A bill for an act making children of child care workers in this state eligible for the state child care assistance program. (Formerly HSB 500.) Effective date: 07/01/2026.

Child care workers gain aid with copayments

Beginning July 1, 2026, Iowa creates a new child care assistance path for children of qualifying child care workers. The child's parent, guardian, or custodian must work at an Iowa child care facility or home that accepts program payments. Workers must average at least 32 hours weekly during the month in a job mainly providing care directly to children. They must also regularly count toward the state's required child-to-staff ratio. Facility directors, co-directors, and administrative staff can qualify when regularly counted toward that ratio. The department must review the application and find that the family needs child care. Workers cannot own the facility or home where their child is enrolled. At child care homes and child development homes, workers cannot care for their own child or be substitutes or assistants. A child development home's co-provider can qualify subject to the law's requirements and department rules. Families must pay a copayment set by department rules. The department must adopt rules to run this new eligibility path. By December 1 each year, it must report participation and spending to the legislature. Reports must separately show state and federal spending on provider reimbursements and administration for the preceding fiscal year. They must also show participating family and child counts, plus participating families' average gross household income. Family counts must be reported in five income bands relative to the federal poverty level: above 160% but below 180%; at least 180% but below 200%; at least 200% but below 220%; at least 220% but below 250%; and at least 250%.