Tennessee Childcare Assistance for Kinship Caregivers

Three Paths to Childcare Help

Tennessee's Department of Human Services (TDHS) offers subsidized childcare through the Child Care Certificate Program. Relative caregivers can access funding through three distinct routes, each with its own eligibility rules. The right one depends on whether you have an active Families First child-only case, your work or school schedule, and how the child came into your care.

At-Risk Child Only (ARCO)

ARCO is specifically designed for kinship caregivers with an active Families First child-only case. If you're already receiving the child-only cash grant, ARCO is the childcare track built for your situation.

The requirements: you must work, be self-employed, or attend education or training activities for at least 30 hours per week. That work requirement is the key gate — ARCO excludes caregiver income when calculating co-pay fees, but you do have to document 30 hours of qualifying activity.

ARCO is often the best option for working grandparents because the co-pay is based on a child-only income determination, not your full household earnings.

Smart Steps Child Care Payment Assistance

Smart Steps is the broader childcare subsidy available to working or student relative caregivers with household income below 85% of the State Median Income (SMI). Unlike ARCO, Smart Steps does count caregiver income, and co-payments are calculated on a sliding scale based on SMI brackets.

You don't need an active Families First case to use Smart Steps — eligibility is based on its work or school and household-income criteria. But the co-pay will typically be higher than ARCO if your income is moderate.

DCS Child Welfare Referrals

If a DCS caseworker placed the child in your home through the child welfare system — as a relative foster placement, during protective supervision, or in another covered placement — the caseworker can generate a direct childcare referral.

How to Apply

Apply for ARCO and Smart Steps through the ONE DHS Customer Portal at onedhs.tn.gov. For a DCS referral, work with the caseworker. You'll need identity and residence documents, proof of your work or school schedule (pay stubs, employer verification, class enrollment), the child's identifying documents, and for ARCO, confirmation of your active Families First child-only case.

Standard processing takes up to 30 calendar days. The subsidy is paid directly to your licensed childcare provider — you don't receive cash.

Practical Considerations

Childcare subsidies don't guarantee an immediate slot. The payment goes to participating licensed providers in the state certificate network, and availability depends on openings at those providers in your area. If you're in a rural part of the state where licensed providers are sparse, the wait can be longer.

Co-pay fee schedules and SMI eligibility thresholds are updated annually on October 1 based on State Median Income guidelines. The most recent update took effect October 1, 2026.

Redetermination happens annually. Keep your work or school documentation current, because a lapse in verified hours can disrupt the subsidy.

The Tennessee Kinship Financial Help Guide walks through all three childcare funding paths alongside Families First, SNAP, TennCare, and every other program available to relative caregivers — organized in the order you'd apply, with the documents needed for each step.

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