On Jan. 6, 2026, the Department of Health and Human Services (HHS) moved to freeze access to major federal programs that support child care subsidies and family services. California, Colorado, Minnesota, Illinois, and New York are among the five states that are affected by the funding freeze, HHS cited serious concerns about misuse or fraud.
“Families who rely on child care and family assistance programs deserve confidence that these resources are used lawfully and for their intended purpose,” said Deputy Secretary Jim O’Neill. “This action reflects our commitment to program integrity, fiscal responsibility, and compliance with federal requirements.”
The freeze on funding directly impacts three programs under the HHS’s Administration for Children and Families (ACF), including:
- The Child Care and Development Fund (CCDF), a primary federal program for subsidizing child care costs for low-income families. Nearly $2.4 Billion is now restricted pending review.
- Temporary Assistance for Needy Families (TANF), a $7.35 billion program that states can use for cash assistance and certain work supports, including child-care-related spending.
- Social Services Block Grant (SSBG), a grant that can support a wide range of services, including child care services. $8.69 Billion allocated to this grant are now paused and waiting to be reviewed.
HHS statements claim the action is in response to alleged fraud within these five states. ACF recently implemented a nationwide system called Defend the Spend, which will require the aforementioned states to submit a justification and receipt documentation before releasing any federal funds.
“We are closely monitoring the rapidly changing federal activities initiated by the Administration for Children and Families (ACF). As additional information and guidance become available, we will be able to do a deeper analysis of the potential impact on our funding, services, and the clients we serve,” said Kristy Torres, Public Information Officer for Kern County Department of Human Services.
Providers who rely on state reimbursement streams supported by CCDF, such as licensed child care centers, family child care homes, and preschool programs, will all be affected by the current funding freeze. Families receiving child care assistance will also be affected because a child care provider may not be able to hold a slot without the assurance of reimbursement, meaning families may not be able to afford child care with the new funding freeze.
ACF is currently undergoing a comprehensive and complete review to determine which states are in accordance with federal requirements. Until they come to conclusion, funds will continue to be paused in this manner.
