DCDEE Memo 12/2/2022 Subsidy Market Rate Changes

DCDEE Memo 12/2/2022

During the recent legislative session, the North Carolina General Assembly (NCGA) directed the Division of Child Development and Early Education (DCDEE) to use a portion of the Child Care & Development Block Grant ARPA funds to temporarily increase the child care subsidy reimbursement rates to those recommended in the 2018 Child Care Market Rate Study until the funds expire on September 30, 2024. Although this legislation applies to all counties, all age groups, and all star-rated licenses (three-star – five-star) participating in the NC Subsidized Child Care Assistance Program, there are some rates that will remain the same even after this change.

 A “market rate” or “subsidy rate,” as referenced in North Carolina legislation, represents the maximum amount that a child care center or home may be paid with subsidy funding for child care services. Market rates are not average child care rates. Market rates are established using the 75th percentile rate as determined by a child care market rate study; however, in 2018, the NCGA permitted DCDEE to implement rates recommended in the 2015 Child Care Market Rate Study at the 100th percentile for children birth through five years of age in three-, four-, and five-star rated child care centers and homes in tier one and tier two counties. Many of those rates are higher than the rates recommended in the 2018 Market Rate Study. In these situations, the Division will hold providers harmless and not decrease any rates. 

These market rate changes are based upon the data from the 2018 Market Rate Study.  The new market rate tables for each type of care and star level for each county is available on the DCDEE website. Rates highlighted in orange indicate an increase. Rates that are not highlighted are already higher than rates recommended from the 2018 Market Rate Study and will remain the same.

Click here for the Market Rates Flyer.

Access and review the county market rates for Family Child Care Homes  and Child Care Centers for 1-5 star licensed programs that became effective October 31, 2022

More information about the specific implementation date and instructions on accessing the rates in NC FAST will be coming soon.