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Foster Care Funding and Federal Programs

The Social Security Act contains the primary sources of federal funds available to states for child welfare, foster care, and adoption activities. These funds include both nonentitlement authorizations (for which the amount of funding available is determined through the annual appropriations process) and authorized entitlements (under which the federal government has a binding obligation to make payments to any person or unit of government that meets the eligibility criteria established by law).

Family preservation services are intended for children and families, including extended and adoptive families, that are at risk or in crisis. The following is a list of the services included.

  • Programs to help reunite children with their biological families, if appropriate, or to place them for adoption or another permanent arrangement
  • Programs to prevent placement of children in foster care, including intensive family preservation services
  • Programs to provide follow-up services to families after a child has been returned from foster care.
  • Respite care to provide temporary relief for parents and other care givers (including foster parents) - respite care families sign up to take children in for a period of time to help decrease the stress on families
  • Services to improve parenting skills

The foster care program is a permanently authorized entitlement that provides open-ended matching payments to states for the costs of maintaining certain children in foster care, and associated administrative, child placement, and training costs.

Where Does The Funding Come From?

The federal government provides funds to states to administer child welfare programs. While the federal government controls foster care operations, it’s the non-profit state licensed organizations that receive the funding. State grant programs have their own matching requirements and allocations, and all require that funds go to and be administered by state child welfare agencies, or in some programs, Indian tribes or tribal organizations. In most states, foster children are eligible for Medicaid cards which cover medical, dental, and counseling services. Foster children have the same minimum health benefits as children in the Aid to Families with Dependent Children (AFDC) program. Most federal funds for AFDC and foster children's health care come through Federal Medicaid (Title XIX of the Social Security Act).

How Can Foster Parents Use the Funding?

Foster parents receive reimbursement for the child's food and clothing. Some states provide a clothing voucher at the time of the child's first placement. Others provide clothing vouchers at the beginning of each school year. Foster parents may also receive subsidies by the state on a monthly basis. The amount of subsidies is usually based on the number of children being fostered in one home, a child's medical needs, and age. Along with food and clothing, foster parents can use subsidies for extracurricular activities, transportation, and personal products for the foster child. However, before becoming a foster home, potential foster parents must prove that they have enough of a stable income to provide for a foster child and should not rely solely on subsidies.

For more information on the specifics of foster care and the different types of foster care, visit Findlaw's Foster Care Overview page.

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