How Will Funding Changes Impact Tennessee Families?
Families enrolled in the Smart Steps Child Care Program will be impacted by funding adjustments:
Families receiving Smart Steps Payment Assistance will continue enrollment:
Families participating in Smart Steps on August 26, 2025, will remain enrolled until the end of their 12-month eligibility period. These families will have the option to renew enrollment based on eligibility criteria at time of redetermination.
Base reimbursement rates will largely remain the same:
Base reimbursement rates paid to child care providers on behalf of families will remain the same for families enrolled in the Smart Steps Program.
Co-payment amounts may change for some families:
In 2024, TDHS structured co-pays so that families with incomes below the 150 th percentile of Federal Poverty Level would have their co-pays waived. Beginning, October 1, 2025, every family approved for child care payment assistance, will be assessed a 5% co-pay based on their income. Families approved for Child Care Payment assistance through Families First, Early Head Start partnership, Mental Health and Substance Abuse, and services through the Department of Children’s Services (DCS) will continue to have waived co-pays. Click here for details on eligibility limits and co-pay fees .
Some differentials will be eliminated:
Starting October 1, 2025, reimbursement rate differentials will be eliminated for toddlers and eliminated for participants living in child care deserts or distressed counties and non-traditional hour care. The 15 percent differential for children with disabilities and infants will remain as it was prior to October 1, 2025. There were additional adjustments to the QRIS bonus levels effective January 1, 2026. The current Reimbursement Rate Chart can be found by clicking here.
A list of Child Care Reimbursement Rates is available online:
To view a chart with details on the child care reimbursement rates that became effective October 1, 2026, click here. Participants can also review their case and the latest updates via the One DHS Customer portal at OneDHS.TN.Gov .