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


The relationship between foster care payments with federal matching funds and adoption subsidies with federal matching funds was examined to determine whether variations in the use of federal matching adoption subsidies were related to state variations in establishing children's IV-E eligibility at the time of entry to foster care. Table A-6 shows that 74.3 percent of adopted children receive subsidies while only 48.3 percent of children in nonrelative foster care placements receive payments with federal matching funds. Examination of state data shows us that only 11 states reported the proportion of adopted children with federally-supported subsidies was within 10 percent of the proportion of foster children with federal matching payments.

The remaining states varied widely in these two measures, as illustrated by the last column in the table, the ratio of foster care payments to adoption subsidies. At one extreme, Connecticut reported that their proportion of children receiving federal support for foster care payments was nine times higher that of the proportion of adopted children receiving federal plus state subsidies. Other states reported that the federal adoption subsidy rate was significantly higher compared to the federal foster care payment rate, e.g., Washington DC and Michigan. Data reported for Nevada and Texas also indicate that the proportion of adopted children receiving federal adoption subsidies is significantly higher compared to the proportion of foster care children in nonrelative care who receive foster care payments. However, these data should be interpreted with caution due to possible reporting errors. All of the ten largest states reported higher federal adoption subsidy rates compared to foster care payments. The following section compares the amount of subsidies and payments provided to adopted and foster care children.

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