Your 1st Contract Explained

What to Expect from your First AFU Funding Year
 

Your First Contract Explained

Overview

Your 1st AFU contract often looks different from renewal contracts, and that confuses almost everyone. It might be longer, shorter, or an unusual dollar amount (not the standard $6,000 or $22,000). This is based on when your child’s funding starts relative to their birth month. Understanding these rules helps you plan purchases, avoid surprises, and maximize your funding window.

Three things determine your first annual funding amount:

  1. When CYSN received your paperwork (funding start month)
  1. Your child’s birth month (funding end month)
  1. Whether your child will turn 6-years-old during the contract (see Section 1.
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Quick Context
AFU funding years (”annual funding periods”) run from your child's birth month to birth month—not January to December. Your first contract bridges the gap between your funding start date and this annual cycle.
 

The 6-Month Merge Rule (Why Contracts Vary)

AFU uses a 6-month cutoff to decide your first contract length.

→ If the gap between funding start month and birth month is ≤ 6 months:

AFU combines the remaining months with the next full year and you get one long 1st contract (up to 18 months). A longer first contract means more money, but also more time before your next funding refresh. Budget carefully.

→ If the gap between funding start month and birth month is 7-11 months:

You get a short contract, then a normal renewal. First contract covers just those 7-11 months, and the next contract is a standard 12 month funding period.
EXAMPLE 1
  • Funding starts in March
  • Child born in July (4-month gap)
1st Contract: March to July of next year
= 16 months 
= 16 x $1,833.33 (under-6 amount)
= $29,333.00
EXAMPLE 2
  • Funding starts in October
  • Child born in July (9-month gap)
1st Contract: October to June 30
= 9 months
= 9 x $1,833.33 (under 6 amount)
= $16,500.00

Calculating your 1st Annual Period Amount

The Formula

1st Contract Amount = # of Months x Monthly Rate
Age
Monthly Rate
Annual
Under-6
$1,833.33
$22,000
Over-6
$500
$6,000
 

Funding Period End Dates & the Birth Month Rule

A common misconception: “My child’s birthday is May 12th, so funding ends May 12th.”
  • ❌ Wrong: Funding continues through the entire birth month, and renews for the next annual period on the 1st of the following month.
  • ✅ Correct: In the example above, funding would end May 31st (last day of May).This would give the caregiver almost three (3) extra weeks in this example.

Example 1

Child’s Birthday: Oct 27
Annual Funding Period: Nov 1 → Oct 31

Example 2

Child’s Birthday: April 11
Annual Funding Period: May 1 → April 30