UNITED STATES

OFFICE OF PERSONNEL MANAGEMENT

GUIDE FOR

IMPLEMENTING

CHILD CARE LEGISLATION

UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

Working for

America
Table of Contents 

• Public Law 107-67, Section 630

• Use of the Guide

• Benefits to the Agencies

• Implementation Process

• Marketing the Program to Your 

Employees

• Information for Interested Employees

• Information for Child Care Providers 

and Governing Boards

• Information Related to Child Care 

Subsidy Program Overseas

• Administration of the Child Care 

Subsidy program

• Payments

• Advance Payments

• Notification to Congress

• Agency Oversight

• "Lower Income Federal Employee" 

Determination 

• Tax Implications

• Child Care Subsidy Models

• Comparison of the Models 

Appendices

• Appendix A: Sample Marketing Flyer

• Appendix B: Sample Child Care Subsidy 

Program Description

• Appendix C: Child Care Subsidy Program 

Application Form - OPM Form 1643

• Appendix D: Sample Child Care Subsidy 

Program Award Letter for Parents

• Appendix E: Sample Child Care Subsidy 

Program Agreement

• Appendix F: Child Care Provider Information 

Form-OPM Form 1644

• Appendix G: OPM Reporting Form - OPM 

Form 1645

• Appendix H: Sample Statement of Work for 

Administering Program

• Appendix I: Sample Agency DCAP Plan 
Affordable Child Care for Lower Income Federal Employees

AGENCY USE OF APPROPRIATED FUNDS FOR CHILD CARE COSTS FOR 

LOWER INCOME EMPLOYEES

Sec. 630. 

(a) IN GENERAL. - Hereafter, in accordance with regulations promulgated by the 

Office of Personnel Management, an Executive agency which provides or proposes to 

provide child care services for Federal employees may use appropriated funds (otherwise 

available to such agency for salaries and expenses) to provide child care, in a Federal or 

leased facility, or through contract, for civilian employees of such agency. 

(b) AFFORDABILITY. - Amounts so provided with respect to any such facility or 

contractor shall be applied to improve the affordability of child care for lower income 

Federal employees using or seeking to use the child care services offered by such facility 

or contractor. 

(c) ADVANCES. - Notwithstanding 31 U.S.C. 3324, amounts paid to licensed or 

regulated child care providers may be in advance of services rendered, covering agreed 

upon periods, as appropriate. 

(d) REGULATIONS. - The Office of Personnel Management shall, within 180 days 

after the date of enactment of this Act, issue regulations necessary to carry out this 

section. 

(e) DEFINITION. - For purposes of this section, the term “Executive agency” has the 

meaning given such term by section 105 of title 5, United States Code, but does not 

include the General Accounting Office. 

(f) NOTIFICATION. - None of the funds made available in this or any other Act may 

be used to implement the provisions of this section absent advance notification to the 

Committees on Appropriations. 
Use of the Guide 

Purpose of the Guide: 

The purpose of this Guide is to provide Federal agencies, Federal employees, child care 

providers, and child care governing boards with useful information related to the child 

care legislation that permits agencies to spend appropriated funds (including revolving 

funds available for salaries and expenses) to assist their lower income employees with the 

costs of child care. 

How to Use the Guide: 

The information contained in this guide is a supplement to the child care regulation, 

published in March, 2003. (5 CFR Part 792). The guide focuses on procedural matters 

related to the law. The information in the guide can be used as is or can be changed to 

suit the needs of each agency. The agency form for reporting annual child care subsidy 

results to OPM, Form 1645, is mandatory and cannot be altered. 

This legislation is permanent. The materials and information in this guide are intended to 

assist agencies in expediting the process of distributing funds for child care costs of lower 

income Federal employees. 

The law and regulations allow maximum flexibility in interpreting the definition of 

“lower income Federal employee” provided the intent of the law specifying “lower 

income” is respected. The guide contains various models for child care subsidy programs 

that can help agencies decide on a model that suits their needs. An agency may choose to 

use one of the models or create their own program criteria. 

Which agencies have this authority? 

Executive agencies, with the exception of the General Accountability Office (GAO), 

have this authority. The authority includes the Department of Defense. Agencies may use 

any appropriated funds, including revolving funds that are ordinarily used for salaries and 

expenses for this purpose. 

For how long is this authority in effect? 

The law is permanent and was enacted on November 12, 2001. 
Benefits to the Agencies 

What are the benefits to the agencies? 

By helping Federal employees with their child care costs, 

• Agencies can improve recruitment and retention---they can recruit more skilled employees 

and they can retain valuable employees; 

• Agencies can save costly training expenses for new employees and save on lost productivity 

due to the need to replace employees; 

• Agencies can improve human capital practices; 

• Employees who previously could not afford licensed or regulated child care may be able to 

do so as a result of this authority; 

• They should feel more comfortable with their new child care arrangements and have fewer 

distractions at work; 

• Agencies are supporting good job performance and good attendance; 

• Agencies that have on-site child care centers with vacancies can use this authority to help 

fill the vacancies at their own centers; and 

• Agencies can contribute to improved employee morale. 
Implementation Process 

How should agencies proceed? 

Agencies should determine the amount of funds they are willing to allocate for this 

purpose. They must annually notify their Congressional committees and OPM of their 

intent to spend funds from their salaries and expense accounts for this purpose each year. 

Agencies must report to OPM annually, on OPM Form 1645 [83 KB], disclosing 

program costs and numbers. Agencies need to decide on how their programs will be 

structured and how they will be administered. The following questions should be helpful 

to agencies in establishing their programs: 

1. Does your agency need to bargain with your unions? If so, this process should begin as 

soon as possible. 

2. Will your agency put a ceiling on the funds your agency makes available for this purpose? 

If so, are the funds on a first-come, first-served basis? 

3. Will your agency restrict the use of these funds to certain employees, e.g., full-time or 

permanent employees? 

4. How will your agency ensure that its program is marketed effectively to its employees? 

5. Has your agency considered whether to use a contractor as the most effective means of 

administering this program? 

6. Does your agency need to issue a statement of work in order to obtain the services of a 

contractor who will administer the program? 

7. Who at your agency will provide oversight of the program and be responsible for annually 

reporting the results to OPM? 

8. Which subsidy model or formula will your agency use to determine the amount of subsidy 

an employee will receive? 

9. Is the child care provider state licensed and/or regulated? (The agency may not restrict 

the use of funds to apply to accredited child care providers only. See 5 CFR 792.220) 
Marketing the Program to Your Employees 

What are some ideas for marketing the child care subsidy program to 

employees? 

• Place announcements on pay slips. Example: “Interested in financial assistance with your 

child care costs? If you qualify, your agency can help you with licensed and/or regulated 

family child care costs or center-based child care costs. If you qualify, call...” (insert the 

name and phone number of the administrator of your program) for more information. 

• Post flyers and posters in your agency. Example: “Child Care is Costly—you may be able to 

receive financial help with your child care costs for licensed and/or regulated centerbased child care or family child care providers. Call ... for more information.” 

• Use electronic bulletin boards and/or the agency intranet. Example: “Your agency may be 

able to help you with your child care costs. Public Law 107-67, sec. 630, permits Federal 

agencies to provide financial assistance to lower income Federal employees for child care 

in licensed and/or regulated center-based or family child care homes. If you believe you 

might qualify for such assistance, please call or email... to learn more about our 

program.” 

• Use agency-wide email and closed circuit television services. 

• Let employees who use your on-site child care center know about this legislation. Send 

fliers home with parents of children enrolled in your child care center. Give prospective 

parents written information about the child care subsidy program. 

• Set up an information telephone line that has a recorded message about the program. 

Include information about who should be contacted if an employee is interested in 

application materials. 

• If your agency plans to make the program a first-come, first-served program or set a 

deadline for applying for the subsidy, make that point clear in the marketing materials 

and periodically send out reminders. 

• Make it absolutely clear to your employees that this program is not an entitlement program 

and only applies to licensed and/or regulated child care. 

See Appendix A: Sample Marketing Flyer
Information for Interested Employees 

What should the Federal employee interested in this program do to obtain 

information and apply for assistance? 

Federal employees interested in participating in this program should contact the 

individual or organization named on their agency’s announcements to get more 

information about the subsidy program. Employees should also obtain a copy of the final 

regulations and applicable tax issue information via the agency’s dependent care 

assistance plan (DCAP) (Appendix I). After reviewing the available materials, if 

employees are still interested and their child is not yet enrolled in child care, employees 

should identify a licensed and/or regulated child care provider of either center-based or 

family child care, and assure there is a space for their child before applying for the 

subsidy. 

If Federal employees already have their child(ren) enrolled in licensed and/or regulated 

child care (center-based or family child care), and they wish to receive the subsidy, they 

should fill out the child care subsidy program application forms, submit them to the 

person or organization named on the agency’s form, and wait for a decision. Once they 

receive the decision, they must sign the agreement form and return it to the organization 

administering the program. See Appendices B, C, D and E for sample forms. 

Employees interested in participating will be required to apply for the child subsidy 

program on an annual basis. 

How can Federal employees obtain a copy of the regulations and identify 

child care services that are licensed and/or regulated? 

Information about identifying child care services is included in OPM’s publication, Child 

Care Resources Handbook. 

Employees may also wish to contact their local and/or State agencies that regulate centerbased child care or family child care facilities. 

The regulations are also available at 

http://a257.g.akamaitech.net/7/257/2422/14mar20010800/

edocket.access.gpo.gov/2004/pdf/04-3953.pdf . 

What is involved in obtaining a child care subsidy? 

Employees must submit an application form and be prepared to provide copies of their 

recent pay stubs and/or latest IRS tax submissions. If a family receives local and/or State 

child care subsidies, they must indicate the source and the amount on their application. 

Generally, those amounts are deducted from the subsidy award. 
Information for Child Care Providers 

and Child Care Governing Boards 

How can family child care home providers and center-based child care 

providers participate in the program? 

• They can let Federal families currently enrolled in their child care facility know about this 

program. 

• They can contact Federal employees who were interested in their child care program and let 

them know about the program. 

• They can contact agency representatives and let them know whether or not there are 

spaces available for additional children. 

• They can make fliers and written information about the child care program available to the 

Federal community. 

• They can let families know how to apply for the subsidy. 

• Federal child care centers can advertise the program to their parents and prospective 

parents and let the agencies know when they have available spaces in their programs. 

They can work with the agency Human Resources departments to advertise the program 

to employees. 

How can child care governing boards at Federally sponsored child care 

centers participate in this program? 

• They should market the program in ways similar to those mentioned above. 

• They should provide information (a flier or brochure) to the child care center provider for 

dissemination to families. 

• If the governing board is going to administer the program for the agency’s Federallysponsored child care center, it should provide parents with information about how they 

can apply for the subsidy. 

Are there any special restrictions for governing board members who are 

Federal employees related to administering these programs? 

Federal employees are prohibited by 18 U.S.C. § 205 from engaging in certain 

representational activities before the Government. An exception in this law allows 

employees to represent a non-profit organization, if a majority of the organization’s 

members are current Federal employees or the spouses or dependent children of Federal 

employees. The representation permitted must be without compensation, must be 

consistent with the faithful performance of the employee’s official duties, and must not 

be for the purpose of seeking Federal funds for the organization. This means, for 

example, that an employee who is on a child care center’s board may not contact an 

agency on behalf of the center to seek subsidy funds for the center. Such a contact would 

have to be made by a person who is not a Federal employee. 

A Federal employee is prohibited by 18 U.S.C. § 208 from participating personally and 

substantially in an official capacity in particular matters in which an organization he or 

she serves as director or trustee has a financial interest. This means, for example, that an 

employee who is on a child care center’s board may not be involved in his/her agency’s 

decision of whether to provide a subsidy for children at the center. 

See Appendix F: Child Care Provider Information Form - OPM Reporting Form 1644
Information Related to Child Care Programs Overseas 

In the case of an overseas location, how can an agency ensure a child care 

center or family child care home is safe and appropriate for children in its 

care whose parents have applied for the child care subsidy? 

Since child care licensing or its equivalent is not a requirement in all foreign countries, 

agencies can use a number of alternatives for ensuring the child care program where their 

employee subsidy recipients enroll their children is safe and appropriate. The following 

list is not all inclusive. Agencies may devise other strategies for this purpose: 

1. Centers located near military installations: Agencies may choose to request that a child 

care specialist at a local military installation do an on-site evaluation of the child care 

center or family child care home using the same evaluation instruments that are used for 

military child care. 

2. Local licensing: Some foreign countries and localities have their own set of regulations for 

child care. If a locality requires that child care be regulated, the agency can accept local 

licensure or proxy for licensure if appropriate. 

3. Contract for services: Private organizations with international networks conduct 

evaluation visits on a contractual basis. 
Administration of the Child Care Subsidy Program 

Federal agencies have a number of options for administering the program. Regardless of 

which option they choose, administration includes the following activities: 

• Marketing the program to their employees; 

• Making available subsidy application forms; 

• Making subsidy determinations; 

• Notifying employees of the determination decisions; 

• Notifying employees of the agency’s dependent care assistance plan (DCAP); 

• Assuring that all of the agreement documents are signed by the parents/guardians; 

• Assuring that the employees are using licensed and/or regulated child care, whether centerbased care or family child care; and 

• Documenting and submitting the required reports to OPM. See Appendix G: OPM Reporting 

Form 

Agencies can choose to administer the program themselves or contract with an 

organization that provides subsidy services. Typically, contractors charge a percentage of 

the disbursements as their fee for services. Agencies should work with their acquisition 

offices to determine the appropriate contracting method for establishing an agreement to 

contract with an appropriate organization. A sample Statement of Work is provided in the 

Appendix H of this document that may be helpful for agencies that choose to contract for 

services. Most agencies have chosen to contract for these services. 
Payments 

Who is paid the child care subsidy? 

The regulation requires that agencies pay the child care provider the child care subsidy 

for Federal employees who qualify for the program. Child care providers should invoice 

the agency or the organization that has responsibility for administering the child care 

subsidy program. In overseas situations where child care costs are paid in foreign 

currency, the agency may choose to pay the employee the subsidy. There may be other 

rare situations in which an agency feels it is prudent to pay the employee the subsidy. 

This is permissible if the agency first obtains permission from OPM. Agencies are 

cautioned, however, that they will be responsible for verifying the child’s attendance in 

the child care arrangement named in the employee’s application during the period 

covered by the subsidy award. 

Advance Payments 

May agencies make advance payments to child care providers? 

An agency may choose to make advance payments to the child care provider in certain 

situations. Advance payments may be paid to the child care provider when the provider 

requires child care payments one month in advance of rendering services. Advance 

payments may not be made for more than one month in advance of receiving child care 

services. 

May agencies continue to make payments for employees called to active 

duty with the National Guard or Reserves? 

Yes, the legislation permits the agency to continue payments. Moreover, OPM 

encourages agencies to continue child care subsidies for eligible full-time employees who 

are called up to active duty during times of national emergency as members of the 

National Guard or Reserves. 
Notification to Congress 

Who must be notified when an agency decides to implement the child care 

subsidy program? 

An agency must notify its Congressional Appropriations sub-committee of its intent to 

implement a child care subsidy program. It must also notify OPM. Notifications must 

occur annually. 

The following is a sample notification to Congress: 

Dear Chairman/Representative/Senator... 

The (Federal agency) has decided to use the authority provided by Section 630 of Public 

Law 107-67 to spend appropriated funds to assist our lower income employees with child 

care expenses. As required by the conference report accompanying Public Law 107-67, 

we hereby notify the Subcommittee that (Federal agency) will obligate $x for this 

purpose. 
Agency Oversight of the Child Care Subsidy Program 

What information should an agency collect for its annual report to OPM? 

The required reporting form for OPM can be found at Appendix G of this guide. Below is 

a summary of the information the agencies should collect on a fiscal year basis: 

• Total amount of funds disbursed; 

• The highest weekly amount awarded; 

• The lowest weekly amount awarded; 

• The average weekly amount awarded; 

• Number of employees who received child care subsidy; 

• Number of employees who received child care subsidy by grade level; 

• Number of children who benefited from child care subsidy; 

• Types of child care used and the total number of centers; 

• Description of how “lower income employee” was defined; 

• Statement of whether the agency placed restrictions on the use of the funds. Please note, 

agencies may not restrict the child care subsidy program to only accredited child care 

providers; 

• Information on how the subsidy program was administered. 

Regardless of who administers the program, the decision about which model to use for 

determining eligibility and the amount of the subsidy is the responsibility of the agency.

Regardless of who administers the program, the confidentiality of this information 

must be guaranteed.
"Lower Income Federal Employee" Determination 

How should agencies determine whether a Federal employee qualifies as a 

"lower income Federal employee" for the purposes of this legislation? 

Each agency has the discretion to determine who qualifies as a “lower income Federal 

employee” in a way that makes sense for its agency. Agencies may choose a particular 

definition for one location or mission and a different definition at another location or 

mission. 

There are several methods for determining eligibility under this law. This guide provides 

agencies with a variety of suggested models. Keep in mind that the regulations allow 

for maximum flexibility but the intent of the law specifying “lower income” must be 

respected. The intention is to allow agencies to determine what works best for them. 

All of the suggested models in this document are based on the assumptions that: 

1. A Federal employee’s eligibility for this program considers total family income (TFI). 

TFI is the combined income of both of the child’s parents/guardians and is listed on their 

IRS tax forms as their Adjusted Gross Income; and 

2. The amount of subsidy will be reduced by any current State and/or local subsidy the 

parents/guardians currently receive; and 

3. Employees must have submitted their earnings statements, verification of employment, 

and latest IRS 1040 or other relevant IRS tax forms to the administrators of the program 

for the purpose of verifying income. 

Choosing an eligibility model involves: 

1. Deciding whether to set a total family income (TFI) threshold amount, which establishes 

the highest amount of total family income that can be earned in a given year in order for 

a Federal employee to be eligible for the program. Obviously, setting that amount at a 

level that is very high or very low will greatly affect the population of employees who can 

benefit from this law. With some models, a threshold amount need not be set since the 

formula automatically disqualifies some employees because of the relationship between 

their TFI and their actual, expected child care costs. 

2. Determining what amount of subsidy the agency will provide to a Federal employee. As 

you will see from the different models presented, the approach can vary from prescribing 

a set amount of subsidy, using a sliding scale model, to prescribing a sum that is based 

on a percentage of TFI or a percentage of child care costs. You should also decide 

whether your formula addresses all child care costs for a given family or whether 

assistance will be made on a per child basis. One model is based on the cost of care for 

each child on an individual basis, while the others are based on the total child care costs 

a family pays. 

These decisions will have an impact, sometimes dramatic, on the amount of subsidy your 

employees will receive. 

Not knowing the amount of spousal income a family has can make it difficult initially to 

predict how many employees will be eligible and, of those, how many will actually apply 

for subsidy. Most agencies have reported, thus far, that they initially overestimated both 

the number of eligible employees and the amount of funds the agencies would disburse. 
In several cases, agencies raised their TFI thresholds in order to provide assistance to a 

greater number of lower income employees. 

Step 1: Choose a model that makes sense for your agency. Four of the five models 

presented here have a set TFI threshold, the upper limit that defines eligibility.

If a threshold is set, families with TFI above a certain threshold would not be eligible for 

subsidy. Setting a threshold generally makes it easier to understand eligibility. Families 

with income at or below the TFI threshold amount would be eligible for subsidy. Choose 

a model that is easy for your employees to understand, while at the same time, 

accomplishing your goals for the program. 

Step 2: Decide on whether you want a model that factors in total child care costs.

Some models consider the total child care costs of the family in determining the amount 

of subsidy that will be awarded. 

Others simply provide a flat fee that employees with more than one child can apply to 

whichever child’s care they wish. If an agency decides it wishes to consider a family’s 

total child care costs, it is easier to take that approach rather than use a model that 

provides a certain amount of subsidy based on the number of children in care. 

Step 3: Determine the amount of subsidy employees can receive.

An important consideration is whether the model you choose results in an amount of 

subsidy that is adequate for an employee to use toward child care costs. For example, for 

lower income employees whose child care costs might be $6,000 annually, providing 

them with a reduction in child care costs of only $600 a year might not be adequate for 

them to utilize licensed child care. Some models provide the employee with a certain 

percentage of his or her child care costs (Model A) or expect the employee to pay a 

specified percent of TFI, with the agency paying the remainder (Model B and E). 

Agencies may wish to change the numerical factors in a given model to increase or 

decrease the amount of subsidy an employee might receive.

Note: Although the guide discusses subsidy an employee might receive, the actual 

disbursement is generally made directly to the child care provider, thereby reducing 

the child care costs for the employee. Refer to the discussion under “Payments” in this 

Guide. 
Tax Implications 

What are the tax implications of child care subsidies under this program? 

The child care subsidies are generally taxable as income to the employee who benefits 

from them (26 U.S.C. § 61 and 26 CFR § 1.61-1). Employees are encouraged to seek 

advice related to tax liability from their financial advisors. 

Are the subsidies eligible for any type of tax exemption? 

Yes, under certain conditions. The IRS has advised us that if an agency implements the 

child care subsidy program as a dependent care assistance program, described in section 

129 of the Internal Revenue Code (Code), amounts of up to either $2,500 or $5,000 may 

be excluded from gross income. 

To qualify for the exclusion, an employee must claim the child as a dependent on the 

employee’s Federal income tax return. A disabled child must meet the definition located 

in 26 CFR 1.44A-1(b)(4) to qualify for the exemption. 

Are agencies required to develop a Dependent Care Assistance Plan (DCAP)? 

OPM strongly recommends all agencies to develop a DCAP. To obtain further guidance 

on the tax implications of DCAP, agencies may call the IRS, Office of the Associate 

Chief Counsel (Employee Benefits and Exempt Organizations), at (202) 622-6080 or on 

the IRS website, http://www.IRS.gov. 

Where can agencies obtain more information about setting up the child care 

subsidy as a dependent care assistance program? 

The requirements of a DCAP are outlined in section 129 of the Code. There are also 

several reporting requirements that are imposed under this section. IRS Publication 503 

describes those requirements and can be found at http://www.irs.gov/pub/irspdf/p503.pdf . Agencies may obtain further guidance by calling the IRS, Office of the 

Associate Chief Counsel (Employee Benefits and Exempt Organizations), at (202) 622-

6080 or on the IRS website, http://www.IRS.gov. A sample DCAP is also included in this 

guide under Appendix I. 

How can employees ensure that they are calculating their exemptions 

correctly? 

Please refer to Publication 503 “Child and Dependent Care Expenses.” You should also 

consult your tax advisor to be sure that you calculated the child care credits and 

exemptions correctly. 
Subsidy Models 

Each model includes an example. The same family situation is used for each model for 

comparison purposes. 

Model A – Based on a variable percentage of a family’s total child care costs that the 

agency pays, linked to total family income. This is the most popular model currently 

being used by the agencies.

In this model, the agency establishes an upper limit or threshold for TFI eligibility. In this 

example, it is $60,000. This is an arbitrary amount used to illustrate how the subsidy 

calculations would be made. Agencies may choose to set higher or lower threshold 

amounts. 

The subsidy for all of the children in child care, including before and after school care, in 

a particular family is determined as a set percentage of the family’s total child care costs. 

The agency prorates the percentage amounts based on total family income (TFI). The 

lower the TFI, the greater is the subsidy provided by the agency. 

Total Family Income % of Total Child Care Costs Paid by the Agency 

60,001 and above 0 

45,001-60,000 30 

26,001-45,000 40 

26,000 and under 70 

Example: If a family’s TFI is $50,000 and its total annual cost of child care is $6,000, the 

agency will pay 30% ($2,000) and the family pays the rest ($4,000). 

Model B – Based on a specific percentage of total family income that the family is 

expected to pay for their total child care costs. The agency pays the remainder. The 

concept is similar to Model C.

According to this model, a family is eligible for a subsidy only when actual child care 

costs exceed the specified percentage set by the agency. The specified percentage is the 

same for all income brackets. No TFI threshold amount is set in this model. This model is 

particularly helpful to families that have extraordinary child care expenses such as 

families that have multiple births. 

Example: In this example, the agency sets 15% as the percentage of total family income 

the family is expected to pay for child care, regardless of their income level. Again, the 

percentage might be set higher or lower than 15%; 15% is used here to illustrate the 

effects of the model. 

If the family’s total family income is $50,000 and its annual costs of child care are 

$6,000, the family is expected to pay up to $7,500 (15% of TFI) for child care costs. 
Since its actual costs are $6,000, it would not receive subsidy because this is less than the 

amount it is expected to pay. However, if the same family had annual child care costs of 

child care are $9,000 (more typical for a family with more than one child), the family is 

still expected to pay $7,500. In this case, the agency pays $1,500. 

Model C – Based on a specific percentage of total family income that the family is 

expected to pay for their total child care costs. The agency pays the remainder.

This model sets a threshold amount of total family income. In this case, it is $50,000, 

meaning that no family earning over $50,000 a year is eligible for subsidy. The model 

uses a percentage of total child care costs the family is expected to pay and the agency 

pays the difference. This model is similar to Model B except that the percentage of total 

family income the family is expected to pay is based on a graduated scale. An agency 

interested in this model may wish to change the income bracket amounts and/or change 

the percentage amounts. 

Total Family Income % of TFI a Family is Expected to Pay for Child Care 

40,001-50,000 15 

25,001-40,000 10 

25,000 and under 5 

Example: If a family’s total family income is $50,000, it is expected to pay 15% of TFI 

or $7,500 for child care costs. Since their costs are $6,000, the agency does not provide 

subsidy. However, if the total child care costs are $9,000, the agency pays $1,500. 

Model D – Based on a low income eligibility threshold with a specified graduated 

amount the agency pays regardless of the family’s actual child care costs. This is a 

flat fee model.

The income eligibility TFI threshold is set at a specified total family income amount; in 

this case it is $50,000 to illustrate the effects of the model. Agencies may choose to set 

the threshold higher or lower. They may also wish to set the subsidy amount higher or 

lower than the example shown here. Only those families earning less than the threshold 

amount ($55,001) are eligible for a subsidy. The subsidy amount is on a sliding scale and 

determined by the family’s total family income bracket. This model does not take into 

consideration a family’s actual child care costs for all of the children in care in a family. 

If child care costs are less than the amount of subsidy for which the employee is eligible, 

the subsidy will be the cost of the child care. For example, if an employee’s family earns 

$50,000, and its annual child care costs are $3,000, the employee will be eligible to 

receive $2,000. If its costs are $7,000 per year, it will receive subsidy of $2,000. 

Total Family Income Subsidy Amount per Family 

Over 55,001 -0- 

40,001-55,000 2,000 
25,001-40,00 3,000 

25,000 and under 4,000 

Model E – Based on a child care cost sliding scale per child that is paid by the 

family. The agency pays the remainder.

This model specifies a sliding scale of child care rates a family is expected to pay per 

child and the agency pays the difference. Therefore, the amount the agency pays is 

calculated for each child in care. This chart is from the Military model. The Military 

model does not set a threshold amount. 

Category Total Family Income Range of Weekly Fees Per Child Paid by Employees

I 0 - 23,000 40-53 

II 23,001 - 34,000 50-64 

III 34,001 - 44,000 61-76 

IV 44,001 - 55,000 74-86 

V 55,001 - 69,999 88-100 

VI 70,000+ 103-114 

Example: If a family’s total family income is $50,000 and it has one child in care, the 

family will pay $4,160 a year (based on the midpoint fee of $80 per week). The weekly 

rates are considerably below the market rates for similar child care. 
Appendix A 

Sample Marketing Flyer 

Department X 

Child Care Subsidy Program 

P. L. 107-67, Sec. 630, permits Federal agencies to assist lower income Federal 

employees with child care costs through a subsidy program. 

If you meet the Department’s eligibility criteria, your child care costs might be 

REDUCED! 

The Child Care Subsidy Program applies to employees whose children are age 13 or 

under, or disabled through age 18, and are enrolled, or will be enrolled, in family child 

care homes or center-based child care. The child care provider must be licensed and/or 

regulated by State and/or local authorities. 

The deadline for applying for child care subsidy is __________. 

Call: (insert name, phone number and address of organization administering the program 

for the Department or insert name and phone number of the Department’s contact) or 

visit our website at: 
Appendix B 

Sample Child Care Subsidy Program Description 

General Information 

Public Law 107-67, Sec. 630, permits Federal agencies, at their discretion, to use 

appropriated funds normally available for salaries to assist their lower income employees 

with child care costs. Department X has chosen to establish this program for its lower 

income employees. 

The Department X Child Care Subsidy Program is operated on a first-come, first-served 

basis. Applications postmarked by (insert date) will be effective with the beginning date 

of the program. Applications received after (insert date) will be effective the Monday 

following the week of postmark. If all agency funds have been committed, new 

applications will be placed on a waiting list. 

Eligibility 

Department X has established the following formula for determining both eligibility and 

the amount of the child care subsidy: (insert model and give an example) 

Administration of the Program 

Department X has chosen (insert name of organization administering the program) to 

administer the Department’s Child Care Subsidy Program. The Organization will receive 

the child care subsidy applications, make the subsidy decisions, and notify the applicants 

and the child care provider of the decision. The subsidy will be paid to the child care 

provider by the organization administering the program unless special permission has 

been obtained from OPM to pay the employee directly due to unusual circumstances. 

How to Apply 

Complete the child care subsidy program application, have your child care provider 

complete the Child Care Provider Information Form and mail with all necessary 

attachments to: (insert name of organization and address). You will receive a letter of 

notification about the decision on your application. 

If you have questions about the program or your application, please call (insert name of 

organization administering the program and their phone number). 

All information is kept strictly confidential. Identification of the applicant is known 

only to the (insert name of organization). Once the subsidy award is made, only the 

amount of the subsidy award and name of the applicant are provided to the child care 

provider and to your employer for tax purposes only. 
Appendix C 

Employee Application Form - OPM Form 1643 

OPM Form 1643
Appendix D 

Sample Child Care Subsidy Award Letter for Parents 

Dear ___________________ 

We are pleased to inform you of our decision to award you $ __________ per week 

toward your child care costs at the (insert name and address of child care provider). The 

child care subsidy will be paid directly to your child care provider and your subsidy bill 

will be credited for this amount. 

The award will take effect beginning on (insert date) and will expire on (insert date) or 

when your child leaves the center, or when you leave your agency, whichever comes 

first. 

You must notify, in writing, (insert name of organization) if and when your child is no 

longer enrolled in the child care program you listed on your application. You must 

reapply for a child care subsidy should you change your child care arrangements. 

By accepting this subsidy, you assure that all information you presented in your 

application was accurate. Fraudulent statements will result in loss of the award and/or 

repayment of the amount of the award. To accept the award, please sign the attached 

agreement immediately and return it to (insert name and address of organization that 

administers the tuition assistance program). 

You will be required to submit a new tax return by April 15th each year. You will receive 

a new award letter effective May 1st based on the income on your tax return. 

If you have any questions about the child care subsidy program, or your award in 

particular, please do not hesitate to call (insert name and phone number). 

Sincerely, 
Appendix E 

Sample Child Care Subsidy Agreement 

Between Employee and Agency or Organization 

That Administers Funds 

From: (Names of parents or guardians) 

Address: 

To: (Organization that administers the child care subsidy program) 

Address: 

Subject: Child Care Subsidy Award Weekly Amount of $_________________ for (insert 

name of child) to attend the (insert name and address of child care program). 

I/We agree to accept the child care subsidy award of $_______________ per week. I/we 

understand that the award becomes effective (insert date) and remains in effect until 

(insert date) or the date when the child is no longer enrolled in the child care program 

named in this agreement, or the date I/we leave the agency, whichever occurs first. I/we 

agree to notify (name of Organization) if and when our child is no longer enrolled at 

(insert name of child care program). 

I/we agree to submit a new tax return by April 15th. I/we understand any changes to my 

award based on my/our tax return will be effective May 1st. 

I/we understand I/we will be billed by the (insert name of child care provider) for the 

prevailing child care rate. If the child care rate is increased during the award period, we 

understand the amount of the award may not change. 

Parent Signature: ____________________________ Date: _______________ 

Parent Signature: ____________________________ Date: _______________ 

To activate your award, return this form to: 

(Insert name and address of organization administering the program) 

Your child care subsidy will not become effective unless this form is returned to the 

organization named above. It verifies your child will be enrolled in the program you 

indicated on your application form and you agree to report the events listed above. 
Appendix F 

Child Care Provider Information Form - OPM Form 1644 

This form is optional. 

Agencies may develop their own form, if they wish. 

If agencies develop their own form, it will require OMB clearance.

OPM 1644 [198 KB]
Appendix G 

OPM Reporting Form – Form 1645 

Agencies are required to submit their Child Care Subsidy data on this form.

USE OPM FORM 1645 TO COMPLETE YOUR REPORT 

OPM 1645 [84 KB]
Appendix H 

Sample Statement of Work 

SAMPLE 

I. BACKGROUND 

The Agency is soliciting proposals from qualified organizations to administer the Agency’s 

child care subsidy program. Congress enacted Public Law 107-67, Sec. 630, on 

November 12, 2001. This legislation permits Federal agencies to administer a program to 

assist their lower income Federal employees with the costs of child care. The contractor 

will administer the program on behalf of the agency for the period from the date of award 

through the time this program expires or the agency chooses another administrator. 

Child care subsidy can reduce the amount of costs parents pay for child care by providing 

subsidies directly to the child care provider. To be eligible to participate, a child care 

provider must be a family child care home or child care center licensed and/or regulated 

by the State and, where applicable, local authorities (i.e. the provider must meet all 

requirements of its particular jurisdiction) where the service is provided. 

II. REQUIREMENTS OVERVIEW 

(Agency) requires a contractor to demonstrate it has the ability to effectively manage 

(Agency) child care subsidy program. In responding to this RFP each entity must submit 

a technical proposal that demonstrates its ability to perform the following services: 

A. Handle all administrative tasks associated with the child care subsidy program 

appropriately and efficiently. 

B. Help the (Agency) design publicity material and help design the agency's child care 

subsidy program applications. 

C. Maintain confidentiality of all the information contained in the child care subsidy 

program applications. 

D. Notify the parents and the child care provider of the amount of the subsidy that 

each family will receive and the effective dates. 

E. Determine the eligibility of child care providers to receive Federal funds (all must 

comply with all applicable licensing and other regulatory requirements) by: 

1. Requiring each child care provider to submit a copy of any current license 

and any statement of compliance from any body charged with regulating 

that provider; 

2. Requiring child care providers to submit their taxpayer identification 

numbers; and 

3. Insuring that licensed child care providers understand that if, for whatever 

reason, the provider is no longer licensed or subject to regulatory 

oversight or is not in compliance with applicable regulations, the 

provider will immediately notify the contractor and the Federal employee 

whose child is enrolled in the child care program. In such cases, the 

provider will no longer be permitted to receive the child care subsidy; 

and 
F. Review monthly invoices for the child care subsidy amounts from the child care 

providers, and provide payment if appropriate, based on the invoiced amount no 

later than 30 calendar days after the date of the invoice. The contractor will pay 

the child care subsidy tuition assistance directly to the child care provider, and 

not to the Federal employee, unless OPM has approved payment directly to the 

employee. 

1. Insure that the child care provider submits a written invoice, on a monthly 

basis, to the contractor. 

2. Child care subsidy will be quoted as weekly amounts and the invoices must 

be prepared using full week amounts unless the child leaves the 

program during a particular week. 

G. Provide the agency with monthly reports for tax purposes if payments do 

not qualify for the Dependent Care Assistance Plan (DCAP) exclusion. 

III. CHILD CARE SUBSIDY PROGRAM ELIGIBILITY AND DETERMINATION OF SUBSIDY AMOUNT 

The contractor will issue quarterly reports to the Agency on the status of the Agency’s 

child care subsidy program. Reports will contain the following information and will be due 

on the fifteenth day following the end of the quarter. 

A. The amount of child care subsidy disbursed in a given month; 

B. The number of children enrolled whose parents receive the child care subsidy; 

C. The number of Federal employees from the agency who qualified for and received 

the subsidy; 

D. The total family income of each family that receives a child care subsidy; 

E. The amount of the weekly child care subsidy for each recipient; 

F. The name and address of each child care provider that provides services for the 

child care subsidy recipients; 

G. The number of total applicants for the month; 

H. The number of applications in process; 

I. The number of new child care subsidies approved; 

J. The number of applicants who were ineligible; 

K. The number of applicants who were denied assistance due to lack of agency funds; 

and 

L. The remaining balance of the agency’s funds. 

IV. PROPOSAL SUBMISSION REQUIREMENTS 

A. Technical Proposal 

Offerors must submit an original and two copies of a technical proposal which 

demonstrates the approach they will use to provide all the services described in 

this statement of work. Additionally, offerors should include in their technical 

proposals information demonstrating they have experience in administering 

similar programs, and references to contact to determine their past performance 

in administering similar programs. 

B. Price Proposal 

Offerors must submit an original and one copy of a pricing proposal that 

indicates the total, firm, fixed price for providing these services. The total price 

should be broken down to show the individual pricing elements that go into the 

total price proposed. 
V. PROPOSAL EVALUATION 

Offeror’s technical proposals will be evaluated against the following criteria. They are 

stated in descending order of importance: 

A. Offeror’s proposed approach to administering this program. 

B. Offeror’s corporate experience in administering similar programs. 

C. Offeror’s past performance in performing similar programs. 

VI. AWARD DETERMINATION 

The successful offeror will be chosen primarily on the basis of their ability to successfully 

perform these services as demonstrated in their technical proposal. The (Agency) will 

also consider the total cost to perform these services in making its award decision. 

However, in making the award decision, technical excellence will be more important than 

cost and the government reserves the right to make award to the offeror whose proposal 

provides the best value to the government, even if that offeror did not offer the lowest 

cost bid. 
APPENDIX I 

SAMPLE DEPENDENT CARE ASSISTANCE PLAN DOCUMENT 

UNDER SEC. 129 of INTERNAL REVENUE CODE 

ARTICLE 1 - PURPOSE OF THE PLAN 

1.1. (AGENCY) establishes this Plan under Public Law 107-67, Section 630, to 

subsidize a portion of the cost of child care incurred by (AGENCY)’s employees.

1.2. (AGENCY) also intends that the Plan qualify as a plan providing dependent 

care assistance under Internal Revenue Code (Code) Section 129. Only the subsidies 

provided under the Plan for Eligible Child Care Expenses on behalf of a Qualifying 

Child who is also a Qualifying Dependent will be eligible for exclusion from the 

Participant’s gross income under Code Section 129(a). Subsidies disbursed on 

behalf of a Qualifying Child who is not also a Qualifying Dependent must be 

included in the Participant’s gross income.

ARTICLE 2 - DEFINITIONS 

2.1. "Benefits" means the amounts paid to Participants under the Plan to subsidize 

Eligible Child Care Expenses paid or incurred by the Participant. 

2.2. "Child" means a member of a household maintained by an Employee who bears the 

following relationship to the Employee: 

a.a biological child who lives with the Employee; 

b. an adopted child; 

c.a stepchild; 

d. a foster child; 

e.a child for whom a judicial determination of support has been obtained; or 

f. a child to whose support the Employee who is a parent or legal guardian makes regular and 

substantial contributions. 

2.3. "Code" means the Internal Revenue Code of 1986, as amended. 

2.4. "Dependent" means any individual who is a dependent of a Participant within the 

meaning of Code Section 152(a). 

2.5. "Earned Income" means all income, as defined under Code Section 32(c)(2), 

including income from wages, salaries, tips and other employee compensation, and net 

earnings from self-employment, but does not include any amounts received: (i) as pre-tax 

benefits under Code Section 129 on behalf of a Qualifying Dependent under the Plan or 

any other dependent care assistance program; (ii) as a pension or annuity; or (iii) as 

unemployment or workers’ compensation. 

2.6. "Educational Institution" means any college or university, the primary function of 

which is the presentation of formal instruction and that normally maintains a regular 

faculty and curriculum and normally has a regularly enrolled body of students in 

attendance at the place where its educational activities are regularly carried on. 
2.7. "Effective Date" means (date selected for start of program). 

2.8. "Eligible Child Care Expenses" means expenses incurred by a Participant for 

Qualifying Services which are paid to a Qualifying Provider who is not: (i) a Dependent 

of a Participant or a Dependent of the Spouse of a Participant, (ii) a child of a Participant 

under the age of 19, and which are incurred to enable the Participant or the Participant's 

Spouse to be gainfully employed. 

2.9. "Eligible Employee" means an individual employed on a full time basis by 

(AGENCY). 

2.10. "Employee" means an employee of (AGENCY). 

2.11. "Highly Compensated Employee" means any person who is a highly 

compensated employee as defined in Code Section 414(q). 

2.12. "Maintaining a Household" means that an Employee or, if married, an Employee 

and Spouse together furnish over one half the cost of maintaining a household. 

2.13. "(AGENCY)" means (full name of agency if acronym/abbreviation used 

throughout document). 

2.14. "Participant" means any Employee who has satisfied the eligibility requirements 

of Section 3.1, who has made application and been accepted by (AGENCY) for benefits 

under this Plan. 

2.15. "Plan" means the (AGENCY) Child Care Subsidy Plan. 

2.16. "Plan Administrator" means (AGENCY). 

2.17. "Plan Year" means the 12-month period commencing on January 1 and ending on 

December 31. 

2.18. "Qualifying Child" means a Child of a Participant who is: (a) under the age of 13; 

or (b) under age 18 and is physically or mentally incapable of caring for himself or 

herself. 

2.19. "Qualifying Day Care Center" means a day care center, as described in Code 

Section 21 and regulations there under, that (i) complies with all applicable laws and 

regulations of the State and town, city or village in which it is located, (ii) is licensed to 

provide day care services in the state or location in which the day care center operates, 

(iii) provides care for more than six individuals (other than individuals who reside at the 

day care center) and (iv) receives a fee, payment or grant for services for any of the 

individuals to whom it provides services (regardless of whether the facility is operated for 

a profit). 
2.20. "Qualifying Dependent" means: (i) a Dependent of a Participant who is under the 

age of 13; or (ii) a Dependent of a Participant who is under the age of 18 and who is 

physically or mentally incapable of caring for himself or herself. 

2.21. "Qualifying Provider" means an individual or a Qualifying Day Care Center 

licensed to provide child care services in the state or location in which they operate. 

2.22. "Qualifying Services" means services performed: 

a.in the home of the Participant, or outside the home of the Participant, or at a Qualifying 

Day Care Center, or licensed Family Day Care Home 

b. for the care of a Qualifying Child or Qualifying Dependent of the Participant; 

c.to enable the Participant or the Participant’s Spouse to remain gainfully employed; and 

d. for the primary purpose of assuring the Qualifying Child's or Qualifying Dependent's well 

being and protection 

Qualifying Services do not include services provided at a camp where the Qualifying 

Child or Qualifying Dependent stays overnight. 

2.23. "Spouse" means the husband or wife of a Participant but does not include an 

individual legally separated from a Participant under a decree of legal separation. 

2.24. "Student" means an individual who during each of five calendar months during a 

Plan Year is a full time student at an Educational Institution. 

 

ARTICLE 3 - ELIGIBILITY AND PARTICIPATION 

3.1. An Employee is eligible for this Plan immediately upon becoming an Eligible 

Employee.

3.2. An Eligible Employee will become a Participant in the Plan upon application for 

Benefits to and approval by (AGENCY).

3.3. If a Participant ceases to be an Eligible Employee, he or she will no longer be 

eligible to receive Benefits under the Plan. If the Employee again becomes an 

Eligible Employee, he or she may again become a Participant in the Plan.

ARTICLE 4 - BENEFITS 

4.1. A Participant in the Plan will be eligible to receive Benefits under the Plan for 

all Eligible Child Care Expenses incurred by the Participant or his or her Spouse 

subject to the limitations of Article 6.

4.2. Benefit Amounts.
a.Benefits will be provided as a percentage of the Eligible Child Care Expenses according to a 

schedule based on the Participant’s total family income. 

b. The current schedule of benefits is shown as Attachment A to this Plan (agency should 

include...) 

c.(AGENCY) may adjust the schedule in Attachment A from time to time based on the 

availability of funding for the program and to maintain an equitable distribution of 

benefits for all Eligible Employees. 

d. (AGENCY) will sign a new Attachment A noting the effective date and provisions of the 

adjusted Benefits under the Plan and the new Attachment A will become a part of this 

Plan. 

4.3. A Participant will be entitled to Benefits under this Plan only for Eligible Child 

Care Expenses incurred after the later of: (a) the date he or she becomes a 

Participant in the Plan; or (b) the Effective Date of the Plan.

4.4. Each Participant who desires to receive a Benefit under the Plan for Eligible 

Child Care Expenses incurred by the Employee for Qualifying Services must submit 

to the Plan Administrator, on a form to be provided by (AGENCY), a statement 

containing the following information:

a.Name, home address and employment information for each of the child’s parents; 

b. Name, date of birth, child care enrollment information and weekly cost for each Child to 

be covered; 

c.Gross annual salaries of the father, mother and/or guardian, as appropriate, and total gross 

family income as reported on the most recent Federal income tax return; 

d. Amount and source of any other state, county or local child care subsidies; 

e.Completed and signed child care provider information form, along with proof of the 

Provider’s licensure and the Provider's Federal tax identification number; and 

f. Such other information or documents as (AGENCY) may require to administer the Plan. 

4.5. Following receipt of the information required in Section 4.4, the Plan 

Administrator will notify the Participant whether he or she is eligible to receive 

Benefits under the Plan.

4.6. Approval for and payment of Benefits will be subject to the availability of 

appropriated funds.

4.7. If a Participant ceases to be an Eligible Employee:

a.no Benefits will be paid for Eligible Child Care Expenses incurred after the date the 

Participant ceases to be an Eligible Employee; and 

b. unless the Participant was discharged from employment for cause, requests for Benefits 

may be made after the date of termination for Eligible Child Care Expenses incurred prior 

to the date of termination. 

4.8. The Participant is responsible for notifying (AGENCY) immediately of any 

change to information submitted for the purpose of qualifying for Benefits under 

this Plan.

 

ARTICLE 5 - AUTHORIZATION AND PAYMENT OF BENEFITS 
5.1. At the end of each calendar month, the Plan Administrator will send an invoice 

approval form to the Qualifying Provider named by the Participant on his or her 

Benefits application.

5.2. The Qualifying Provider will certify on the invoice approval form that the 

Qualifying Services for that billing period were actually performed on behalf of the 

Participant’s Qualifying Child.

5.3. The Participant will certify on the invoice approval form that the Qualifying 

Services for that billing period were in fact received by the Participant’s Qualifying 

Child.

5.4. The Qualifying Provider will then submit the completed invoice approval form 

to the Plan Administrator for review and payment.

5.5. The Plan Administrator will review the submitted invoice approval form and 

pay the Benefit amount directly to the Qualifying Provider.

 

ARTICLE 6 - LIMITATIONS ON BENEFITS 

6.1. The following amounts will not be subject to exclusion from the Participant’s 

gross income:

a.benefits payable for Eligible Child Care Expenses on behalf of a Qualifying Child who is not a 

Qualifying Dependent; or 

b. benefits payable for Eligible Child Care Expenses that exceed the following maximum 

amounts for the calendar year: 

i. For a Participant who is not married at the close of the calendar year, the lesser of 

the Participant’s Earned Income for the Plan Year (after all reductions in 

compensation), or $5,000; 

ii. For a Participant who is married at the close of the calendar year, the least amount 

of the following: 

A. the Participant’s Earned Income for the calendar year; 

B. the Earned Income of the Participant’s Spouse for the calendar year; 

C. $5,000, if the Participant and his or her Spouse file a joint Federal 

income tax return; or 

D. $2,500, if the Participant and his or her Spouse file separate Federal 

income tax returns. 

If the foregoing amounts are changed by an amendment to Code Section 129, the 

amounts set forth automatically shall be adjusted to reflect the new amounts.

6.2. For purposes of Section 6.1, a Spouse of a Participant who is not employed 

during any month in which the Participant incurs Eligible Child Care Expenses, 

and which Spouse is either physically or mentally incapable of caring for himself or 

herself or is a Student, will be deemed to have Earned Income for such month of:

a.$200, if there is one Qualifying Dependent for whom the Participant incurs Eligible Child 

Care Expenses; or 
b. $400, if there is more than one Qualifying Dependent for whom the Participant incurs 

Eligible Child Care Expenses. 

6.3. In accordance with Code Section 129(d), the average Benefits provided to 

Participants who are not Highly Compensated Employees will be at least 55% of the 

average Benefits provided to Highly Compensated Employees. (AGENCY) may 

adjust the Benefits payable to Highly Compensated Employees to assure that the 

Plan remains in compliance with this provision.

ARTICLE 7 - FUNDING 

7.1. (AGENCY) will contribute the amounts required to pay Benefits under this 

Plan out of appropriated funds. There will be no special fund out of which Benefits 

are paid, nor will Participants be required to make a contribution as a condition of 

receiving Benefits.

 

ARTICLE 8 - PLAN ADMINISTRATION 

8.1. (AGENCY) will administer the Plan according to its terms and subject to 

applicable law, for the exclusive benefit of persons entitled to participate in the Plan, 

without discrimination among them. In addition to all other powers provided by this 

Plan, (AGENCY) has authority to:

a.Make and enforce rules and regulations as it deems necessary or proper to efficiently 

administer the Plan; 

b. Interpret the Plan in good faith, and its interpretations will be final and conclusive on all 

persons claiming benefits under the Plan; 

c.Decide all questions concerning the Plan and the eligibility of any person to participate in 

the Plan; 

d. Appoint agents, counsel, accountants, consultants and other persons as needed to help 

administer the Plan; and 

e.Allocate and delegate, in writing, its responsibilities under the Plan and to designate other 

persons to carry out any of its responsibilities under the Plan. 

8.2. (AGENCY) will make available to each Eligible Employee such records under 

the Plan as pertain to the Eligible Employee, by request under the Privacy Act.

8.3. In administering the Plan, (AGENCY) will be entitled, to the extent permitted 

by law, to rely conclusively on all tables, valuations, certificates, opinions and 

reports that are furnished by accountants, counsel or other experts employed or 

engaged by (AGENCY).

8.4. Whenever, in the administration of the Plan, any discretionary action by 

(AGENCY) is required, (AGENCY) will exercise its authority in a 

nondiscriminatory manner so that all persons similarly situated will receive 

substantially the same treatment.
8.5. The Plan Administrator will provide to each Participant receiving Benefits 

under the Plan during the Plan Year a statement of the amount of Benefits received 

by the Participant during that Plan Year. This statement will be furnished to the 

Participant by January 31st following the end of the Plan Year. The amount of 

dependent care subsidies provided to the Employee will be reported on the 

Employee's Form W-2.

 

ARTICLE 9 - CLAIMS PROCEDURE 

9.1. A Participant may make a claim for Benefits by completing the invoice approval 

form in conjunction with the Qualified Provider, as described in Article 5.

9.2. If a claim is wholly or partially denied, notice of the decision will be furnished to 

the Participant and to the Qualifying Provider within a reasonable period of time, 

not to exceed 90 days after receipt of the claim by the Plan Administrator, unless 

special circumstances require an extension of time for processing the claim. If an 

extension of time is required to make a decision, the Plan Administrator will notify 

the Participant prior to the end of the initial 90-day period. The extension may not 

exceed 90 days from the end of the initial period. The notification will include:

a.the specific reason(s) for the denial; 

b. a description of any additional information necessary to make a decision; and 

c.an explanation of the Plan’s claims review procedure, as described in Section 9.3. 

9.3. If a claim is denied, the Participant may request in writing that the Plan 

Administrator review the claim. Upon receipt of a request for review, the Plan 

Administrator will review the decision and respond to the Participant within 60 

days of receipt of the written request. If the Plan Administrator affirms the original 

denial of the claim, the Participant may invoke the applicable grievance procedure, 

either:

a.the negotiated grievance procedure outlined in the collective bargaining agreement 

between (AGENCY) and the union; or 

b. the administrative grievance procedure contained in the (AGENCY) Human Resource 

Handbook, as currently in effect. 

9.4. If a dispute arises on any matter under this Plan, the Plan Administrator may 

refrain from taking any other or further action in connection with the matter 

involved in the controversy until the dispute has been resolved.

 

ARTICLE 10 - AMENDMENT AND TERMINATION OF PLAN 

10.1. (AGENCY) may amend or terminate this Plan at any time. The benefits 

hereunder are not guaranteed and may be reduced by plan amendment. 
10.2. This Plan will not terminate unless appropriated funds are no longer available. 

 

ARTICLE 11 - MISCELLANEOUS PROVISIONS

11.1. This Plan and the benefits it offers do not provide any additional rights to 

Participants or Employees other than those expressly set forth herein. 

11.2. This Plan will be construed, administered and enforced according to the laws 

of the United States of America.

Adopted as of the Effective Date by:

AGENCY 

By: _______________________ (Director) Date:_____________ 

 

(AGENCY) CHILD CARE SUBSIDYASSISTANCE PLAN 

ATTACHMENT A 

BENEFIT SCHEDULE 

Effective as of the date stated below, the following Benefit schedule will be in effect 

under Section 4.2 of the Plan: 

If Eligible Employee’s Total 

Family Income1 is... 

Then the Plan will pay this percentage of the 

Participant’s Eligible Child Care Expenses2

Over $47,000 0% 

$42,000 - $47,000 5% 

$37,000 - $41,999 10% 

$32,000 - $36,999 15% 

$27,000 - $31,999 20% 

$22,000 - $26,999 25% 

$21,999 or less 30% 

1 Total Family Income refers to line 22 on Internal Revenue Service (IRS) Tax Return 

Form 1040 or line 15 on IRS Tax Return Form 1040A. 

A Participant’s Benefits under this Plan will be reduced by the amount of other state or 

local child care subsidies received by the Participant. 

Adopted as of the Effective Date by:
AGENCY

By: _______________________ (Director) Date:_____________

Incremental change effective (date) approved by Director 

If Eligible Employee’s Total 

Family Income1 is... 

Then the Plan will pay this percentage of the 

Participant’s Eligible Child Care Expenses2

Over $52,000 0% 

$47,001 - $52,000 20% 

$32,000 - $47,000 30% 

$31,999 or less 50%