NTEU and the IRS have reached an agreement to modify the Childcare Subsidy Program (Article 56) by increasing the annual Total Family Income (TFI) thresholds.

We are very pleased to report that the IRS and NTEU have reached a Side Letter agreement that modifies the TFI limits for employees who apply for the Childcare Subsidy Program open season that runs from May 1, 2023 to May 30, 2023 (more information will be forthcoming on the open season soon). The changes should significantly increase the number of employees who will be eligible to receive the negotiated benefits of the Childcare Subsidy Program contained in Article 56, Section 2 of the 2022 National Agreement. Last year after the program was implemented, the agency reported that about 700 bargaining unit employees were deemed to be eligible. The data showed many employees who applied were found ineligible due to the TFI cap of $90,000. In Article 56, the parties agreed to meet annually to discuss funding, participation rates and potential adjustments to the program.

As a result of those discussions the parties agreed to the following:

Annual TFI — Existing Language Annual TFI — Side Letter Language

Tier 1 – $70,000 or less Tier 1 - $90,000 or less

Tier 2 – $70,000 to $80,000 Tier 2 - $90,001 to $120,000

Tier 3 – $80,001 to $90,000 Tier 3 -$120,001 to $150,000

Under the new Side Letter language, all employees with a TFI of $150,000 or less will be eligible for a monthly childcare subsidy so long as they meet the other eligibility criteria in Article 56.

The parties also agreed to bump up the annual amount of the CCS for employees in Tiers 2 and 3, from $4,500 to $4,700 for Tier 2 (with a monthly amount of $391.66); and from $4,000 to $4,200 for Tier 3 (for a new monthly amount of $350).

We believe this agreement will result in many more employees being eligible for the subsidy. This program was proposed by NTEU for the 2022 NA as a way to both help bargaining unit employees offset the high costs of childcare; and to help the IRS with recruitment of new employees and the retention of current employees.