Understanding Adoption Subsidies: An Analysis of AFCARS Data. Comparison of Adoption Subsidy and Foster Care Payment Amounts


For adoption subsidies funded by Title IV-E, the subsidy amount is capped at the level of the foster care payment that a family would receive on behalf of a child. However, adoption subsidy rates that are set lower than foster care payments could represent a disincentive for foster families to adopt a child if foster parents are concerned about whether they could meet a child's needs after adoption. To assess whether this potential barrier exists, we compared the median adoption subsidy amounts with the median amount received by children in foster care on a national and state level.

This analysis uses data from the AFCARS foster care file (for foster care payments) and adoption file (for adoption subsidy amounts). Because individual children who exit foster care to adoption cannot be traced from one file to another, the population examined in each file was restricted in order to increase their comparability to the extent possible. Analysis of foster care data was limited to those in a pre-adoptive home or non-relative foster home. The analysis of adopted children includes only those who were adopted by a non-relative.

Table A-9 shows that nationally, the ratio of median adoption subsidies to median foster care payments was 0.8 (bottom row of table). However, when we examine these data for each state, the ratio of adoption amounts to foster care amounts varies widely among one-half the states. Twenty-one states show a difference greater than 10 percent between adoption and foster care median amounts. Fifteen of these states have a lower median adoption amount compared to foster care median; the lowest ration was 0.2 in Kansas. However, the foster care data in Kansas should be interpreted with caution due to possible errors in data reporting. Six states(9) showed higher median adoption amounts compared to foster care payments, with the highest ratio (1.3) seen in Arizona (median adoption subsidy was $479; foster care median was $358). This may reflect state supplementation of adoption subsidies beyond the level eligible for federal support, population differences between children in foster care and adopted children, or data quality issues. Patterns were consistent across age groups with few exceptions.

None of the eight largest states,(10) reported higher median adoption subsidies compared to median foster care payments; four reported the same or less than a 10 percent change in amounts, and four states reported lower median adoption subsidies compared to foster care payments.

A previous comparison of states' basic monthly adoption assistance rates and basic foster care rates found that 33 states allow adoption subsidy rates to be equal to or greater than their foster care rates (Bower and Laws, 2002). They reported that in twelve states monthly adoption subsidies were higher than monthly foster care payments, possibly due to the addition of county or state funds or the use of more recent adoption subsidy data in conjunction with older foster care data. These data do not reflect supplemental payments that may be made for children with higher levels of needs in either foster care or adoption.

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