KEY POINTS
- Title IV-E foster care eligibility has declined over time as eligibility requirements remain tied to income thresholds from 1996. From fiscal year 2011 (FY11) to FY24, the percentage of caseloads eligible for Title IV-E foster care maintenance payment (FCMP) reimbursement funds – the funds that help cover costs like shelter, care, and clothing for children – has declined by around 45 percent.
- The average monthly reimbursement amount states claimed for Title IV-E foster care eligibility determinations has increased by over 60 percent from FY11 to FY24, with fewer children being eligible for assistance.
- The total reimbursement amount states claimed for eligibility determinations increased to over $198 million in FY24, exceeding the total reimbursement amount claimed by states for Title IV-E prevention services.
- The Children’s Bureau conducts Title IV-E foster care eligibility reviews to determine if federal funds are being properly spent on eligible children and to provide feedback to Title IV-E agencies on opportunities for program improvement related to payment integrity.
- 39 states have not achieved substantial compliance for at least one Title IV-E eligibility review – meaning more than 4 out of the 80 cases examined during a review contained errors. Eighteen of these states have not achieved substantial compliance during multiple reviews.
- Since FY00, there have been 11 years in which at least one-fifth of states under review have not been in substantial compliance.
- Eligibility determinations are increasingly costly despite shrinking eligibility, and are complex, as evidenced by state compliance issues that remain 30 years after eligibility became tied to 1996 AFDC financial need standards.
BACKGROUND
This brief synthesizes national caseload and expenditure data related to Title IV-E foster care eligibility and summarizes the Children's Bureau's published Title IV-E foster care eligibility review findings. It finds that foster care maintenance program eligibility has shrunk over time while administrative costs have risen, as Title IV-E foster care eligibility continues to be dependent on 1996 Aid to Families with Dependent Children (AFDC) financial need standards. This brief also examines the Title IV-E foster care eligibility reviews process, highlighting the prevalence of states achieving substantial compliance during reviews and differences in findings between county- and state-administered child welfare models. Review findings are presented as national patterns rather than performance trends, since review instruments, policies, and conditions have shifted considerably over 25 years.
Declining Eligibility
The Title IV-E foster care program offers reimbursement funds to states and Tribes for the purpose of providing foster care to children who qualify as eligible for assistance. To qualify, a child must be in licensed/approved out-of-home care, enter through voluntary placement or judicial determination, and come from a family that would have been considered "needy" under 1996 AFDC standards with assets under $10,000. These standards have not been updated since 1996 and have not accounted for inflation; at least in part as a result of this, eligible caseload shares have declined from roughly 60 percent (FY11) to 33 percent (FY24). Average monthly caseloads claiming FCMP fell about 25 percent over the same period. States with higher percentages of caseloads eligible for Title IV-E FCMP reimbursement funds may be associated with having higher AFDC income limit thresholds.
Rising Determination Costs
From FY19 to FY24, the percentage states claimed for eligibility determinations grew from around five percent to just under eight percent of their in-placement administration expenditures. From FY11 to FY24, the reimbursement amount states claimed for eligibility determinations increased from around $122 million to over $198 million. Costs per child varied widely by state in FY24 — the average monthly amount each state claimed for reimbursements on eligibility determinations was $38.82 per child and the median amount was $14.75 per child. 13 states claimed an average monthly amount of over $50 per child.
Eligibility Reviews
The Children’s Bureau conducts Title IV-E foster care eligibility reviews as a part of their overall monitoring process that aims to ensure Title IV-E agencies are in compliance with certain requirements related to child and family services programs in the Social Security Act. Title IV-E agencies are reviewed at three-year intervals. Eighty foster care cases are examined; if more than four cases contain errors, the agency is found to not be in substantial compliance with eligibility requirements.
Since FY00, 39 out of 52 states have not been in substantial compliance for at least one Title IV-E eligibility review. In FY24 and FY25, a total of 13 – or over two-fifths – of these states did not meet the criteria for substantial compliance. Examples of errors included placements lacking full licensing, incomplete safety checks or fingerprinting, and claims made after a child's discharge.
Over the last 25 years, technical changes have been made to the Title IV-E eligibility reviews process, so it is difficult to assess changes over time in performance for particular states or to compare substantial compliance rates across years.
County vs. State Administration
States with county-administered models (including those using a hybrid model) have a higher rate of achieving substantial compliance in their Title IV-E eligibility reviews than states with state-administered models since FY00.
CONCLUSION
Eligibility determinations are increasingly costly despite shrinking eligibility. Eligibility determinations are also complex, as evidenced by state compliance issues over the course of the 30 years since eligibility became tied to 1996 AFDC financial need standards. There may be opportunities to improve Title IV-E foster care eligibility processes to ensure resources are being utilized effectively to meet the basic needs of children in care and to promote states' ability to comply with existing federal policies and regulations while reducing administrative burden.
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