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Financial Hardship Grants

The American Rescue Plan Act, signed into law in March 2021, provided Minnesota with additional funds to help stabilize the child care industry as the state continues to recover from the COVID-19 pandemic. At the end of June 2021, the Minnesota Legislature created Minnesota’s Child Care Stabilization Grant Program, which is funded by the federal American Rescue Plan Act. It began in June 2021 and will run through June 2023. This includes the creation of an additional grant opportunity to help providers experiencing extreme financial hardship, called the Financial Hardship Grant Program. Financial Hardship Grants are separate from the Child Care Stabilization Base Grants, have different eligibility requirements and require a separate application. 

The June 2022 Financial Hardship Grant application period is now open.

Below is basic information regarding the Child Care Stabilization Financial Hardship Grants. More detailed information is available on the Financial Hardship Grant FAQ page. 

Resources and Communication

If you need assistance in a language other than English, please use the resources below.

Child Care Aware of Minnesota will use Language Line Services for languages other than Hmong, Somali, and Spanish.

Differences between Financial Hardship Grants and Child Care Stabilization Base Grants

Child Care Stabilization Base Grants are available to child care programs that are licensed, certified or registered and in good standing with the Minnesota Department of Human Services or their tribe. Programs do not need to demonstrate financial need to be eligible for a base grant. Please see the Child Care Stabilization Base Grant webpage for more details.   
 
Financial Hardship Grants are available to programs that are experiencing extreme financial hardship and have a demonstrated financial need. Financial Hardship Grants are separate from the Base Grants, have different eligibility requirements and require a separate application. Unlike the Base Grants, Financial Hardship Grants do not require 70% of funds to be used to increase compensation for staff regularly caring for children. While legal non-licensed providers are eligible for Base Grants, they are not eligible for Financial Hardship Grants.
 
The department held information sessions on January 12, 2022, to introduce Financial Hardship Grants. These presentations can be viewed below: 

Licensed Family Child Care Provider
One-time Supplemental and Financial Hardship Grants Information Session: January 12, 2022

Licensed & Certified Child Care Center
One-time Supplemental and Financial Hardship Grants Information Session: January 12, 2022

Financial Hardship Grant eligibility criteria

Due to differences in how licensed family child care, licensed child care center and certified child care center providers operate, there are different eligibility criteria for each provider type. Legal non-licensed child care providers are not eligible for Financial Hardship Grants.

To be eligible to apply for a Financial Hardship Grant, providers must meet the initial eligibility criteria in each round that they apply for a Financial Hardship Grant. These initial eligibility criteria include:

Meet one of the following definitions:

To be eligible for funding, all programs must be in operation and serving children for at least 6 months prior to the first day of the application period and during the three-month funding period (temporary closures during this time are allowed, see the application timeline table below for funding period dates). All programs also need to be licensed or certified and in good standing throughout the funding period with the Minnesota Department of Human Services (under Minnesota Rules, Chapters 9502, 9503, 245H or 119B) or their tribe. “In Good standing” means programs cannot be:

  • The subject of a current or past finding of fraud
  • Prohibited from receiving public funds under Minnesota Statutes, Section 245.095
  • Under revocation or under temporary immediate suspension.  

Providers who meet the initial eligibility criteria above are eligible to apply for a Financial Hardship Grant and must meet at least one of three eligibility criteria related to financial hardship for their provider type (licensed family child care, licensed child care centers or certified child care centers). The financial hardship eligibility criteria for each provider type are listed below:


Criteria 1 Criteria 2 Criteria 3
Licensed Family Child Care COVID-related closure where a provider receives less than 75% of their total monthly income, including parent fees and, if applicable, reimbursements from the Child Care Assistance and/or Early Learning Scholarship programs. Two or more months behind on rent or mortgage payments.   Operating loss over the previous consecutive three months equal to 25% or more of a provider’s gross income.
Licensed Child Care Centers     Insufficient monthly gross income to cover two payroll periods (four weeks).  Two or more months behind on business rent or mortgage payments. Operating loss over the previous consecutive three months equal to 33% or more of a provider’s gross income.
Certified Child Care Centers Insufficient monthly gross income or operating funds   to cover two payroll periods (four weeks). 

Public school-based program with a Fund Balance equal to or less than $0. 

Non-public school based programs with Days Cash on Hand less than 10 days. 

Operating loss over the previous consecutive three months equal to 33% or more of a provider’s gross income.

Gross income = Income that your child care business receives. This includes parent fees, potentially Child Care Assistance Program and Early Learning Scholarship payments, loans, grant funds, and other sources of income.

Operating loss = When a child care provider’s operating expenses exceed gross income.

Days cash on hand = The number of business days that a business could continue to operate if its income stopped or could not be collected. Calculation: unrestricted cash ÷ [(total expenses – depreciation – in-kind expenses) ÷365]

Please refer to the Financial Hardship Grant Frequently Asked Questions (FAQ) webpage for more details. 

Financial Hardship Grant award amounts

Financial Hardship Grant award amounts are intended to stabilize programs facing extreme hardship over a period of up to three months. Grant award amounts will vary depending on provider type (i.e. licensed family child care, licensed child care centers or certified child care centers). Grant amounts have been determined based on the average operating expenses of providers. For example, the average monthly operating expense of the largest licensed child care centers is over $110,000 while the average operating expense for the smallest licensed child care centers is less than $20,000

Exact grant award amounts for providers applying in January will be finalized after the close of the grant application period and will be based on the total number of eligible applicants to ensure that adequate funding remains for a second round of Financial Hardship Grants in February. 

Eligible licensed family child care providers can receive one of two tiers of Financial Hardship Grants per month. 

  • The first tier is approximately a $1,500 grant for meeting the COVID-related closure criteria. Licensed family child care providers can receive this grant amount in every Financial Hardship Grant round that they meet the COVID-related closure criteria and do not qualify for the second tier grant.
  • The second tier is approximately a $4,500 grant for meeting the rent/mortgage criteria and/or the operating loss criteria. Licensed family child care providers can only receive this grant amount once every three months, if funding is still available.

Licensed child care centers can apply for approximate grant amounts between $8,000 - $70,000, based on their program’s licensed child capacity and licensed operating hours. Licensed child care centers can only receive this grant once every three months, if funding is still available.

Certified child care centers can apply for a grant of approximately $14,500. Certified child care centers can only receive this grant once every three months, if funding is still available.  

Financial Hardship Grant application process

The Minnesota Department of Human Services (DHS) uses an online application process, similar to the Child Care Stabilization Base Grant application. To apply, follow these steps:

Step 1:  Look for an email from DHS to child care providers announcing the availability of the application on January 26, 2022.

Step 2:  Start to prepare and compile information needed for your application. Please refer to Question 1.7 on the Financial Hardship Grant Frequently Asked Questions (FAQ) webpage  for more details.

Step 3:  Complete a  Financial Hardship Application Request Form  as early as possible during the application period. This form will be used to determine whether you meet the initial eligibility criteria described above and in FAQ Question 1.1 .

Step 4:  Watch for an email from DHS indicating whether your program met the initial eligibility criteria. If your program met the initial eligibility criteria, your email will contain a link to an individualized Financial Hardship Grant application. Complete this full application by the close date of the application period. After submitting your application, you will receive a confirmation email from DHS indicating your Financial Hardship Grant application has been received.

Step 5:  Look for an email indicating whether your program has been awarded or denied a Financial Hardship Grant after the application period closes. Award announcements will inform recipients when to expect their Financial Hardship Grant check. 

Financial Hardship Grant sample applications

Financial Hardship Grant applications for certified child care centers, licensed child care centers and licensed family child care are posted below.

Application Timeline: January 2022 through June 2022
Referred to as: Funding period Application period COVID closure period (for family child care providers only)
June 2022 Financial Hardship Grants     Mar. 1, 2022 - May 31, 2022 Jun. 23, 2022 – July 7, 2022 at 4 p.m. May 1, 2022 – May 31, 2022
July 2022 Financial Hardship Grants Apr. 1, 2022 - Jun. 30, 2022 Jul. 25, 2022 - Aug. 8, 2022 Jun. 1, 2022 - Jun. 30, 2022
August 2022 Financial Hardship Grants May 1, 2022 - Jul. 31, 2022 Aug. 23, 2022 - Sep. 6, 2022 Jul. 1, 2022 - Jul. 31, 2022
September 2022 Financial Hardship Grants Jun. 1, 2022 - Aug. 31, 2022 Sep. 23, 2022 - Oct. 7, 2022 Aug. 1, 2022 - Aug. 31, 2022
October 2022 Financial Hardship Grants Jul. 1, 2022 - Sep. 30, 2022 Oct. 25, 2022 - Nov. 8, 2022 Sep. 1, 2022 - Sep. 30, 2022
November 2022 Financial Hardship Grants Aug. 1, 2022 - Oct 31, 2022 Nov. 23, 2022 - Dec. 7, 2022 Oct. 1, 2022 - Oct. 31, 2022
December 2022 Financial Hardship Grants Sep. 1, 2022 - Nov. 30, 2022 Dec. 23, 2022 - Jan. 6, 2023  Nov. 1, 2022 - Nov. 30, 2022

Funding period:  The three-month time period when providers must meet all state and federal eligibility requirements of the Financial Hardship Grants. Please see the application timeline table above for dates.

Application period:  The period when providers apply for a Financial Hardship Grant.

COVID closure period:  The period during which licensed family child care providers reported one or more COVID-related closures

Requirements of Financial Hardship Grant recipients

Providers who accept a Financial Hardship Grant must attest in writing to meet the following requirements during the funding period.

  • Implement health and safety guidance. 
    • When open and providing services, providers attest in writing to implement policies in line with guidance and orders from corresponding state, tribal, and local authorities and, to the greatest extent possible, implement policies in line with guidance from the Centers for Disease Control and Prevention. This is required as part of the federal Child Care Stabilization Grant law. This guidance may change and providers are encouraged to frequently review the Centers for Disease Control and Prevention's Guidance for Operating Child Care Programs during COVID-19.
  • Pay staff at least the same amount in wages and maintain the same benefits
    • Per federal law, providers receiving grants agree to maintain wages (i.e. total weekly pay) for all staff during the funding period. This means that if an employee receives an hourly wage, then the total weekly wages earned must remain the same. Employers are also required to maintain the same level of staff benefits (such as health insurance and retirement, if applicable) over the duration of the funding period. All staff includes lead teachers, aides, and staff who are employed by the child care provider to work in transportation, food preparation, and any other staff that the provider employs.
    • Employees who voluntarily reduce their hours – for example requesting a reduced work schedule or requesting to take unpaid leave – may have their weekly wages reduced based on the voluntary request for reduced hours or leave. Staff cannot be involuntarily furloughed (i.e. temporarily laid off).
  • Report or update program capacity information through the Provider Business Update Tool
    • The Update Tool is available at Parent Aware, and allows programs to update their capacity. Programs that have never used the Update Tool before can refer to these instructions for using the Update Tool. For further assistance, email updatetool@parentaware.org. Plan to complete this survey, at a minimum, once every six weeks to ensure that the data remains current. 
    • Data from the Update Tool is used to update the map and survey data that are shared publicly through Parent Aware. This information helps parents of young children get connected to programs when they are looking for child care. 
Providers who accept a Financial Hardship Grant must agree not to:

  • Furlough or lay off employees
    • Per federal law, providers must attest in writing not to require an employee to involuntarily take time off without pay (i.e. lay off staff). In the event of a temporary closure due to public health guidance issued by the Minnesota Department of Health, Minnesota Department of Human Services and/or the provider’s local public health agency, employers must continue to pay their employees at the same rate of pay. Employers may lay off employees for cause at any time.   
  • Use these funds to pay taxes
    • Per federal requirements, providers are prohibited from using these funds to pay taxes, with the exception of payroll taxes.
  • Use these funds for items that have already been paid for by other public funding
    • Providers accepting these funds must ensure the funds are not used to pay for any allowable use that has already been paid for with other federal, state, tribal or local public funds. Examples of other funding sources may include Peacetime Emergency Child Care grants, COVID-19 Public Health Support Funds for Child Care, Tribal Child Care Stabilization Grant funds, forgiven Paycheck Protection Program loans, Child Care Aware Regional Grants, and others. 
Child Care Stabilization Base Grant funds are intended to cover additional allowable costs that are not covered by other support programs. If uncertain whether the source of funding from other support programs is public, verify with the organization that provided that support. 

Allowable uses of Financial Hardship Grant funds

Programs may use the funds for one or more of the following options. Expenses must be incurred between Jan. 31, 2020, and Sept. 30, 2023.  Providers accepting these funds must ensure the funds are not used to pay for any allowable use that has already been paid for with other federal, state, tribal or local funds.

  • Personnel costs, benefits, premium pay, staff recruitment and retention
This allows programs to pay for expenses such as:
  • Personnel costs (payroll, salaries, new hires, etc.) 
  • Employee benefits (health, dental, vision insurance)
  • Premium pay or bonuses for staff 
  • Retirement costs and contributions   
  • Educational costs (professional development, training, scholarships, etc.) 
  • Paid sick or family leave 
  • Support for getting the COVID-19 vaccine (appointments, paid sick leave, transportation).
  • Rent or mortgage payments, utilities, or insurance
 This allows programs to pay for expenses such as:
  • Rent or payments on any mortgage obligation, including payments that are past due from Jan. 31, 2020 or later
  • A business’s utility bills (heat, electric, phone, Wi-Fi service, etc.) 
  • Liability and/or accident insurance, transportation insurance, homeowner’s insurance, business insurance, etc. 
  • Late fees or charges from late payments.
  • Facilities maintenance and improvements
 This allows programs to pay for expenses such as minor renovations and minor improvements that are necessary to address COVID-19 concerns, such as: 
  • Building or upgrading playgrounds and outdoor learning spaces
  • Renovating bathrooms 
  • Installing ramps, railings, etc., for accessibility 
  • Removing non-load bearing walls to create more space for social distancing 
  • Replacing carpet with linoleum or another easily cleaned surface 
  • Installing touch-free faucets or light switches. 
 Please note that grant money cannot be used for construction, or major renovations or remodeling (structural changes to foundations and loadbearing walls, extensive alterations of a facility, etc.).

  • Health and safety equipment, supplies and training
 This allows programs to pay for expenses such as:
  • Personal protective equipment (gloves, masks, digital thermometers, face shields, changing table paper, etc.) 
  • Cleaning and sanitation supplies and services (cleaning or disinfecting wipes, ventilation systems, vacuums, washer, dryer, bleach, hand sanitizer, spray bottles, paper towels, soaps, garbage bags, professional cleaning and sanitation services, independent cleaning services, etc.) 
  • Training and professional development on health and safety practices. 
  • Purchases of or updates to equipment and supplies to respond to COVID-19
 This allows programs to pay for expenses such as:
  • Indoor and outdoor equipment and supplies (portable partitions, plastic shields, sink installation, disposable utensils and dishes, COVID-19 signage, storage containers, etc.)
  • Business items needed to respond to new challenges (software for tracking attendance, communicating with parents, etc.) 
  • Technology upgrades for collecting data and reporting to lead agencies (software purchases, technical assistance, etc.).
  • Goods and services necessary to maintain or resume child care services
 This allows programs to pay for expenses such as:
  • Food, food service equipment and materials; play, learning, eating, diapering, toileting and safe sleep materials
  • Business training and business support services (child care tracking online systems, etc.); child care management services (online payroll systems, accounting services, etc.); food services; transportation, janitorial or cleaning services; and professional development for staff.
  • Mental health supports for children and employees
 This allows programs to pay for expenses such as:
  • Mental health supports for staff (staff training and development, team building, resiliency and stress management, staffing patterns and schedules, program materials and supplies, a mental health library)
  • Toys to spark conversations with children about emotions and stress
  • Family engagement (parent/teacher conferences, books and other materials children can take home, activities for family game nights).
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