Aug. 3, 2004

Treatment of Certain Attendant Care Payments and Certain Child Care Payments

This memo provides additional guidance about how to treat certain attendant care payments and certain child care payments.

In 2000, we reconsidered policy regarding attendant care payments. Under the revised policy, attendant care payments provided by an outside source is to be treated as earned income to the person providing the attendant care if the person is a household member.
At that time, we said this policy does not apply to household members that pay other household members for services such as child care. The policy only applies to reimbursements for expenses provided by an outside source to a household member when service is performed by another household member.

Recently, we were asked how this policy would affect reimbursement for child care by an outside source. The concern centered on the statement “…this policy does not apply to household members that pay other household members for services such as child care…”

Many States are providing child care vouchers to low-income working households. These vouchers are funded through a block grant from the Child Care and Development Fund (CCDF), a State and Federal partnership administered by the Child Care Bureau, an agency of Administration for Children and Families. Parents can use their CCDF grants to choose from a wide spectrum of child care providers, from child care centers to relative caregivers.

The example cited during the discussion concerned a relative caregiver situation. There is a 3 person food stamp household - mother and child and the child’s grandmother. The mother works. She receives a child care reimbursement from a State’s CCDF. The grandmother watches the child and the mother pays her with the CCDF child care reimbursement. Is the money paid to the grandmother counted as earned income as it would be if she were providing attendant care to a disabled household member? 

The money is counted as earned income. Counting such outside child care payments as earned income will keep food stamp child care policy consistent with attendant care policy. This policy only applies to situations where the household receives child care funding from an outside agency, such as the CCDF. This policy does not apply in situations where a household member pays another household member from his/her own pocket. Such child care payments are not counted as earned income because the money is moving between household members.

Please notify your States about the revised policy. If you have further questions, please contact Patricia Maggi at (703) 305-2468.

/S/ Arthur Foley 

Arthur T. Foley
Director
Program Development Division

cc: Fran Heil, QCB, PAD
     John Knaus, PDB, PDD
     David Young, National Arbitrator

Last modified: 11/21/2008