A new brief from the Department of Early Education and Care (EEC) provides insight on the state’s Child Care Financial Assistance (CCFA) program.

CCFA provides low or no-cost child care to families who are eligible based on their income or because they are involved with the Department of Children and Families (DCF) or the Department of Transitional Assistance (DTA). 

CCFA draws on both state and federal funds to serve nearly 66,000 families with incomes at or below 50 percent of the state median income (SMI) and those who are involved with DCF and DTA. As families’ incomes increase, they can remain eligible up to an income level that’s 85 percent of SMI. 

Financial assistance through CCFA can be used to access a range of child care options, including early education and care programs as well as after-school or out-of-school time care for children up to age 13.

Access to income-eligible CCFA support is subject to state and federal appropriations. When there isn’t sufficient funding to serve all eligible families, Massachusetts maintains a statewide waitlist. However, families who are eligible through DTA or DCF receive the benefit as an entitlement and are not placed on the waitlist. 

The EEC brief looks at the CCFA program’s impact across the state and finds both good news and opportunities for growth. 

A key victory for Massachusetts is expanded access over the past three years: both more families and more child care programs are participating in CCFA. 

However, the 65,961 children receiving CCFA support (as of May 2025) represents just 19 percent of all eligible children with incomes at or below 50 percent of SMI and 31,151 children are currently on the statewide waitlist.

While CCFA enrollment has significantly increased over the past three years, EEC has maximized its use of existing resources for income-eligible care, which limits the number of new income-eligible families able to gain access to CCFA since April 2024. Most of CCFA’s recent growth reflects increases in DCF and DTA caseloads, as these families receive the benefit as an entitlement and are not subject to the waitlist.

The current constraint on income eligible care also has implications for the Commonwealth Cares for Children (C3) operational grant. The C3 grant formula to determine funding amounts also includes an equity adjustment, with one of the factors being based on CCFA enrollment.

Tier 1, or the highest equity adjustment, includes programs that serve 25 percent or more children receiving CCFA, who are a Head Start program, or in a very low opportunity area (as determined by the Child Opportunity Index). Tier 2 (slightly lower adjustment than tier 1) includes programs who serve 1 to 24 percent of children receiving CCFA, programs serving at least 25 percent of children receiving non-CCFA scholarships that cover at least 50 percent of tuition, and are not in a low opportunity area. Starting in November, programs receiving C3 funds must attest or demonstrate willingness to accept children with CCFA when space is available. Even though the updated policy is meant to incentivize participation in the system, programs are unable to enroll new income-eligible children due to insufficient funding for child care financial assistance. This means that many programs may be unable to receive higher equity adjustments (based on percentage of CCFA children served) or greater C3 grant amounts come November when they reapply. 

Released last year, a report from the Massachusetts Taxpayers Foundation notes that while funding increases to CCFA are important, these increases are focused on financing rate increases for providers. To achieve the goal of expanding system capacity, EEC “needs intentional and targeted funding” that “would more directly connect funding to enrollment increases going forward.”

Additionally, while increasing the reimbursement rates is beneficial to program operations by increasing the amount a provider receives per child and incentivizing new and existing programs to participate in CCFA to a greater extent, it does not directly translate to expanded access. According to the Massachusetts Taxpayers Foundation, “When reimbursement rates are increased, they must be annualized and built into the base budget for CCFA next year. This impacts other funding decisions in the budget for CCFA, like funding to expand access.” 

For example, the FY’26 funding levels and rate increase of $20 million will not reopen access for income eligible child care financial assistance this fiscal year.

Despite challenges with the waitlist, Massachusetts passed a number of child care reforms through the FY’25 state budget that have led to significant progress in the implementation of CCFA, such as:

• CCFA will not be counted as income in determining eligibility for other state assistance programs, helping ensure families are not unintentionally disqualified from essential support services.

• Updating regulations to ensure that early education and care providers have priority access to CCFA in addition to other specific populations.

• Determining CCFA reimbursements rates for child care programs based on the cost of care. Using this model, EEC has implemented rate increases in both FY’24 and FY’25, with FY’26 rate increases forthcoming.

• Increasing the potential capacity of CCFA through expanding program eligibility rules to include families earning up to 85 percent of the SMI—effective January 1, 2026—with the goal of eventually serving families earning 125 percent of SMI.

This growth, however, does come with growing pains. As Harvard Kennedy School Professor Jeffrey Liebman points out in a recent report, increasing CCFA eligibility to include families with incomes up to 85 percent of SMI at the initial application phase, while continuing to prioritize families with incomes below 50 percent of SMI, will also increase the number of families who are on waitlists for subsidized child care, if funding is not being increased in proportion to the expansion in eligibility.

In order to enable thousands of families who currently lack child care to both afford it and access it, Jeffrey Liebman recommends “…adding 5000 new childcare slots a year in the state for the next four years so that the fraction of children enrolled in formal care rises from 52 percent to 57 percent.” However, reaching this ambitious target will require sufficient funding to CCFA to enable the increase in new slots, about $80 million per year at current rates.

EEC is committed to making more progress on CCFA, as officials explained at the September Board meeting. This includes outcomes such as modernizing CCFA’s information technology and implementing a new Family Advisory Council.

To learn more, check out the data brief as well as the related materials.