South Carolina Paused Child Care Aid; Its Fix Covers a Month
Summary
South Carolina's Department of Social Services paused new applications to its Working Families child care scholarship on December 1, 2025, telling the state's own legislative auditor the program was spending $20 million to $24 million a month and could not keep paying out money it did not have. More than 1,900 child care providers statewide were enrolled to accept the scholarships when the freeze began. DSS's proposed fix -- a $20 million recurring increase requested in its FY 2026-27 budget -- is roughly the same size as a single month of what the program was already spending, and it was still moving through the legislature months after the pause took effect.
A program running on money that ran out
DSS pointed auditors to three converging causes for the pause, according to the Legislative Audit Council's June 2026 report⧉: the expiration of COVID-19-era child care relief funding that had been propping the program up, 'an incredibly high demand with large volumes of applications' from families, and disbursement delays tied to the federal government shutdown in fall 2025. The audit reproduces DSS's own public notice announcing the freeze, effective the same day it was posted: 'Applications submitted on or after 12/1/2025 will be denied.'
Who still gets in, and who's shut out
The pause isn't total⧉. Families already receiving a scholarship keep it for their full 52-week award -- DSS says no one already approved is being 'cut off.' New applicants still get in if they fall into one of eight protected categories: current or transitioning-off recipients, families experiencing homelessness or fleeing domestic violence, a child with a documented special need, an open child welfare case, or eligibility for SC First Steps 4K or Head Start. Everyone else applying to the general Working Families track -- the program's original purpose, helping parents work or attend job training by covering part of their child care bill -- is turned away until DSS says otherwise.
View data as table
| Recurring request (per year) | 20 | Submitted as part of DSS's FY 2026-27 budget request -- a one-time-per-year, ongoing increase to the base budget |
|---|---|---|
| Avg. program spend (per month) | 22 | Midpoint of the $20M-$24M DSS told auditors the program spends every single month |
The proposed fix, measured against the hole
DSS's response is a $20 million recurring funding request⧉, submitted as part of its 2026-27 budget ask -- 'recurring' meaning a permanent addition to the program's annual base budget, not a one-time payment. Measured against what the program actually spends, the ask is small: $20 million a year is about the same size as a single average month of the program's own reported $20-24 million monthly cost, and the program's full annualized spending, $240 million to $288 million, runs 12 to more than 14 times the size of the proposed increase. The request was submitted while South Carolina's FY 2026-27 budget bill, H.5126, moved through the General Assembly⧉ -- passed by the House on March 11, 2026, by the Senate on April 23, and amended again by the House on May 6 -- though the bill's own legislative record does not show whether that specific increase survived any of those votes.
- DSS paused new applications to the Child Care Scholarship Program's Working Families track on December 1, 2025, telling the Legislative Audit Council the program spends $20-24 million a month and it 'cannot spend money that it currently does not have.'
- More than 1,900 child care providers statewide were enrolled to accept scholarships when the pause began; families already approved keep their full 52-week award, and eight protected categories -- current and transitioning-off families, homelessness, domestic violence, special needs, child welfare, SC First Steps 4K, and Head Start -- still qualify for new awards.
- DSS's proposed fix -- a $20 million recurring increase in its 2026-27 budget request -- is roughly the size of one month of the program's own reported spending, and 12 to 14-plus times smaller than the program's full annualized cost.
- The request moved through the same legislative session as South Carolina's 2026-27 budget bill, H.5126, which the House passed in March, the Senate passed in April, and the House amended again in May 2026 -- with no public confirmation in the bill's own record of whether the increase was included.
The pause details, monthly spending figure, funding request, and protected-category list all trace to the South Carolina Legislative Audit Council's June 2026 report (LAC/24-5), which reproduces DSS's own public notice and cites DSS staff statements directly; this piece independently computed the request-to-month and request-to-annualized-spend comparisons from those same reported figures. The 2026-27 budget bill's procedural timeline comes from the South Carolina Legislature's own bill-tracking record for H.5126; that record does not indicate whether the child care funding increase specifically was included in any version of the bill, and this piece does not claim to know the outcome.
Sources(2) ▾
- South Carolina Legislative Audit Council, A Limited Review of Licensing and Oversight of Child Care Providers by the S.C. Department of Social Services (LAC/24-5) (2026-06-01) — The Legislative Audit Council's June 2026 review of DSS's child care licensing and oversight -- Chapter 3 ("ABC Quality Program") is the source for the Child Care Scholarship Program's December 2025 application pause, the program's $20-24 million monthly spend, DSS's stated reasons for the pause, the $20 million recurring FY2026-27 funding request, the protected-category exemptions, and background on the ABC Quality rating system itself. lac.sc.gov · original document
- South Carolina Legislature (South Carolina State House), H. 5126, General Appropriations Bill for Fiscal Year 2026-2027 -- Legislative History (2026-05-06) — The Legislature's own record of H.5126, the FY2026-27 state budget bill, showing it moving through the House and Senate (introduced, passed by the House, reported by Senate Finance, passed by the Senate, amended by the House) during the same window DSS's $20 million recurring child-care scholarship request was pending -- source for the budget bill's own timeline, independent of the audit report. scstatehouse.gov · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
South Carolina's Department of Social Services paused new applications to its Child Care Scholarship Program's Working Families track on December 1, 2025⧉, telling the state's own watchdog -- the Legislative Audit Council, the South Carolina Legislature's independent oversight agency -- that the program spends $20 million to $24 million every month and that DSS 'cannot spend money that it currently does not have.' More than 1,900 child care providers across the state were enrolled to accept the scholarships when the freeze took hold.