Federal Agency Childcare Subsidy Programs Take Off

By on January 27, 2005 in Current Events with 0 Comments

Federal agency childcare subsidy programs administered by the Federal Employee Education & Assistance Fund reached a record dollar level in fiscal year 2004, exceeding $4.4 million across 24 agencies. Subsidy payments increased 16% from FY03.

Federal agencies are beginning to realize the value of providing a childcare subsidy program for lower income employees. FEEA maintains that having such a program is a great recruiting tool that allows agencies to hire the best and brightest. As a result, higher retention rates decrease agencies’ recruitment and training costs, with savings often covering the cost of a childcare program.

Imagine making $31,000 per year and having 2 pre-school children in daycare and one child in school requiring before- and after-school care, at a total cost of $2,000 per month, more than the employee’s take-home pay. Providing a childcare subsidy enabled one agency to retain an employee in this situation after the birth of her third child in 2004. Without the childcare subsidy program, she would not have returned from maternity leave and the agency would be out recruiting and training a new employee at a substantial cost.

Federal agencies have great latitude in how programs are structured. Income caps for eligible employees and the method by which the amount of the subsidy is determined vary substantially from agency to agency. In fact, in FY04 agency programs reimbursed anywhere from 20% to 80% of their employees’ cost of childcare. The mean reimbursement percentage was 41%. This significant variance relates primarily to the agency’s choice of subsidy computation model. The agency plans may contain a computation method that pays a percentage of the employee’s childcare cost, one that pays a flat amount per week or per month, or one that requires the employee to pay a

certain amount before the subsidy kicks in. Agencies have the flexibility to choose the model that works best for the agency and the employees.

More than 2,600 federal employees with over 3,500 children benefited from the FEEA-administered programs in FY04.

FEEA is a private, nonprofit 501(c)(3) agency, primarily funded through federal employee contributions to FEEA CFC Pledge #1234 and donations to special relief funds. Since 1986, the FEEA Emergency Assistance Program has provided over $3.2 million in financial assistance to federal families experiencing natural disasters such as floods, fires and hurricanes, and to those experiencing unforeseen personal emergencies such as illness or death in the family. FEEA has also provided more than $4.5 million in scholarships to civilian federal employees and their dependents. Questions about starting a childcare subsidy program may be addressed to the OPM work and family section or to feeachildcare@aol.com.

For more information, vist the FEEA Web site or call 303-933-7580.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.