Texas’ workforce the strongest in the nation.”