The 24/7 news cycle isn’t easy for anyone to keep up with. And as a parent, you’re lucky if you catch a few headlines a day between work, packing school lunches, coordinating baseball pickup, and signing permission slips.
But every once in a while, there’s a news story that directly affects the livelihood of U.S. families. That’s exactly what’s happening now, as the American Rescue Plan funding has expired as of September 30, 2023. The federal program that provided additional support for parents and schools during the pandemic has gone away, which means you’ll no longer be able to take advantage of certain health and financial benefits.
While it’s important for parents to understand how these federal legislation changes will impact their families, we know you’re short on time. So here’s a helpful guide that outlines what to know about the expired American Rescue Plan and what resources are still available.
What was the American Rescue Plan?
The American Rescue Plan was a $1.9 trillion package designed by the Biden administration to contain COVID-19, stimulate the economy, and provide direct relief to Americans. It contained several measures of support for families specifically, like:
- Stimulus checks for adults and their children
- Increased expense limits for Dependent Care FSAs
- A boost in the Child Tax Credit & Child and Dependent Care Tax Credit
- Federal protections for paid pandemic-related family leave
- Expanded unemployment benefits
The plan also included additional support for child services, with over $130 billion dedicated to K-12 education and an additional $39 billion dedicated to child care centers and providers.
When Did the American Rescue Plan End?
The American Rescue Plan was originally set to expire in 2022, but was extended to September 30, 2023. That date has now passed, so the funding has officially expired.
What Does the Expiration of the American Rescue Plan Mean For Families?
1. Child Care Will Become More Difficult To Access
Unfortunately, the U.S. child care problem is about to get a lot worse. While the American Rescue Plan offered financial assistance to child care providers and non-profits throughout the pandemic, many of those organizations haven’t fully recovered and will no longer be able to support themselves.
More than 70,000 child care programs are projected to close in the wake of the plan’s expiration, and about 3.2 million children could lose their spots at daycare and other educational facilities.
That means parents like Sarah Morgan are scrambling to find last-minute care after finding out their local YMCA is closing. She and her husband had planned to enroll their one-year-old son in the facility’s early learning center, but are now struggling to come up with a plan B due to long waitlists everywhere else:
“It’s really sad that my son won’t have that type of educational experience. It’s just really been devastating.”
— Sarah Morgan, parent
2. Child Care Will Become More Expensive
Any economist knows that when either supply or demand changes, it creates an imbalance in the market—and that’s exactly what experts are predicting when it comes to child care. As access to care decreases, costs are expected to rise by 15% or more.
And for families like the Maganas, that means an already-expensive budget item will only consume more of their overall income. Mom Bella says she’s setting aside her entire paycheck to pay for her son’s care:
“We’re on waitlists at multiple daycares, and because we can’t find a spot for [my son], my entire paycheck is set aside for child care. So as this bill is set to expire, I can only imagine it’s going to get more difficult for myself and other families.”
— Bella Magana, parent
3. More Women Will Leave the Workforce
Because child care costs are expected to increase even further, many families are having difficult conversations about how to move forward. For some, it’s become more cost-effective for one parent to stay home with the children than to pay for care.
And unfortunately, that decision usually tends to affect women disproportionately. Women are 5 to 8 times more likely than men to have their employment affected by caregiver responsibilities, and the Century Foundation predicts that trend will continue as the American Rescue Plan expires.
“When my paycheck is what we pay on child care, it’s looking like it’s going to be a better option for me to stay home, because we can’t find affordable, quality daycare.”
— Bella Magana, parent
What Resources Are Still Available For Families in Need?
Fortunately, all hope is not lost. Even as these federal programs go away, there are other resources available for parents who are struggling to secure childcare and support their families.
Find Affordable Child Care
If you’re struggling to find a child care provider, we have you covered! Sittercity makes it easy to find the right local nanny for your family. Start your search and filter by your family’s needs here.
And if you’re worried about how to pay for it all, check out these tips for how to make child care more affordable for your family.
Look Into Child Care Tax Benefits
The American Rescue Plan expanded tax credits for parents, but there are still benefits available even after the plan has ended.
- Child and Dependent Care Tax Credit
There are requirements for you (the parent), your child, your caregiver, and your caregiver expenses to meet in order to qualify. If you’re eligible, this credit “gives back” a portion of the money you spend on care, and can reduce your tax bill by hundreds or even thousands of dollars.
- Dependent Care Flexible Savings Account
The Dependent Care FSA is a flexible spending account that’s a pre-tax benefit offered by an employer and used to pay for qualified, out-of-pocket dependent care expenses—like your nanny’s wages. How much you can save in taxes depends on your tax bracket and your state and/or local income tax rates. Remember, in order to take advantage of a Dependent Care FSA, you must be paying your caregiver legally.
Use Other Federal Grants and Services
While the American Rescue Plan is ending, there are lots of other federal and local grants and social service programs that support families with financial limitations. Here are just a few:
- Temporary Assistance for Needy Families (TANF): Helps low-income families with children achieve economic self-sufficiency
- Supplemental Nutrition Assistance Program (SNAP): Provides a monthly cash benefit to help pay for nutritious food
- Child Care Assistance Program (CCAP): Supports child care for parents who are working, job-hunting, or going to school
- Head Start: Provides early education, medical and dental care, help with nutritional issues, and resources for pregnant women
Finding and paying for child care has never been easy. And unfortunately, it’s about to get a lot harder now that COVID-era support systems are no longer in place. But it’s important to remember that you’re not alone, and there are other assistance programs in place to help you care for your family.
And of course, the Sittercity team is always here to help! Find the sitter or nanny your family needs—start your search today.