Report to the Congress on Kinship Foster Care. Costs and Sources of Funds for Kinship Care


While all kin are eligible for child-only grants under the Temporary Assistance for Needy Families (TANF) program,22 state foster care payments to public kinship caregivers are directly related to how they are licensed. Some States have different payments for each licensing standard. Others pay families in the same licensing category at different rates. For instance, Missouri automatically provides foster care payments to grandparent caregivers, regardless of the IV-E eligibility of the children they care for, but aunts and uncles must care for IV-E-eligible children in order to qualify for a foster care payment.

The three States that do not allow kin caring for non-IV-E-eligible children to be fully licensed also prohibit kin from receiving foster care payments. Of the 40 States and the District of Columbia that permit kin to be licensed under different standards from non-kin, 21 States and the District of Columbia provide foster care payments to kin who meet the standards (Boots and Geen, 1998).23 States that do not provide foster payments provide a TANF or other payment that is generally less than the foster care rate.

State policies for supporting kin can inadvertently create financial incentives and disincentives that run counter to the goals of child welfare systems and create inequities for families within the system. Policy makers have argued that the existing framework for financing kinship care may provide an incentive for parents to abandon their children so that kin can get a foster care payment that is much higher than the TANF grant the parents receive to help them care for the children. Moreover, some experts have argued that the higher foster care payment rate may provide an incentive for private kinship caregivers to become part of the public child welfare system (Berrick, 1998; Johnson, 1994). In Maryland, for example, a child being cared for by a relative licensed as a foster caregiver would have received $535 to $550 a month for care in 1996 (APWA, 1998), whereas a child being cared for by a welfare-assisted relative would have received only $165 a month in a basic child-only grant. These differences become even greater when there are multiple siblings in care, since the welfare payment is prorated on a declining scale and foster care payments remain constant regardless of the number of children in the household. Consider Maryland again. Two children living with relatives licensed by the foster care system would have received $1,070 to $1,100 a month in 1996; two children financed by that State’s AFDC program would have received $292 a month.24 Researchers have also noted that financial support may drop by 50 or even 75 percent when a child in kinship care moves back with parents who are eligible only for TANF. This may present parents with a disincentive to resume care of their children (Takas, 1994).

Similar discrepancies arise with other services provided by the child welfare system. For instance, counseling for children who have experienced abuse or neglect may be available to children in the child welfare system at no cost to the family, but private kinship families must find and fund counseling on their own. States continue to struggle to balance the incentives and disincentives created when the only way to obtain access to and afford services as a kinship caregiver is to have the State take custody of the child.

There are no data on how many kinship caregivers living in States that offer multiple licensing options actually receive foster care payments. Moreover, while all kin are eligible to receive TANF grants, no one knows how many public kinship caregivers receive such grants, either in the form of child-only grants or as part of a family grant. While data show that public kinship care families are significantly more likely than non-kin foster families to receive other public benefits (Chapter 3), there is no information on how many receive benefits or the amount of benefits they receive from Supplemental Security Income, Medicaid, the Food Stamp Program, or Emergency Assistance. Likewise, data show that public kinship care families receive fewer services from child welfare agencies than non-kin (Chapter 4), but the exact financial implications of these data are unclear. Thus, it is not possible at this time to estimate the costs of public kinship care or even to compare such costs to those of non-kin foster care.

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