Reducing parental stress and adding more trusted adults into a family ecosystem reduces child maltreatment

By Elliot Haspel, Guest Contributor

Reducing parental stress and adding more trusted adults into a family ecosystem reduces child maltreatment

American child care debates tend to organize around two arguments.

The economic case, parental (and especially maternal) labor force attachment, and the ways in which accessible child care impacts businesses and the economy writ large.

And the early childhood development case, which focuses on how good child care, or the lack thereof, impacts the rapidly growing brains and school readiness of young kids.

There is, however, a structural blind spot in the discourse: child care access plays a load-bearing role in the infrastructure that can keep children safer and families out of the child welfare system.

The evidence is substantial, and largely absent from how child care policymakers, advocates, and funders currently calculate the case for investment.

Two Mechanisms, One Overlooked Connection

There are two primary mechanisms by which child care intersects with child welfare: parental stress, and the presence of trusted adults in a family’s ecosystem.

The stress mechanism is direct.

Reduced family well-being dramatically spikes the risk of child maltreatment; when a parent is at the end of their rope and lacks an ecosystem of support, it is more likely they will take harmful actions.

The lack of affordable and accessible child care can be an isolating hammer-blow to family well-being.

Not only are there clear effects on financial security (and therefore vital elements like housing and food stability) but research has found that managing the search for and precariousness of child care is itself a significant psychological burden.

The impacts are worst for mothers, for whom unstable, unreliable child care is correlated with harms to mental health that can last six years or more.

The second mechanism is less visible but equally important.

Child care programs are often essential hubs through which new parents build informal safety nets — friendships, emergency backup care, and key parenting knowledge such as safe sleeping practices.

When child care is inaccessible, those networks don’t form.

Sociologist Mario Small has documented how central these programs are to that connective tissue.

That social isolation, combined with precarious shift work, can also lead to reliance on unsafe care arrangements, such as leaving children home alone or with adults unequipped to care for them.

What the Data Show

When child care breaks down, the effects can be severe.

Colorado’s Child Fatality Review Team has identified so many deaths correlated with a lack of child care that it made a formal recommendation that the state ensure “affordable and accessible child care for all families.”

Between 2013 and 2017, the Team identified 223 child maltreatment deaths that might have been prevented with adequate child care available.

The positive impacts of solving America’s child care challenge on child welfare, then, are also sizable.

A research team led by Dr. Henry Puls calculated that a major national investment in child care — akin to what was proposed in the Build Back Better legislation, approximately $400 billion over six years — “might reduce” child welfare:

• Investigations for suspected maltreatment by 6.4 percent,

• Victimization by 6.0 percent,

• Foster care entries by 3.1 percent,

• Maltreatment-related fatalities by 11.6 percent.

Puls’ team applied these estimates to real child welfare data from 2014-2019 and found it would yield a “striking number of potentially safer children”:

• 1.3 million fewer children investigated

• 244,000 fewer children substantiated as victims

• 9,000 fewer children entering foster care

• 1,198 fewer deaths.

Why the Blind Spot Persists

The curious absence of child welfare from discussions of child care policy can likely be tracked to a few sources.

Child welfare and child care advocates are more cousins than siblings: they may occasionally come together, but largely live apart.

That separation is both caused by and a cause of siloed federal funding streams.

This is also a symptom of a more program-focused approach to family policy that was cemented during 1990s welfare reform, as opposed to an ecosystem approach that understands and responds to the myriad influences on family well-being.

That shift has created a structural divergence which has led to downstream fragmentation of policy and advocacy communities.

Similarly, the philanthropies which both issue communities depend on rarely work across both domains, despite often having overlapping priorities.

And economists asked to calculate the benefits of child care investments are almost never asked to incorporate the effects on child welfare, or the savings from meaningfully reduced investigatory caseloads and foster care placements.

As a result, the researchers, advocates, and messengers in each domain are optimizing for their own audiences, and the connection between the two rarely gets made or resourced.

For instance, since higher income eligibility limits for child care subsidy has been linked to lower child maltreatment rates, taking a broader view may reduce the functional cost of raising those limits and make state legislatures more inclined to fund them.

Similarly, most states give some form of subsidy priority to families who are referred by state or local welfare agencies.

But given enrollment freezes and a lack of available slots in many areas, states may need to get more creative to ensure that when such a case arises, child care needs can actually be addressed.

A Solvable Problem

The structural barriers are real but not immovable.

Philanthropies — perhaps through existing collaboratives like the Children, Youth & Family Funders Roundtable — could set tables where child care and child welfare advocates and policy experts can come together to identify a common agenda and a more comprehensive accounting of benefits.

Advocates and wonks, of course, can initiate these conversations themselves, and ensure that child welfare gains are included in their analyses.

State child welfare directors could walk across the hall to state child care administrators and have a similar conversation, and vice versa.

Congress could hold a hearing or ask the Congressional Research Service, Government Accountability Office, or relevant agencies to research the intersection to inform future thinking on policy focus and approach.

Demonstrating the stark impacts that child care has on child welfare make the stakes for decision makers clear.

Public investment in child care doesn’t just impact workforce participation or child development; it’s also an upstream factor that shapes family stability and child safety.

Decisions shaping philanthropic investment, policy design, and advocacy strategy that don’t include this awareness are missing an essential element that matters for both policy communities and, most importantly, for families.

It’s time to illuminate the blind spot.

Elliot Haspel is a Senior Fellow at Capita and author of The Family Frontier, which focuses on child care and early childhood policy.

How many homes does each state have for every child in foster care?1

By Laura Radel, Senior Contributor

Editor’s note: This is the first in a three-part series examining where states stand on ACF’s Home for Every Child ratio goal.

Parts two and three will be available exclusively to Wonk Briefing Room members.

We’ve been examining the constraints facing the Administration for Children and Families’ (ACF) A Home for Every Child initiative.

That includes the limits of the 1:1 ratio as a metric to the behavioral health ceiling that shapes what foster homes can actually sustain.

This piece adds a foundational piece to that picture: a state-by-state benchmark of where things actually stand today, and from which all states will start

ACF’s A Home for Every Child initiative sets the goal that states have at least as many foster homes as there are children in foster care – a 1:1 ratio.

As we’ve previously described, that’s about double the current ratio of homes to children nationally.

But we know national averages often mask significant state variability.

So, where does each state stand on this goal today?

There is no authoritative federal data on states’ stock of licensed foster homes.

The best data on the topic has been collected by The Imprint’s Who Cares: A National Count of Foster Homes and Families, which has tracked foster homes counts from states since 2019.

This analysis is based on the Who Cares counts of foster homes, and on federal AFCARS counts of children in foster care.

For each year we calculate the ratio of foster homes available on March 31 of a given year in the Who Cares data to the AFCARS count of children in care the previous September 30.

These September AFCARS figures offer a representative and official indicator from which to benchmark.

The National Picture

First, let’s start with the national picture.

Nationally, the number of foster homes declined from about 212,000 in 2018 to 178,000 in 2025 – a loss of 36,000 homes or 17 percent.

Most of that decline has occurred since 2022.

There were 0.53 foster homes in 2025 for every child who was in foster care on September 30, 2024.

The ratio has been increasing incrementally in recent years, from 0.51 in 2019 to 0.53 in 2025.

That national figure masks enormous variation across states.

Where Every State Stands

No state currently achieves the 1:1 ratio goal.

However, six states come close:

• California

• Idaho

• Pennsylvania

• Vermont

• Virginia

• Wyoming

Each has ratios of 0.8 or higher

States range from a low of 0.21 in Arizona to 0.93 in Idaho.

There are 26 states with ratios greater than 0.5, which means they currently reach at least half of ACF’s goal.

There are 12 with ratios greater than 0.66, or about two-thirds of the way to the goal.

Always Be Closing: Why the Gap Persists

Most states have a long way to go to meet ACF’s challenge of achieving a 1:1 ratio of foster homes to children who need care.

Gains needed in most states far outstrip any changes in either the supply of foster homes or the decline in children in care in recent years.

In the states with ratios below 0.5, meeting the goal of a 1:1 ratio would require doubling or more the number of licensed foster homes, halving the number of children in foster care, or some combination in between.

We’ll explore this dynamic in greater depth in a forthcoming piece.

In addition, high turnover among foster parents means many more new foster parents would be needed than are apparent from calculations like those presented here.

That’s because recruitment would need to account for turnover.

There’s also a supply-side risk worth watching.

If states add hundreds or thousands of new foster homes to their supply while further decreasing the number of children in foster care, and continuing to follow best practice of placing siblings together whenever possible, many of those new homes will never see a child placed in them.

That could manifest as mirage; as we’ve examined, raw home counts don’t measure how well matched a home is to the unique needs of:

• Sibling groups;

• Older youth; and

• Children with complex behavioral health needs.

A ratio alone won’t tell us if the supply is matched to the population’s needs.

The Road to 1:1

A Home for Every Child is now the organizing principle behind all major ACF child welfare policy initiatives.

Seeing it clearly, state by state, is essential for looking at what’s possible and what’s next.

The next two pieces in this series will go deeper on both the trajectory and the math.

The second will examine how the ratio has changed over time in each state: which states are gaining ground, which are losing it, and how fast.

The third will model what it would actually take to reach 1:1 under different strategies.

Several states have announced their participation in ACF Assistant Secretary Adams’ challenge to strive toward a 1:1 ratio with more likely to follow.

For most, the starting line is farther back than the goal may suggest.

Subsidized guardianship is often a successful permanency option for relatives not interested in adoption, but financing policy impedes its deployment federally.

By Laura Radel, MPP, Senior Contributor

States fund nearly half of all guardianship subsidies out of their own pockets, even though Congress created a federal match program in 2008.

As states increasingly rely on kinship care to keep children connected to family, it’s critical to understand why there’s a gap between what federal law versus states fund and why.

GAP 101

The Guardianship Assistance Program (GAP) was added to the Title IV-E statute by the Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110-351).

GAP allows states to receive federal reimbursement for monthly subsidies when a child in foster care exits to a legal guardian, often a relative, who was their licensed foster parent.

By 2023, 42 states, the District of Columbia, Puerto Rico, and 11 Indian tribes operated GAPs and claimed federal match for guardianship subsidies on behalf of over 45,000 children.

That same year, states also reported they served an additional almost 36,000 children in subsidized guardianships outside the IV-E program.

For those guardianships, the state paid 100% of the guardianship payment.

That means 45 percent of states’ guardianship payments did not include a federal match. In addition, states’ use of the program is quite variable.

Why is that the case?

Guardianship is a permanency path states want, but federal eligibility cuts it off for thousands of kids.

States’ Use of the Title IV-E GAP Program

Unlike foster care and adoption programs that are required by federal law, guardianship programs are optional.

Most states have decided to use subsidized guardianships as a strategy to keep children in their birth families.

However, several states–including Arizona, Delaware, Georgia, Kansas, Kentucky, Mississippi, New Hampshire and Utah– have chosen not to operate GAPs.

Ohio has an approved GAP plan but, as of 2023, had not submitted any program claims.

Of those operating IV-E GAP programs, nearly all report both matched IV-E guardianships and unmatched guardianships that are not part of the IV-E program.

How States Stack Up

The national picture is split: just over half of subsidized guardianships get a federal match (56%), while nearly as many (46%) are on the state’s dime.

But the caseload isn’t evenly spread. California (25%), Missouri (12%), and Texas (9%) alone account for almost half of all IV-E GAP kids nationwide.

Missouri stands out in particular — it has a much smaller foster care population than other large states, yet it leans heavily on guardianship as a permanency path.

At the other end of the spectrum, some states barely use the federal program.

Wyoming (3%) and Nebraska (5%) rely almost entirely on state dollars, while Idaho (94%) and Nevada (85%) go nearly all-in on GAP.

A handful of states — Alabama, North Carolina, Washington, and Vermont — report no state-only guardianships, meaning every child in guardianship gets a federal match.

New York and Illinois, by contrast, operate GAP but post surprisingly small caseloads given the size of their foster care systems. See the Figure below for more information.

Unmatched Guardianships

State-only subsidies fill the gap for children who can’t qualify for federal guardianship assistance. Who gets left out?

• Grandfathered Out.

  • Children who entered guardianship before the state participated in the federal IV-E Guardianship program.

  • This population is getting smaller as the GAP program matures.

• Income Excluded.

  • Children whose birth families were not income-eligible for title IV-E when the child entered foster care.

    • As has been described in previous issues of The Wonk, this population has grown in recent years because of the lookback date which locks states into outdated income rules from 1996 that do not adjust with inflation.

    • States can do nothing to affect this eligibility criterion.

• Unlicensed Kin

  • Children whose prospective guardian is not a licensed foster parent are ineligible.

  • Regulations finalized in 2023 allow states to develop specialized licensing criteria for these families to streamline the licensing process without sacrificing safety, and more are seeking this pathway.

• Lower-Rate Workaround.

  • Keeping relatives unlicensed allows a lower state-only subsidy rate than the federal GAP program — a budget reality that leaves some kin with less.

• Too Quick To Exit?

  • Federal law requires six months in licensed relative foster care before GAP kicks in.

  • Families ready to step up sooner — often before the system is even involved — must either wait it out in foster care or make do with TANF child-only payments, which are often half the size of a guardianship subsidy.

  • This creates a perverse incentive: keep kids in foster care longer to secure funding, or push for faster permanency and lose federal support.

  • Either way, children and kin caregivers pay the price.

Bottom Lines

Many states’ guardianship programs continue to be relatively small and have room to grow over time as they develop their capacities working with kin.

For states that begin using the increased flexibility in licensing relative foster homes, eligibility for Title IV-E guardianship subsidies is likely to increase, making guardianship a more attractive option financially for states.

But federal financing remains the rate limiting step; without change to either the lookback date or time in care requirements, there will continue to be a significant population of children living stably with kin who are not eligible for the IV-E GAP program.

By Laura Radel, Senior Contributor, Child Welfare Wonk

Medicaid covers virtually all children in foster care — but the policy shop Congress created to shape Medicaid and CHIP rarely shows up in child welfare conversations. 

That’s a gap with consequences. 

For folks interested in learning more about the funding, access, and service delivery side of the foster care equation, MACPAC’s work is a lever hiding in plain sight.

What MACPAC is

MACPAC is a small, non-partisan, legislative branch agency established by Congress to analyze and advise Congress and the Department of Health and Human Services (HHS) on issues related to Medicaid and the Children’s Health Insurance Program (CHIP). 

Medicaid and CHIP cover virtually all children in foster care and those who have adoption assistance agreements, as well as many other children who interact with the child welfare system. 

Congress requires MACPAC to explore a wide range of Medicaid and CHIP issues–including payment, eligibility, enrollment and retention, coverage, access to care, and quality of care. 

While it is well known in the health community, MACPAC as a resource and point of strategic engagement is under-utilized by child welfare professionals. 

The Overlap We Don’t Talk About

Children associated with the child welfare system, particularly children in the title IV-E Medicaid eligibility category, are among the highest-cost, highest-need Medicaid users. 

That means MACPAC’s deep dives on service utilization, behavioral health, and care coordination overlap greatly with the kids in the child welfare system– even if they’re never labeled that way.  

Analyses Worth Your Time, and Key Findings

MACPAC produces a range of analytical products, including reports, data briefs, and presentations to its commissioners. 

Below are some recent relevant analyses that can power your work, including key findings. 

• Health Care Access for Children in Foster Care (April 2025). 

  • What it Is: In this presentation to the Commission, staff presented findings from a study of health care access for children in foster care. 

  • What it Looked At: The analysis examined policies, approaches and experiences of seven state agencies. Key findings include: 

    • There’s no federal requirement for Medicaid–child welfare coordination which leaves collaboration to voluntary efforts, producing wide state variation.

    • Interagency data sharing isn’t mandated — and legal, technical, and financial barriers stall progress.

    • Workforce shortages in both agencies and provider networks choke timely behavioral health access.

    • Specialized managed care plans for foster youth reduce state administrative burden and enable population-specific quality tracking.

    • Mobile crisis and therapeutic foster care models braiding Medicaid and child welfare funds are promising tools for prevention and placement stability.

    • How to Use It: These findings can frame discussions about care quality and cost efficiency at the state and national level. 

• Annual Report Chapter on Access to Residential Treatment for Behavioral Health Needs. 

  • What it Is: A review of access to care for residential behavioral health services.

  • What it Looked At: While not specifically focused on youth in foster care, children involved with the child welfare system are particularly high users of residential treatment services. Key findings include: 

    • Residential care is rare — but disproportionately used by foster youth. 

      • In North Carolina, for example, they’re under 1% of the child population but up to 42% of PRTF placements, depending on the year.

    • The in-state bed hunt is brutal — and pushes kids out of state. 

      • States report making dozens of calls to find an in-state PRTF willing to take a child, with denials based on diagnosis, behaviors, or co-occurring conditions. 

      • Bed shortages, lack of specialty expertise, and higher payment rates for out of state patients contribute to access problems.

    • Data and workforce shortfalls keep the problem in the shadows. 

      • There’s no national data set tracking who gets residential care, who’s denied, or who’s stuck waiting. 

      • Meanwhile, facilities across states report closing beds or shutting down entirely because they can’t recruit and retain qualified staff — especially for kids with autism, I/DD, or complex co-occurring needs.

  • How to Use It: This is a resource for anyone working on policy issues related to residential care, community-based services, mental health, and permanency.

• Issue Brief on Behavioral Health Services for Youth in Foster Care. 

  • What it Is: This analysis, published in 2021, looks at the prevalence of certain behavioral conditions among youth who spent time in foster care as well as their Medicaid/CHIP coverage and access to services. 

  • What it Looked At: Key findings include: 

    • Nearly two-thirds of youth with foster care experience are on Medicaid or CHIP and receive behavioral health care at higher rates than their peers outside of foster care

    • Access to non-specialty mental health treatment was high and Medicaid and CHIP beneficiaries generally received mental health services at similar rates as their peers with private coverage.

  • How to Use It: This background can inform deliberations about mental health needs and access for youth in care.

• Report on Therapeutic Foster Care. 

  • What it Is: In 2019, MACPAC published a major report on Therapeutic Foster Care (TFC) services.

  • What it Looked At: Congress required the report to focus on whether a uniform definition of such services could improve care and treatment. 

    • MACPAC concluded that a single federal definition of therapeutic foster care could backfire by limiting state flexibility. 

    • MACPAC urged joint CMS–ACF guidance instead.

  • How to Use It: TFC continues to be an issue of interest for maximizing family-based placement, and this is a key element of those discussions. 

What’s Coming

MACPAC’s pipeline includes work on: 

• The safety and quality of residential treatment services, 

• The use of managed care for children in foster care,

•  Transitions from pediatric to adult care for children and youth with special health care needs, 

• Collaboration and data sharing between state Medicaid and child welfare agencies. 

If your professional portfolio relates to the physical or behavioral health needs of children in foster care and beyond, it is worth keeping an eye out for MACPAC’s work, including public meetings.

How states are slowly rewiring child welfare budgets

Kristina Rosinsky,* Child Trends

*This work is my own and does not necessarily reflect the views of Child Trends

Hot off the press! Child Trends has just released the latest Child Welfare Financing Survey data that covers state fiscal year (SFY) 2022.

This survey represents the only comprehensive source of information about how much child welfare agencies are spending, from what sources, and on what services.

The latest data give us insights into national and state-level trends as well as the early impacts of the Family First Prevention Services Act (FFPSA), the use of pandemic relief dollars, and other policy shifts.

Signal of a Shift Away from Out-of-Home Placements?

We are seeing early indications that states are shifting funds away from out-of-home placements.

In SFYs 2018 and 2020, states spent 46% of their total funding on out-of-home placements. But in SFY 2022, this dropped to 43%.

About half of that 3 percentage point change is going toward prevention.

Systems like child welfare are tremendously difficult to shift– think turning a cargo ship.

This seemingly small change may signal the beginning of a potentially significant shift toward keeping families together through services.

We will continue to track this over time to see if the trend persists.

Conserving Child Benefits

Another noteworthy trend involves the use of children’s Social Security benefits by child welfare agencies.

Income from various child benefits, like Supplemental Security Income and Social Security Disability Insurance, can be used by child welfare agencies to offset their costs. However, this practice is controversial.

On one hand, people argue that these are benefits to which children are entitled and children should not be charged for their foster care.

Others argue that without a fiscal incentive, child welfare agencies may not undertake the time intensive work to help children access these benefits in the first place.

In recent years, several states have enacted legislation to stop child welfare agencies from using child benefits to offset agency costs.

We are seeing this shift reflected in spending data: the SFY 2022 data show a 22% reduction in child welfare agency expenditures of child benefits and family income (like child support) since SFY 2020.

This amounts to millions of dollars in child benefits no longer being used by child welfare agencies to pay for the cost of foster care.

It is an open question as to whether those funds are now being conserved for the child or their caregiver to support their transition back home and to adulthood, or whether the funds are simply not being accessed at all.

What This Means for Leaders

The data Child Trends just released can help child welfare leaders and partners take the financial temperature of their system and pinpoint areas that need further exploration.

No other source provides a comprehensive look at all the funding sources child welfare agencies are using and what they are spending those funds on.

State policymakers may see their state is using relatively little federal funding compared to similar states, and use that insight to maximize federal funds.

Advocates may see a significant decline in spending in a specific category and dig deeper to understand why that change occurred and how it is impacting families.

Philanthropy may spot opportunities for public-private partnerships related to system shifts that would benefit from outside capital.

We often find the data from the Child Welfare Financing Survey serves as the catalyst behind deeper explorations like these. So go forth and explore, fellow wonks!

As you review the latest products on the Child Trends website, do not hesitate to reach out; I’m always happy to chat about financing! (krosinsky@childtrends.org)

By Laura Radel, Child Welfare Wonk Senior Contributor

Title IV-E sets a federal match rate for foster care maintenance payments – determining how costs are split between the federal government and the state.

This match rate, known as the Federal Medical Assistance Percentage (FMAP), is designed to vary by state: the lower a state’s per capita income, the higher its FMAP.

But FMAP is only part of the equation.

The actual federal reimbursement a state receives also depends on how many children in foster care meet Title IV-E eligibility requirements.

This dynamic creates a disconnect between the match rate’s intent – to direct more help to poorer states – and its real-world impact, where effective match rates can be lowest in states with the highest FMAPs.

Match Rates in Theory

In the foster care program, maintenance payments – payments for the board and care of eligible children in foster care – are reimbursed at the Medicaid FMAP which varies by state.¹

FMAP varies by state, with higher rates for states with lower per capita incomes, and rates vary from 50 percent to 83 percent.

Match Rates in Practice

States’ actual reimbursements depend on two important factors:

1. The state’s FMAP

2. The eligibility rate – the proportion of children in foster care who qualify under Title IV-E.

This is where theory diverges from practice. States with higher FMAPs often have lower eligibility rates, meaning they qualify for a high federal match.

But it’s functionally a mirage, because it applies to a much smaller share of their foster care population.

Nationally the Title IV-E eligibility rate in 2023 was 35.8 percent, down from 67 percent in 2000.

States’ individual eligibility rates range from less than 10 percent to nearly 100 percent.

Why Eligibility Rates Vary

While there are several Title IV-E eligibility requirements, two factors shape these differences among states’ eligibility rates.

The Lookback Provision

The first is the income limit established by the so-called lookback provision, which locks states into the income eligibility rules used by the state’s welfare program in 1996.

Many states with high FMAP rates had very low income and asset limits, and after 30 years without inflation adjustments those income limits today mean even very poor families are often excluded.

Ineligible Placement Settings

The second is how many otherwise eligible children in foster care live in ineligible placement settings – that is, settings that don’t qualify for maintenance payments – including children living in unlicensed relative foster homes or ineligible congregate care placements.²

Some of the states with low FMAPs rarely license relatives as foster parents, excluding many children in relative foster care from Title IV-E eligibility.

Nominal Versus Effective Match Rates

While FMAP reflects a state’s nominal match rate, what really matters for following the funding is the effective match rate:

• FMAP × IV-E eligibility rate = effective match rate

For example, a state that receives 50 percent reimbursement for 40 percent of children in foster care effectively receives 20 percent reimbursement.

In 2023, the effective match rates varied from just 5.5 percent to 67.4 percent, depending on the state.

To illustrate:

• Alabama and Kentucky had nearly identical 77 percent FMAPs.

  • But Kentucky’s eligibility rate led to an effective match rate of 22.4 percent, nearly 9 percentage points higher than Alabama’s (13.8 percent).

• Pennsylvania, which had a much lower FMAP of 52 percent, had a higher IV-E eligibility rate, making its effective match (28.5 percent), about 6 percentage points higher than Kentucky’s, and nearly 15 percentage points higher than Alabama’s.

The figure below illustrates how states rank on both the nominal and effective match rates.

The map graphic shows how differences in nominal and effective match rates are distributed geographically.

Takeaways for Policymakers

This analysis reveals two key points.

The Federal Share is Much Smaller Than It Appears

Because only about a third of children in foster care nationally are Title IV-E eligible, the federal government pays a relatively small share of states’ overall costs for foster care maintenance payments.

In 34 states the effective match rate is less than 25 percent.

This is a core structural tension in child welfare financing; federal policy sets foundational rules while providing a minority share of financing.

Program Design Exacerbates States’ Uneven Footing

FMAP was designed to provide more support to states with fewer resources.

But eligibility restrictions — especially the outdated lookback rules — often mean those states receive less, not more.

Title IV-E eligibility rates are depressed by the lookback date, which, short of federal statutory change, states can do nothing to avoid.

Today the program’s income limits for a family of four range from just 14 percent of the federal poverty level to 89 percent, depending on the state’s 1996 welfare program rules.

In states that had the most restrictive rules, household incomes of less than $5,000 per year can render children ineligible for Title IV-E.

The Options States Have Under Current Policy

States can make choices that affect how many children are excluded from Title IV-E eligibility because of their placement settings.

Since the passage of the Family First Prevention Services Act (FFPSA), most states have decreased their use of congregate care and have licensed some existing settings as Qualified Residential Treatment Programs (QRTPs) to avoid loss of federal reimbursement.³

In addition, new regulations finalized in 2023 allow differential licensing standards for relative foster care placements and provide the opportunity for states to make more relative care Title IV-E eligible.

Key Takeaway

In policy debates, FMAP is often treated as a proxy for how much federal support a state receives. But focusing on FMAP alone misses a key part of the picture.

Eligibility rates are the real outcome to track, while FMAP serves as one input.

To understand federal foster care funding — and its shortcomings — we need to look at effective match rates (FMAP x Title IV-E eligibility rate), which reflect the actual share of costs reimbursed.

And those rates show that many states, particularly those meant to benefit most from FMAP, are getting far less than intended.

Laura Radel is a Child Welfare Wonk Senior Contributor.

Before retiring, she spent 35 years analyzing child welfare issues for the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE).

By Laura Radel, MPP

Title IV-E of the Social Security Act provides the bulk of federal child welfare funding. But if you think it’s mostly funding foster care, you’re missing a structural shift.

Today, only about half of program funds are devoted to foster care and only about 1 in 5 children receiving program subsidies are in foster care. Instead, the vast majority of program beneficiaries are children in adoptive homes and guardianships.

Title IV-E spent approximately $10.2 billion in Federal Fiscal Year (FFY) 2023,³reimbursing states for a portion of their costs for eligible expenditures in foster care, adoption, guardianship, and, in recent years, prevention services for eligible children. It also funds administrative and placement costs associated with these programs.

The program’s evolution began with an emphasis on permanency in the Adoption Assistance and Child Welfare Act of 1980 (P.L. 96-272), and was supercharged by the Adoption and Safe Families Act of 1997 (ASFA; P.L. 105-89).

In addition, as part of welfare reform in 1996, Congress restricted the program’s eligibility, over time decreasing the proportion of children in foster care eligible for federal reimbursement. As a result, what was a foster care program over time became largely an adoption program.

The Trends Behind the IV-E Transformation

ASFA in 1997 impelled states to increase adoptions from foster care. The 2008 Fostering Connections to Success and Increasing Adoptions Act (P.L. 110-351)introduced federally subsidized guardianships, expanding options for permanency.

Because adoptions and guardianships typically last longer than foster care stays, the number of children receiving permanency payments to stay with adoptive parents or guardians grew quickly in relation to children in federally funded foster care.

Child welfare funding changes contained in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) restricted Title IV-E eligibility, contributing to the program’s transformation.

Congress tied Title IV-E eligibility to each state’s now-defunct Aid to Families with Dependent Children income limit, but with no inflation adjustment. It later phased out income limits for adoptions, but not foster care or guardianship, driving this structural shift.

As a result, the proportion of adopted children eligible for Title IV-E grew to 87% in 2023, while the proportion of eligible children in foster care declined to 34%.

There is considerable variation in these numbers among states, ranging from 5 states with IV-E foster care eligibility rates of less than 20% to 4 states with rates greater than 60%. States shoulder all foster care costs for children who are not IV-E eligible.

Two factors make the shift toward adoption (and, to a lesser extent, guardianship), less dramatic when you look at funding rather than at the population of participating children.

First, foster care has more administrative activity associated with it than do adoption and guardianship – the costs of court preparation, for example. Second, many states have sought to maximize claims for administrative costs, creating systems to document every possible claimable activity.

As a result, costs of administration, training, and data systems have grown as a proportion of overall program costs, representing 72% of foster care program claims in 2023. This compares to about 14% for adoption and 6% for guardianship.

While views of the system stayed fixed, we shifted from direct funding mostly for children’s care to supporting states’ child welfare system infrastructure. Missing that will focus you on the wrong cost and policy drivers.

In addition, this system tends to favor adoptive families, often with more resources and less prior connection to the child than kin or family-based caregivers.

Federal policy focus, as well as research, data collection and accountability systems, continue to focus on children in foster care. Even many knowledgeable observers still think of title IV-E as “mostly foster care.”

Lawmakers and advocates have also increasingly focused on the role of Title IV-E in financing prevention through Family First.

Meanwhile Title IV-E’s largest component shifted ever deeper into the child welfare system, focusing resources on those relatively few children permanently separated from their families of origin.

These changes have taken place largely under the policy radar, without attention, debate, or intentionality. But they’ve been right there in plain sight in the public data.

For 35 years Laura analyzed child welfare issues for the Office of the Assistant Secretary for Planning and Evaluation (ASPE), a combination research and policy office within the Office of the Secretary of the U.S. Department Health and Human Services. She retired this May, amid ASPE’s near elimination during reorganization.

Implementing the Supporting America’s Children and Families Act

At the end of 2024, Congress passed the biggest reauthorization in decades of Title IV-B of the Social Security Act, a child welfare law providing states flexible funding.

Signed into law in early January, the Supporting America’s Children and Families Act(P.L. 118-258) retools federal expectations and provides important policy signals.

It also comes with $75M in new annual funding, which comes online on October 1.

Our original IV-B overview breaks down how the program is structured and what’s in the reauthorization.

The Latest ACF Action

On June 18, the Administration for Children and Families issued an Information Memorandum on the Title IV-B reauthorization.

An Information Memorandum is one of ACF’s tools for communicating non-binding information to states.

What to Expect

A Program Instruction, a policy guidance document that will detail how to access the law’s expanded funds, and provide an official state-by-state distribution table.

The closest thing currently is this report from the Congressional Research Service, which came before enactment of the law.

As implementation looms closer, here’s a look at what matters most for child welfare systems, agency leaders, funders, and policy strategists.

IV-B’s Core Structural Tension

Title IV-B comes with significant policy and reporting requirements, and only 4% of all federal child welfare funding.

That tension is at the heart of Title IV-B. It’s the rate limiting function for its impact.

It’s how a policy shifts from aspirational incentive during Congressional markup, to conditional formatting in a state budget office spreadsheet.

If you’re a staffer or advocate who has always wondered why changes you’ve secured in IV-B over the years don’t fundamentally change systems on the ground, this is why.

Understanding that balance provides insight about how to strategically orient to this latest reauthorization without over- or under-indexing to any single aspect.

BLUF: Show Me the Money

IV-B provides a mixture of mandatory and discretionary funds across its two subparts.

• Subpart 1: Stephanie Tubbs Jones Child Welfare Services Program

  • Authorized at $325 million annually

  • Most recently appropriated at $269 million

• Subpart 2: MaryLee Allen Promoting Safe and Stable Families (PSSF) Program

  • Discretionary funding

    • Authorized at $200M annually

    • Most recently appropriated at $73M.

  • Mandatory funding

  • Was $345M annually

  • Will now rise to $420M annually starting this October.

What follows is a rundown of its key policy changes.

For each, bear in mind the limits that come with the law’s core structural tension.

Clearer Prevention and Kinship Emphasis

The law clarifies that family resource centers and peer support are eligible for Promoting Safe and Stable Families (PSSF) funding.

Similarly, the law provides clarity that kinship caregivers are eligible for IV-B services.

The combination of clarity and new funds could new make these easier to implement.

Ensuring Poverty Alone Does not Drive Neglect

To ensure poverty alone does not lead to children entering foster care, states have increasingly implemented policies to clarify that poverty is not neglect.

Now that is part of federal law, too.

Workforce: From Punitive Oversight to Targeted Support

The law provides flexibility and funding boosts:

• Boosting monthly caseworker visit funding by 30 percent, to $26M;

• Allowing optional virtual caseworker visits for youth in extended foster care;

• Ending federal financial penalties for missed monthly visits.

This is a drop in the proverbial bucket compared to Title IV-E administrative funding, which is the core federal tool for child welfare workforce funding.

But moving from penalties to flexibility here could have effects beyond the funds themselves.

Planning with User-Centered Design

States and Tribes must now consult youth, parents, kin, and caregivers with lived experience in the child welfare system when developing their Title IV-B plans.

While many states had already begun doing this, it’s the first such federal requirement in IV-B.

Standardizing it in this way opens up formal processes for interested stakeholders to be part of those discussions.

Plans Must Be Public and Comparable

This is a deep cut that punches above its weight class. For the first time ever, states must post their Title IV-B plans online in standardized formats.

HHS must create national comparisons and summaries. This opens the door for meaningful cross-jurisdictional benchmarking; expect more maps and charts here.

Child Welfare Policy and the Legal System

The law provides an additional $10M to the Court Improvement Program, for a total of $40M starting in October.

This is the only direct child welfare related federal funding for courts to manage nearly 600,000 children’s cases annually.

States also must describe how they ensure availability of information about independent legal representation in child welfare proceedings for children and their parents or guardians.

Expanding Multi-Systems Responses to Parental Substance Use

The Regional Partnership Grant (RPG) program funds multi-disciplinary collaboration to address the role of parental substance use in driving child welfare involvement.

Under the new law, RPGs receive an increase in annual funding from $20M to $30M.

This opens the door to expanding RPGs and further developing programs to target this primary driver of child welfare involvement.

Reducing Administrative Burden

HHS must streamline Title IV-B data reporting, to reduce administrative burden by 15% within three years.

Final Recalibration

IV-B matters, but is constrained by the tension between its funding and policy aspirations.

Recognizing this, we’ve tapped former leader to see how they would implement it.

On April 8, 2025 the U.S. Ways and Means Subcommittee on Work and Welfare held an oversight hearing on Temporary Assistance for Needy Families (TANF).

Hearing Focus: TANF’s accountability and fraud risks, with testimony from multiple U.S. Government Accountability Office experts and an OH county agency director.

TANF Concerns: GAO’s report notes that 37 states have 162 TANF audit findings. One third fell into the highest category of audit concern.

Findings showed audit concerns persisted too; over three dozen findings were unresolved after 2+ years, and some lasted over a decade.

GAO noted it has previously raised concerns around HHS support of state audit resolutions, enforcement action, and fraud risk assessment.

TANF is overseen by the Office of Family Assistance, which has lost 40% of its staff, including those that distribute TANF funds to states.

We don’t yet know how these changes will impact program oversight and integrity.

TANF Complexity: TANF's structure includes “assistance” (direct financial support) and “non-assistance” (everything else). The complex eligibility rules for assistance drive increasing shifts toward non-assistance.

New Child Welfare & TANF Report Drops: GAO also released a new report looking at how TANF works with other federal funds to support child welfare services.

Report Findings: The report highlights the central role of TANF in federal child welfare financing. It notes that from FY2015-FY2022, states reported :

• $68.6 billion in Title IV-E spending;

• $4.4 billion in Title IV-B funding; and

• $23.5 billion in TANF spending just for child welfare.

TANF’s Child Welfare Role: TANF plays a major role in child welfare financing, supporting an array of activities, including:

• Financial resources for kin caregivers

• Foster care maintenance payments for children who are not eligible for Title IV-E.

• Family support, family preservation, and reunification services;

• Adoption services; and

• Much more, including the authority to transfer up to 10% of TANF funds to SSBG, which itself can also fund child welfare activities.

The breadth of things TANF does in child welfare points both to its evolution within the basic assistance eligibility constraints, and the limits of other federal funds.

These broad activities include both unique and overlapping functions to other federal

CWW Original Analysis

FY23 TANF Child Welfare Expenditure Data

This is Child Welfare Wonk; we couldn’t help but notice that these extensive new GAO reports only go up to FY2022 data.

ACF has FY2023 TANF expenditure data too though, so we had to dig in and add to what GAO has offered.

Fifteen with One-Fifth

This chart shows the 15 states that have 20 percent or more of their FY2023 TANF expenditures going to child welfare1:

To add some national perspective, this map shows the percent of total FY2023 TANF expenditures that went to child welfare.

What it Means for Child Welfare Policy: Changes to TANF in budget reconciliation or from staff reductions would have significant child welfare financing implications.

Long-term, the evolving changes across federal financing programs raise questions about bipartisan opportunities to optimize operation across all federal programs.

In budget reconciliation, a new development worth monitoring has emerged. An arcane budget rule could create major cuts to programs including the:

• Social Services Block Grant (SSBG);

• Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program; and

• Title IV-B Promoting Safe and Stable Families Program.

What’s Happening: If budget reconciliation didn’t feel complicated enough, it’s time to talk about the Statutory Pay-As-You-Go-Act of 2010 (S-PAYGO, P.L. 111-139).

S-PAYGO is a product of its 2010 environment; much like Adele’s hit single, Congress was Rolling in the Deep deficits that came out of the Great Recession response.

Congress is best at doing things it forces itself to do (like debt limits and spending cliffs), and S-PAYGO brings that to deficit reduction.

What S-PAYGO Does: The thinking is simple; surely Congress won’t leave new spending or tax cuts unbalanced if the price of doing so is automatic painful cuts?

Instead, much like the debt limit this convoluted measure is usually more of a bargaining chip in negotiations. Usually Congress simply votes to waive it later on.²

S-PAYGO Now: The twist is that CBO estimates this reconciliation bill would add so much to the deficit that these are not your typical across-the-board percentage cuts.

On May 20th, the nonpartisan Congressional Budget Office (CBO) sent a letter to U.S. House Budget Committee Ranking Member Brendan Boyle (D-PA) regarding the S-PAYGO interaction.

The letter confirms that if enacted, the reconciliation bill’s addition of over $2T to the deficit would trigger across-the-board budget sequestration cuts.

These would hit an array of mandatory programs,³ which are those whose funding continues without needing new approval from Congress each year.

What’s New: Beyond a required reduction in Medicare spending, CBO says S-PAYGO would require eliminating all funding for every other program subject to sequestration. For 10 years.

“After accounting for the reduction in Medicare spending, the required reduction in spending for other programs would exceed the estimated amount of resources available to those programs in each year over the 2027–2034 period. If OMB sequestered all of the funding for those programs, the total amounts would be less than the reductions required by S-PAYGO.”

The Cuts at a Glance

• $1.7B/year Social Services Block Grant (SSBG)

  • You can see more here on SSBG’s major role in child welfare.

  • It was on the reconciliation chopping block but then seemingly spared.

  • Now it’s back in the mix.

• Over $600M and Rising/Year: Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program

  • In many ways the gold standard of bipartisan evidence-based child and family policy.

  • MIECHV was just reauthorized in 2022 by massive bipartisan margins.

• $289M/Year for States in Title IV-B Promoting Safe and Stable Families Program.

  • Yes, that Title IV-B that Congress just reauthorized with its first mandatory funding increase in decades.

  • If S-PAYO hit, it wouldn’t just erase those gains, but the entire mandatory funding distribution in Promoting Safe and Stable Families.

So Are These Cuts Guaranteed? Definitely not.

Practically every time Congress faces automatic cuts, they waive the requirement in later legislation. That includes the expiring 2017 tax cuts this bill extends.

Why this Warrants Attention: 2025 is not a year that has followed any typical playbook when it comes to political incentives or policy processes.

The razor-thin vote margins needed to advance legislation make nothing a guarantee.

In addition, the backdrop of tensions over unilateral executive spending and staffing cuts make this more complicated; automatic cuts sound different with DOGE.

Analysis: Projected FY2026 Sequestration Cuts to SSBG, MIECHV, and Title IV-B

At Child Welfare Wonk, we don’t traffic in vibes and vagaries. We know you need clarity about what these cuts would mean for programs you care about.

So we built you a projection that shows the state-by-state cuts just from SSBG, MIECHV, and Title IV-B, which range from ~$6M to ~$250M.

Projected Sequestration Cuts By State without S-PAYGO Waiver

Data from ACF, CRS, & HRSA. Projection analysis and visualization by Child Welfare Wonk.

10 Biggest State Sequestration Cuts in FY2026: SSBG, MIECHV, and Title IV-B

To further drill down on the possible impact, this chart shows the 10 states that would see the biggest cuts under this scenario.

It’s a mix of both large states and those that have been recent electoral battlegrounds.

The tension will remain while these cuts persist as possible. We’ll be watching for what comes next.

Congress is currently deliberating budget reconciliation legislation that could have significant implications for child welfare policy and financing.

As part of proposed spending reductions to offset tax policy changes, this simple-majority fast-track legislative procedure could create cuts to child welfare programs.

We have previously provided a primer on reconciliation and noted programs that could see significant cuts or elimination, which include:

• Social Services Block Grant (SSBG);

• Temporary Assistance for Needy Families (TANF); and

• Medicaid.

A national perspective masks state-by-state variation. To project potential impact, Child Welfare Wonk modeled how these possible cuts could affect each state.

We built a projection model using data from three sources, which let us make a conservative estimate of how possible reconciliation cuts would impact each state.

Here’s a rundown of what we found for you, and the details on how we did it.

What We Found: Scale of State Cuts

BLUF Takeaway:

• Child welfare agency cuts would average 7% nationally.

• Child welfare agency cuts would range from 2% to 18%

• 13 states face cuts of 10% or larger.

• Source of Cuts:

  • 5% from SSBG

  • 1% from TANF

  • 1% from Medicaid

This map highlights the projected cuts nationwide.

The 10 Percent Club

Of note, our analysis shows 13 states as members of the “10 Percent Club”, meaning they face child welfare agency cuts of 10% or more under this projection.

This first chart breaks down the total cut each of these states face.

To dig deeper and because states’ vulnerabilities to these cuts vary, we also broke out the components of each state’s total cut.

This chart shows the same 10 Percent Club, showing not just its total cut but also how much of it specifically comes from SSBG, TANF, and Medicaid.

Projected Cuts to All States

This chart provides the projected total child welfare agency cut to all states under current reconciliation. It also benchmarks to the national average cut.

States Disproportionately Reliant On SSBG, TANF, & Medicaid

We know that as reconciliation continues, the composition of total possible funding cuts child welfare agencies face will change.

As negotiations continue, we will keep updating this modeling. In the meantime, we also will offer insight into which states have the greatest reliance on each program.

This first chart shows the 10 states most reliant on SSBG as a percentage of their total child welfare agency budget.

If reconciliation were to not cut SSBG, these states would disproportionately benefit. If it does cut SSBG, our projections show them as the most vulnerable to that cut.

Next up is the 10 states most reliant on TANF as a percentage of their total child welfare agency budget.

If reconciliation were to not cut TANF, these states would disproportionately benefit. If it does cut TANF, our projections show them as the most vulnerable to that cut.

It’s worth noting that TANF faces further federal scrutiny that compounds this risk.1

Next up is the 10 states most reliant on Medicaid as a percentage of their total child welfare agency budget.

This one is less straightforward; it only accounts for Medicaid spending by the child welfare agency. That is a significant undercount of Medicaid’s role in child welfare.

But it’s still important, and tells us states with likely additional risk exposure to any reductions in reconciliation.

Taken together, these three charts give a glimpse of how changes in reconciliation during negotiations may change our projections. Stay tuned for more.

Key Questions This Analysis Raises

There are many things this modeling cannot project. There are also further analyses and decisions others will face that this can inform. These include:

• What would the projected budget reductions in this model look like if applied to a current child welfare agency budget?

• How would the impact of these cuts change based on current and future projected foster care and prevention caseloads?

• How would cuts to Medicaid impact child welfare agencies’ prevention services?

• How would these reductions affect on entries to and exits from foster care?

• In what ways would reductions of this nature change implementation of the recent bipartisan reauthorization of Title IV-B of the Social Security Act?

• Does your state have its own recent policy reforms that these cuts would impact?

Sources and Methods

For those who want to go under the hood, this offers a detailed rundown of how we built our projection model, the assumptions we used, and how we analyzed the data.

This projection uses a conservative methodology that intentionally errs on the side of undercounting potential cuts. We used the following data sources and assumptions.

Data Sources:

ChildTrends Child Welfare Financing Survey

The biennial Child Welfare Financing Survey from ChildTrends offers important insights because it differentiates federal from state/local spending.

Missing data are inevitable in any survey.2 More flexible federal funds also often fill budget gaps, so variability in their role can change significantly year-to-year.

Our model is designed to mitigate these aspects of the data. We created a new combined dataset to smooth variability and develop more stable estimates.

We did this by using data from the three most recent surveys, lessening variability and giving us a more stable base from which to make projections.

How We Used It:

• We used these figures to determine total reported child welfare agency spending across the three surveys.

• We also measured total reported SSBG and TANF spending by state.

• Based on those figures we determined the percentage of child welfare agency spending that SSBG and TANF represented over the three surveys.

• This was our basis for SSBG and TANF cuts:

  • For SSBG we used its percentage of the budget, since it faces elimination.

  • For TANF we used 10% of its budget percentage, to reflect the likely cut.

• These are likely undercounts:

  • Given the broader impact these cuts will have on other aspects of state budgets, they could reasonably lead to broader budget rebalancing.

  • They do not reflect any synergistic effect when combined with Medicaid cuts;

    • Reduced coverage could reasonably lead to higher demand for social services at the moment that their funding also decreases.

• For these reasons, we believe this combined data set is the best possible publicly available tool to conservatively project the scope of possible cuts.

Sources:

• Child Welfare Financing Survey SFY 2020

• Child Welfare Financing SFY 2018

• Child Welfare Financing SFY 2016

KFF Medicaid Cut Analysis

KFF recently provided an analysis of the Medicaid reduction each state would see with a reconciliation cut of $880B over ten years.

How We Used It:

• We used these figures to assume the Medicaid cut each state would face.

• These totals were the numerator to calculate cuts as %s of total state budgets.

• Assuming such a shortfall would spread beyond Medicaid is reasonable:

  • Medicaid is over half of all federal funding to states and the largest category of total state spending.3

  • Accordingly, Medicaid cuts would have implications beyond Medicaid itself.

• A reasonable projection would be across-the-board cuts to all state agencies.

• We used the percentage of each state’s budget that Medicaid represents to derive this cut, which we added to the SSBG and TANF cuts.

Sources:

• Putting $880 Billion in Potential Federal Medicaid Cuts in Context of State Budgets and Coverage

National Association of State Budget Officers 2024 State Expenditure Report

Our figures for state budgets come directly from the states themselves; we used the most recent report from the National Association of State Budget Officers.

How We Used It:

• We need a conservative estimate of total state budget impact for Medicaid cuts.

• To ensure accuracy, we used FY 2023 data from this report.

• We did this because the FY 2024 data are projections, and we wanted to use actual spending data to avoid inaccuracies.

• This figure was the denominator we used to estimate what percent of state budgets the Medicaid cut would implicate.

• This is like a significant undercount:

  • This does not assess the impact of lost coverage on acuity of need and state-covered indigent care costs.

  • It does not reflect Medicaid spending state child welfare agencies report;

    • While we have those figures from ChildTrends, trying to include them here would risk double counting them.

  • It does not reflect potential increases to state borrowing costs;

    • Recent credit rating agency analyses4 have noted that given the proportion of state budgets Medicaid represents.

    • They project that significant reductions could lead to credit downgrades.

    • Downgrading of state bonds would create higher state borrowing costs.

• Combining these figures with the KFF analysis provides us with a conservative ability to estimate the likely impact to state child welfare agency budgets.

Sources:

• 2024 Expenditure Report

Key Projection Assumptions:

All projections of this nature rely on assumptions. Child Welfare Wonk used these:

• Total budget reconciliation spending reductions of at least $1.5T

  • Senate and House approaches and instructions continue to differ.

  • This figure has consistently been at the lower end of cuts needed absent an agreement that essentially obviates the need for cuts.

  • Our model is designed to accommodate updates to this figure; as Congress makes new decisions, we will update our projections.

• Elimination of SSBG

  • Ever since the U.S. House Budget Committee memo first outlining possible spending reduction targets, SSBG elimination has been a discussion.

  • Current reconciliation instructions would still accommodate this cut.

• A 10% TANF Cut

  • Ever since the U.S. House Budget Committee memo first outlining possible spending reduction targets, a 10% TANF cut has been a discussion.

  • Given the breadth of recent administrative oversight action highlighting concerns with TANF, this is likely an undercount of possible reductions.

• A cut of $880B to Medicaid over 10 Years.

  • Multiple reconciliation proposals have included instructions to the U.S. House Energy and Commerce Committee to generate savings of at least $880B over ten years.

  • This is a floor rather than a ceiling, and multiple policymakers have called to increase this to significantly larger reductions.

  • The non-partisan Congressional Budget Office has noted that Medicaid represents 93% of relevant spending within that committee’s jurisdiction.

  • Based on all of this, independent health policy analysis organization KFF has based its projections for Medicaid reductions on $880B over ten years.

  • We are aware that many different proposals are also under discussion.

  • We began with this estimate, and will refine it as policymakers make formal decisions that refine their proposals.

• A conservative application of Medicaid cuts to child welfare agency budgets.

  • Child welfare agencies rely significantly upon Medicaid. Among the many ways that it serves the agency’s population are that it covers:

    • 99% of children in care;

    • Children with special needs adopted from foster care;

    • Youth who age out of foster care to age 26;

    • Mental health and substance use disorder treatment for parents to prevent foster care;

    • 7% of all federal spending by child welfare agencies, not including coverage, for services the agencies directly provide.

  • The breadth of this impact is challenging to calculate accurately.

  • SSBG and TANF spending that is relevant to child welfare is more likely to be directly reflected in the child welfare agency budget, unlike Medicaid.

  • This means that while measuring those in ChildTrends data is more straightforward, this approach is an exponential undercount for Medicaid.

  • Our approach assumes across-the-board state budget cuts, based on the percent of each state’s budget that their projected Medicaid cut equals.

  • As noted above, this is likely a significant undercount, intentionally.

  • We did that to create projections in a data-driven defensible manner.

Methods

Analyzing these data and using these assumptions, we built out a projection of the cuts under budget reconciliation. This was our approach:

• Using ChildTrends data we measured total reported agency spending over three years, with SSBG and TANF broken out.

• Based on those figures we determined the percentage of child welfare agency spending that SSBG and TANF represented over the three surveys.

• This was our basis for SSBG and TANF cuts:

  • For SSBG we used its percentage of the budget, since it faces elimination.

  • For TANF we used 10% of its budget percentage, to reflect the likely cut.

• We used KFF data to assume the Medicaid cut each state would face, and NASBO data to benchmark that cut to the most recent actual budget.

  • Using KFF’s projected cuts as our numerator and the NASBO FY23 state budgets as our denominator, we found the % cut to each state’s budget.

• Assuming those Medicaid cuts became across-the-board cuts to all state agencies, we added that to the SSBG and TANF cuts.

• This gave us our total projections, including nationally and for each state.

Limitations

Any budgetary projection will have limitations. Ours include that we:

• Cannot estimate the dollar value of cuts for state budgets;

• Likely underestimate cuts to child welfare agencies, particularly Medicaid;

• While our ChildTrends data show Medicaid spending, we had to exclude that from our cut projections and rely on other sources;5

• Have to rely upon multiple datasets for the figures we need; and

• Rely upon state data that are delayed and cannot capture most recent figures.

Thanks for reading, wonks, and I look forward to hearing what questions this analysis raises for you and what more you know about your own state that can refine it.

Congress will consider major legislation this year using budget reconciliation. So, what is that, and why does it matter for child welfare?

Congress isn’t planning to craft new child welfare policy. But key child welfare programs could face cuts to offset new spending, like tax cuts.

Programs that could see significant cuts or elimination include:

• Temporary Assistance for Needy Families (TANF)

  • Cash assistance and much more

  • ~19% of federal child welfare spending.1

  • Could see a 10% reduction and elimination of its contingency fund.

• Social Services Block Grant (SSBG)

  • Very flexible funding, serves children and families.

  • 10% of federal child welfare spending.

  • Could face complete elimination.

• Medicaid

  • Federal-state health insurance program covering:

    • Almost half of all children;

    • Nearly all (99%) children in foster care;

    • Children with special needs adopted from foster care;

    • Youth who age out of foster care, up to age 26; and

    • 7% of all federal child welfare spending.

To fully see these implications, it helps to understand the parliamentary procedure.

Everything You Wanted to Know About Budget Reconciliation (But Were Afraid to Ask…)

Talking about budget reconciliation without understanding it is a rite of passage for policy wonks. That’s because it is as consequential as it is confusingly complicated.

Part of what makes reconciliation complex is that it was made for one thing but now is used for something totally different, like how bubble wrap was originally a wallpaper.

The Congressional Budget Act of 1974 (P.L. 93-344) created reconciliation to let Congress change revenue, spending, or the debt limit to match the budget resolution.

It turned out that this tool was excellent for surmounting the gridlock that comes from small Congressional majorities; it moves quickly and isn’t subject to the filibuster.

Process-wise, reconciliation occurs in two stages, so let’s break them down.

Stage One: Crafting and Drafting

The House/Senate Budget Committee crafts a budget resolution. This instructs the relevant committee(s) to draft legislation following that blueprint by a deadline.

The budget committee consolidates those submissions. Then there’s a review to ensure each policy follows the Byrd Rule (as in former Senator Robert Byrd).

If it doesn’t impact revenue or spending, it has to go. The nonpartisan parliamentarian does this review, which is called the Byrd Bath, because of course it is.

Stage Two: Vote-A-Rama & High-Stakes Drama

Finished reconciliation bills then get expedited consideration. In the Senate, this also includes the fabled “Vote-A-Rama” process of seemingly limitless amendments.

And then the high-stakes drama, like McCain’s famous thumbs down, dooming repeal of the Affordable Care Act. With vote margins this close, it’s not over until it’s over…

2025’s budget reconciliation process is constantly evolving. Child Welfare Wonk’s weekly newsletter will keep you posted on the latest.

The Child Abuse Prevention and Treatment Act (P.L. 93-247 AKA CAPTA).1

CAPTA at a Glance2

• First passed: 1974

• Most recent reauthorization: 2010

• Two Core Titles

  • Title I: State Grants Program

    • Funds states for child protective services and other activities.

    • Most Recent Appropriation: $105m3

  • Title II: Community-Based Child Abuse Prevention (CB-CAP)

    • Community-based organizations support families/prevent maltreatment.

    • Most Recent Appropriation: $70m

So let’s talk about the proverbial Christmas tree of child welfare policy, CAPTA.

Why a Christmas tree? This tree unfortunately does not have a lake of largesses around its base. Nope, it’s so known because of its MANY ornaments.

Placing the Paucity of Presents: Federal Funding for CAPTA

CAPTA is so small that ChildTrends’ biennial state child welfare financing survey4 lists is within “Spending of Other Federal Funds by Child Welfare Agencies”.

States each get a small grant through Title I of CAPTA to support their child protective services (CPS) system. They mostly fund that work with state and local funds.

Title II of CAPTA funds public-private-partnerships to prevent abuse and neglect using the science of risk and protective factors for maltreatment.5

As you can imagine, both of these sets of funds only go so far. So you might think CAPTA was a pretty flexible program, block grant style….

Hanging the Ornaments: Policy Requirements

Except nope, not at all. It has beaucoup requirements.

The word “assurance” appears 15 times in the statutory text of CAPTA. That’s an undercount, since most of those are followed by bulleted lists. Here’s just a handful:

• Reporting Systems. Systems for reporting abuse and neglect, like a hotline.

• Mandated Reporting. A state law for mandatory reporting of abuse and neglect.

• Plans of Safe Care for Substance Exposed Infants. Policies and procedures addressing prenatal substance exposure or Fetal Alcohol Spectrum Disorder.

• Investigation Systems. Systems for investigating child abuse and neglect.

There are around two dozen such assurances, which governors must provide HHS.

Meanwhile on Mount Crumpit: The Funding/Policy Balancing Act

So you may be wondering why we seem to load ornaments onto this tree like Charlie Brown, only to leave states feeling like "But Santy Claus, Why?"

A few factors are at play here. Because this is Child Welfare Wonk, you may have guessed that one is Congressional committee jurisdiction.

In the Senate, almost all major child welfare programs live in the Senate Finance Committee. In the House, most are in the Ways and Means Committee.6

So in general, the same Members oversee those programs. Most are tied to mandatory funding too, which are dollars that permanently support programs.

CAPTA is different, though. It sits in the Senate Health, Education, Labor, and Pensions (HELP) Committee and House Committee on Education and the Workforce.

It also relies on appropriations. So it becomes a magnet for well-intended policy that lacks the resources to translate into action.

Policymakers nearly passed a bipartisan reauthorization in 2022 that would have streamlined the assurances and increased funding authorization to $270m each Title.

In 1965, Congress created Medicaid (Title XIX of the Social Security Act, P.L. 89-97).1 It’s a state-federal partnership. States don’t have to participate, but all do.2

The U.S. Centers for Medicare and Medicaid Services (CMS) oversee Medicaid through the Center for Medicaid and CHIP Services (CMCS).

Medicaid by the Numbers

• Together with the Children’s Health Insurance Program (CHIP), it covers 77.9 million people, making it the single largest source of U.S. health coverage.3

• It also is the largest payor of mental health services in the U.S.4

• FY 2024 Federal Medicaid Spending: $618 billion5

• Per child annual federal medicaid cost: $2,0106

• Average number of children on Medicaid per month: 37 million7

Who Medicaid Covers

Income and other factors impact Medicaid eligibility.8

Medicaid beneficiaries include:

• Children;

• Pregnant women;

• Parents;

• Seniors;

• Individuals with disabilities; and

• Certain low-income adults

Interestingly, drafting soldiers during the Vietnam War led to one of Medicaid’s child benefits, the Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefit.

This grew out of the health exams of young prospective soldiers. Many had health issues preventing their service, but which early intervention would have addressed.9

EPDST ensures Medicaid-enrolled children under 21 get appropriate preventive, dental, mental health & specialty services, even ones Medicaid doesn’t usually cover.

How Medicaid Works

States have plans that outline how their Medicaid system operates. In negotiation with CMS, they can also develop amendments to their state plans.

States also have access to waivers for things such as innovation (1115 waivers) and providing home and community-based services (HCBS AKA 1915(c) waivers).

A good overall resource is Medicaid.gov, where you can view:

• State Plan Amendments

• An overview of 1115 waivers and a list of all current waivers

  • These demos must be cost-neutral, and allow states to experiment

• An overview of HCBS waivers

CMS reimburses states for permissible expenditures according to the state’s Federal Medical Assistance Percentage (FMAP).10

This number is also important because beyond Medicaid, it drives state reimbursements across many other child welfare programs.

Given the complexity of Medicaid financing and policy, there is an entire non-partisan independent legislative branch agency on it.

The Medicaid and CHIP Payment and Advisory Commission (MACPAC) provides Congress and HHS with analysis and recommendations for Medicaid and CHIP policy.

MACPAC has done some good child welfare specific resources on Medicaid, including:

• 2015 Report The Intersection of Medicaid and Child Welfare

  • Breaks down demographics, health needs, and behavioral health utilization

• A 2021 report Medicaid Coverage of Qualified Residential Treatment Programs for Children in Foster Care

• Note- this week’s 2/28 MACPAC meeting will have discussion on health access for children in foster care

Medicaid and Child Welfare

Medicaid plays a critical role in supporting children, parents, and caregivers who are in or could enter the child welfare system.11

Children in foster care experienced trauma and have significant health needs. Up to:

• 80 percent enter care having a significant mental health need;

• Three quarters enter having at least one physical health problem;

• One-third enter with a chronic condition.

Medicaid covers 99 percent of children in foster care,12 and the ~18,000 children who age out of foster care to age 26.13 Medicaid also does so much for their families.

Parents And Relative Caregivers

We know that at least a third of children entering care do so at least in part because of “parental drug abuse”. At least six percent are from“parental alcohol abuse”.14

Medicaid is key for funding their treatment, helping families heal from intergenerational trauma and can prevent unnecessary foster care.

Children’s coverage through Medicaid eliminates the barriers that can otherwise prevent relatives from providing kinship care, promoting family connection.15

Adoptive Families

Medicaid also plays a key role in the stability of adoptive families. Almost 30 percent of children exiting care join an adoptive family. That was 53,665 in FY 2022.16

Children adopted from care have significant trauma histories and health needs. They get categorical eligibility for Medicaid, covering care even private insurance won’t.17

Child Welfare Agencies Also Receive Medicaid Funds

In addition to Medicaid covering this population, child welfare agencies also receive additional Medicaid funding for health services they directly provide, including:

• rehabilitative services;

• targeted case management; and

• treatment foster care.

In SFY 2020, child welfare agencies spent $1 billion in Medicaid funds for child welfare activities. Representing 7% of all federal funds child welfare agencies spend.

That’s more than Title IV-B and the Child Abuse Prevention and Treatment Act. And in some states it’s almost a third of federal child welfare spending.

Medicaid is a major source of coverage for children generally, and especially children and families in or at risk of entering the child welfare system.

Wonk Out

• Full Title XIX statutory text

• MACPAC statutory reference guide to Medicaid statute and regulations

• Most recent Medicaid Access Rule

The Social Services Block Grant (P.L. 95-134, AKA SSBG, AKA Title XX of the Social Security Act) is the highly flexible most-important-program-you’ve-never-heard-of.

SSGB provides 10% of federal child welfare spending, supporting an array of services.

Created in 1981, SSBG is the elder-millennial-oldest-daughter of social services programs; its flexible can-do attitude keeps things going smoothly even amidst chaos.

SSBG Highlights:

• Annual SSBG Funding

  • $1.7B in mandatory capped funding.

  • ACF tracks the amount it releases to each state on a quarterly basis.

    • See the first two quarters of FY 2025 here.

    • See the full year of releases for FY 2024 here for comparison.

• Key Flexibilities

  • State investment driven by local community need.

  • Broad uses tied to key purposes.

  • States can move up to 10% of their TANF funds into SSBG.

• SSBG’s Purpose(s)

  • SSBG supports five overarching policy goals, with lots of child welfare focus:

1. Achieving or maintaining economic self-support to prevent, reduce, or eliminate dependency;

2. Achieving or maintaining self-sufficiency, including reducing or preventing dependency;

3. Preventing or remedying neglect, abuse, or exploitation of children and adults who are unable to protect their own interests or preserving, rehabilitating, or reuniting families;

4. Preventing or reducing inappropriate institutional care by providing for community-based, home-based, or other forms of less intensive care; and

5. Securing referral or admission to institutional care when other forms of care are not appropriate or providing services to individuals in institutions.

• Who It Serves (FY 2023)

  • 7 million individuals, including 2 million children.1

What SSBG Does:

• SSBG’s Federal regulations2 outline over two dozen service categories:

  • Many are related to child welfare, including:

    • Child welfare/youth-at-risk services (the top category by spending);

    • Adoption services;

    • Foster care services;

    • Protective services;

    • Case management; and

    • Counseling services.

SSBG’s breadth makes it hard to concisely sum up. SSBG is to child welfare what the Sixth Man is to a basketball team; not your key starter, but an essential team player.

Want to see what kind of numbers SSBG puts up when it comes off the bench? Here’s a chart of states’ most frequent child welfare spending categories:

There are great examples of resources that humanize this impact, including the “Faces of SSBG” report that the National Association of Counties put out in 2017.

HHS also has detailed state profiles worth reading, including:

• Florida;

• Louisiana; and

• Oregon.

Summing up, another way to put it is that SSBG is like your younger sibling’s piggy bank. Lacking obvious clarity of what it will buy makes it appealing to impulsively raid.

But! Emptying it comes with unintended consequences, disproportionate to the haul…

Wonk Out:

• SSBG Information Memoranda

• SSBG Dear Colleague Letters

The Congressional Research Service (CRS) has a great comprehensive report on Temporary Assistance for Needy Families (TANF). There is also an excellent podcast series on its origin.1

Comprising ~19% of federal child welfare spending, TANF is a block grant, which is wonk speak for a set pot of funds to states and tribes with requirements and rules.

Total federal TANF funding is $16.5 billion per year. That has not changed since 1996, which means TANF has lost 49 percent of its value to inflation from 1997 to 2024.2

TANF replaced the Aid to Families with Dependent Children (AFDC) program, shifting from an open-ended entitlement program to a block grant.

States also have a Maintenance of Effort (MOE) requirement. This is wonk-speak for ensuring states don’t cut their spending and replace it with federal funds.

TANF funds anything “reasonably calculated” to achieve its four statutory purposes:

1. Provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives;

2. End the dependence of needy parents on government benefits by promoting job preparation, work, and marriage;

3. Prevent and reduce the incidence of out-of-wedlock pregnancies; and

4. Encourage the formation and maintenance of two-parent families.

This figure from CRS shows combined federal and state TANF funding by topic:

Often, TANF is synonymous with “welfare”. Many wonks are then surprised to learn that only ~20% of TANF goes to direct cash assistance.3

TANF has lots of rules for cash assistance, including that it is:

• Only for families with a dependent child;

• Limited to five years; and

• Subject to state-set maximum benefits, ranging from:

  • $915 in New Hampshire; to

  • $162 in Arkansas in 2022.

TANF also has a “child only” benefit that does not look at caregiver income, often used to support children in kinship care. Nearly half of TANF cases are “child only”.4

TANF also has work requirements, tied to performance standard for states, using the wonktacularly named minimum work participation rate (WPR).

Since you noticed that there are many categories of activities within TANF, you likely have surmised that it covers many things that are… not what you would expect.

To illustrate that breadth and the risks it raises, we have a football-related example.

Warning- it’s little older than last night’s big game. So much so that, much like Matt Dillon, you may find yourself asking Cameron Diaz, hang on…

If you haven’t yet heard this Mississippi TANF story, it centers on over $90 million in TANF funds from 2016 to 2019 that went to some… questionable purposes.

This included $1 million in speaker fees to Favre (for events he did not attend…) and $5 million to build a volleyball stadium at the university his daughter was attending.

You can see more from this September 2024 hearing with Brett Favre himself. This issue is not unique; these kinds of uses are often permissible under the four purposes.

In addition, this January 2025 GAO report discusses fraud in TANF, highlighting the program’s vulnerabilities to misuse and offering recommendations to fix them.

However, none of this is to say that TANF is frivolous. To the contrary, you can see just how central it is to child welfare funding.

TANF and Child Welfare

ChildTrends has a great brief specific to TANF from its most recent Child Welfare Financing Survey.

From that we know that states spent ~$2.6 billion in TANF funds on child welfare services in State Fiscal Year 2020.

Some of the things TANF can fund that have relevance to child welfare policy are:

• Economic support to relative caregivers not in the formal child welfare system;

• Payments for kinship care and adoption/guardianship assistance;

• Foster care payments, particularly for non IV-E eligible children;

• Child Welfare Services, including:

  • Family preservation;

  • Adoption services;

  • Legal support;

  • Transportation; and

  • Independent living.

• Much more!

States can also transfer up to 10% of their TANF funds to SSBG, for even more flexible uses, many of which overlap with child welfare.

Learn More About TANF

• TANF data and reports

• See statute and regs here

• See relevant TANF sub-regulatory policy guidance documents here

As you can see, TANF has a broad array of uses related to child welfare policy, and it remains a key tool states use in their work

Last week we talked about Title IV-E of the Social Security Act, which matters because it’s 57%1 of federal child welfare spending, or $9.5 billion.2

This week, we are digging into Family First, a HUGE change to IV-E any child welfare wonk needs to know cold.

First, what is Family First? The 2018 Family First Prevention Services Act (AKA Family First AKA FFPSA, P.L. 115-123) is a bipartisan game changer for federal financing.

At its core, Family First is about three things:

1. Prevention. Well duh, Laris, it’s in the name! Yes, but this is the first permanent commitment of open-ended federal funds for it.

2. Kinship Care. The “Family First” part of the name isn’t just for keeping families together, but also to underscore the emphasis on placement with relatives.

3. Reducing and Reforming “Congregate Care”. The “Family First” name indeed has many layers, because it also refers to prioritizing family over institutions.

If you know nothing else, these are the three.

Prevention

Before Family First, a common refrain was “we have a 7 to 1 spending mismatch in child welfare”; for each $1 we spend on preventing foster care, we spend $7 on care.3

IV-E prevention pre-Family First was primarily of two limited flavors:

1. Title IV-E Waivers (Expired)

   1. 1994-2019, ~ half of states got cost-neutral waivers for flexibility/less eligibility paperwork.

2. So-Called “Traditional Candidacy” (Still Available)

   1. States and tribes can claim 50% match IV-E administrative dollars for services when an eligible child is a “candidate for foster care.”

You probably noticed both examples kept referring to eligibility, meaning we are back to discussing the Aid to Families with Dependent Children (AFDC) Lookback…

As a refresher, Title IV-E foster care maintenance payments, administrative funds, and guardianship assistance are open-ended federal funds, with a catch.

To be eligible for federal funding, a child must have been removed from a family that would meet the 1996 AFDC income requirements without adjusting for inflation.

Family First changes that:

• States and tribes get the option to establish a IV-E prevention program as of 10/1/19:

  • The Children’s Bureau maintains an ongoing list of IV-E prevention plans.

• Services are for children at imminent risk of foster care and parents/caregivers;

• Services must meet evidentiary requirements4 and be in one of three categories:

  • Mental health;

  • Substance use;

  • In-home parent skill-based services.

• Participating states receive 50% reimbursement until FY 2027, then Federal Medical Assistance Percentage (FMAP);5

• Unlike other aspects of IV-E, THERE IS NO AFDC LINK

Family First Kinship

A major challenge for kin caregivers is resources. Relative caregivers are often older, have lower incomes, and were not planning to be raising a child.

Navigator programs help kin caregivers find and access supports like health services, durable goods for children, legal assistance, or income security programs.

These programs existed before Family First, but it expanded them:

• States and tribes can use kinship navigator programs that are in the Title IV-E Clearinghouse

• Participating states receive 50% reimbursement until FY 2027, and then Federal Medical Assistance Percentage (FMAP);

• These services must be coordinated with state or local service coordination efforts and planned with input from kinship caregivers and families

• Again, THERE IS NO AFDC LINK

Congregate Care

The lead up to Family First also included a major emphasis on the harms of low quality institutional placements, and the benefits of appropriate high-quality treatment.

A 2015 Children’s Bureau report looked at congregate care data, finding nearly a third of children in congregate care were age 12 and under, and almost 30 percent didn’t have a treatment need to be there.

Family First created new standards for non-family settings:

• States could delay these rules until October 1, 2021.

• States and tribes can receive up to two weeks for any non-family placement;

• After two weeks, only “specialized settings” are eligible:

  • Programs for pregnant and parenting youth;

  • Family-based residential substance use disorder treatment;

  • Programs for youth who have been or are at-risk for sex trafficking;

  • Independent Living; and

  • Qualified Residential Treatment Programs (QRTPs).

    • The big new one, meant to ensure treatment quality and appropriateness.

You can learn more about the congregate care reforms and QRTP from this American Academy of Pediatrics report and an article in Pediatrics on it.6

Wonk Out and Go Deeper:

• Implementing the Family First Prevention Services Act: A Technical Guide for Agencies, Policymakers, and Other Stakeholders

December 2024 brought a huge bipartisan victory for children and families with enactment of Protecting America’s Children by Strengthening Families Act (P.L. 118-258). Woohoo!

But…what is Title IV-B anyway? Well, let’s wonk out together!

It’s hard to find a more objectively terrible name; it conjures memories of elementary school Roman numerals lessons and that most quintessentially 80s of Rocky movies.

Like so much law pertaining to health and human services, we find ourselves in the Social Security Act, which includes the Maternal and Child Health Block Grant (Title V), Medicaid (Title XIX), the Social Services Block Grant (Title XX), and the Children’s Health Insurance Program (Title XXI). Wonks like to refer to things as “Title _____”.

Title IV of the Social Security Act is a major bedrock of federal child welfare law and financing, in particular, Parts A (the Temporary Assistance for Needy Families/TANF program), B (AKA our friend Title IV-B), and E (the BIG child welfare $).

Title IV-B has two key parts:

Subpart 1: Stephanie Tubbs Jones Child Welfare Services Program. This provides a flexible discretionary investment each year (authorized at $325 million annually, but most recently appropriated at $269 million in FY24) for states and tribes.

These funds come with an array of expectations for policy and practice which states and tribes must demonstrate through plans they update every five years.

These are the plans that under PACSFA will now require input from people who have experienced the child welfare system. PACSFA also requires the plans to be publicly available.

The challenge is that the ability to implement a plan with fidelity is often a function of available resources, so we can charitably describe those plans as… aspirational.

Subpart 2: MaryLee Allen1 Promoting Safe and Stable Families (PSSF) Program.

PSSF is flexible and has two flavors of funding:

• Mandatory:

  • $345 million annually, until enactment of this latest reauthorization.

  • Because it’s mandatory, it comes each year without Congressional action

• Discretionary:

  • Authorized at $200 million annually.

  • As it implies, funding is at Congress’ discretion, which must act annually.

  • Most recently they provided $73 million in FY2024.

It focuses on the key priorities of:

• Family support (help families before they experience a crisis);

• Family preservation (help families in crisis avoid foster care);

• Family reunification (support families in healing after foster care); and

• Adoption promotion and support (make adoption easier and help adoptive families).

It also funds the Court Improvement Program (the only federal program for nearly 600,000 children’s cases annually) and the Regional Partnership Grants (RPG) that address how parental substance use drives child welfare involvement.

PACSFA emphasizes the role of PSSF in keeping families together, both before maltreatment occurs, to avoid unnecessary foster care, and to support kin when it is necessary.

Jurisdictions also use public-private partnerships with PSSF. That can make it easier to engage families suspicious of help from the agency that can take their children.

Why Wonky Words Matter for Funding

Last week we talked about the marquee takeaway of the Protecting America’s Children by Strengthening Families Act (P.L. 118-258)- $75 million more in annual mandatory funding for IV-B. Why does that matter?

In inflation-adjusted terms, funding for IV-B reached over $1 billion in FY 2004 and has been decreasing steadily since, most recently to $710 million in FY 2024.2 The bipartisan willingness to make these new investments is significant.

The Congressional Budget Office (CBO) is the non-partisan scorekeeper of federal legislation. Congress typically “offsets” spending by cutting elsewhere or raising revenue, what we DC nerds call a “pay-for”.

CBO thinks in 10-year windows. Once Congress provides 10 full years of funding, it’s permanent. It becomes part of the CBO “baseline”, which projects assumed spending. It then becomes permanent, so you don’t need to pay for it ever again.

Congress not only reauthorized IV-B with new funding, but spread it over a 10-year window so it got into the baseline, so that new funding is permanent!3

Title IV-E of the Social Security Act, is 57%1 of federal child welfare spending, or $9.5 billion.2

At a glance, IV-E covers:

• Foster Care. ~50 percent of IV-E.

• Adoption Assistance. ~40 percent of IV-E.

• Guardianship Assistance. ~3 percent of IV-E.

• Prevention Services. ~2 percent of federal IV-E (new and quickly growing).

• Kinship Navigation. <1 percent of IV-E.

• Older Youth Services. ~2 percent of IV-E.

• Administration.*3

How states and tribes get paid: IV-E is a reimbursement program. Each quarter they file Form CB-496 to receive a percent of eligible spending for eligible children.4

But who’s eligible?5

IV-E Eligibility6 (Party Like it’s 1996)

The (Relatively) Intuitive Part

• Age. <18, unless a state has extended foster care.

• How and why the child was removed from home.

  • Involuntary removals. A court must find:

    • The home was “contrary to the welfare" of the child;

    • The agency made “reasonable efforts” to prevent removal; and

  • Voluntary placement agreements (E.g. see the data drop below).

• Placement setting and foster care provider. Basic standards for placements.

• Timely and continued “reasonable efforts” for permanency; and

• Child’s Citizenship/Immigration Status. U.S. citizen or “qualified alien”.

The Weirdly Complicated Part

To break this down we need to go back to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, P.L. 104-193, AKA “The ‘96 Welfare Reform Law”).

So put on your Starter Jacket and hop in the Child Welfare Wonk Wayback Machine. You can decide if we listen to California Love or Wannabe on our way to ‘96!

Make it okay? Sorry I didn’t warn you about the Macarena, which you now realize is… everywhere… If that’s not quite your jam, I’ve got a Space Jam VHS.

So, the ‘96 welfare reform law turned the Aid to Families with Dependent Children (AFDC) program (a cash assistance entitlement) into Temporary Assistance for Needy Families (TANF, a block grant).

Congress actually debated block-granting foster care, too. Instead, they worked out the wonkiest compromise imaginable.

IV-E remained an open-ended entitlement, but part of the eligibility remains tied to the now-defunct AFDC program.

Introducing the AFDC Lookback

This wonky provision is known as the “AFDC Lookback,” because we have to “look back” to these old criteria from July 16, 1996. A child must be:

• Removed from their family which:

  • Deprived them of parental care or support;

  • Meets an income test;

    • Below the state’s AFDC eligibility on July 16, 1996 WITHOUT ADJUSTING FOR INFLATION; and

  • Meets an asset test of < $10,000.

With this test, the lowest annual income requirement for a family of four is $4,620 (Indiana), and the highest any state allows is $28,824 (New Hampshire).7

The lookback is a core driver of the falling federal share of child welfare financing. While federal funding is open-ended for eligible children, inflation erodes that population each year.

When wonks talk about “delinking”/“the delink”, they’re talking about eliminating this, which has happened for some aspects of IV-E, but not foster care.

Okay, we did it everybody! We got through eligibility. But, what does IV-E actually do?

Foster Care Maintenance Payments.

This covers things like room and board for foster care. What to know at a glance:

• Linked to AFDC, reimbursed at Federal Medical Assistance Percentage (FMAP);8

• Reimburses states and tribes for eligible placements in foster care, including:

  • Kinship Care;

  • Non-Relative Family Foster Care;

  • Specified Non-Family Settings9:

    • Programs for pregnant and parenting youth;

    • Family-based residential substance use disorder treatment;

    • Programs for youth who have been or are at-risk for sex trafficking; and

    • Qualified Residential Treatment Programs (QRTPs).

  • Up to two weeks for any non-family placement that isn’t a “specified setting”;

• About 1/3 covers placements, about 2/3 covers administration.

Adoption Assistance.

States and tribes provide supports to families who adopt children with special needs or circumstances from foster care. This reimburses some of those costs.

What to know at a glance:

• Reimbursement at FMAP to states and tribes for one-time payments to assist with adoption expenses and for monthly subsidies for adoptive families;

• De-linked as of June 30, 2024;10 and

• Gives the child categorical eligibility for Medicaid.

Guardianship Assistance.

This option allows states to receive support for guardianship assistance. What to know at a glance:

• Linked to AFDC, reimbursed at FMAP;

• Covers children with a legal guardian who was their kinship caregiver; and

• Optional- 42 states,11 DC, Puerto Rico, the Virgin Islands, and 11 tribes12 have approved plans.

Prevention Services.

The Family First Prevention Services Act (P.L. 118-123) allows IV-E funding without income testing for evidence-based services to safely prevent foster care. What to know at a glance:

• NOT linked to AFDC (and never was)

• Three service categories for the child and their parent or caregiver:

  • Mental health;

  • Substance use; and

  • In-home parent skill-based services.

• 50% reimbursement until FY2027, then FMAP.

Kinship Navigation.

The Family First Prevention Services Act enabled the use of IV-E funding without income testing for kinship navigation services. What to know at a glance:

• NOT linked to AFDC (and never was);

• Available for programs that meet evidentiary standards;

• 50% reimbursement.

Older Youth in Care and Aging Out (AKA Chafee).

The John H. Chafee Foster Care Program for Successful Transition to Adulthood (AKA Chafee or the Chafee program) funds supports and services for older youth in foster care and those aging out. What to know at a glance:

• Formula grants to states and tribes;

• Covers youth in/formerly in care, who left at 16 or older, or are likely to age out;

• Services including but not limited to:

  • Education;

  • Employment;

  • Financial management;

  • Housing; and

  • Emotional support and assured connections to caring adults.

• Education and Training Vouchers

  • Education and training needs for those who experienced foster care after 14;

  • Covers up to $5,000 per year per young person;

  • Can provide assistance up to age 26, for no more than 5 years.

Administration.

While it’s easy to think of IV-E as “the foster care program”, this is so much of the spending that it would be more accurate to call it “the admin program”.

What to know at a glance:

• Pays for “proper and efficient administration” of the state or tribe’s IV-E plan;

• AFDC link follows applicable category (e.g. no for prevention, yes for maintenance);

• Reimbursed at 50 percent generally, 75 percent for training;

• Covers so-called “traditional candidacy” or “pre-placement administration”, which are AFDC-linked services to prevent unnecessary foster care.

• See the CWPM here on the specifics for overall IV-E, and here for IV-E prevention administration (yup, they’re different…).

Whew, You Made It!

Child welfare policy is…complicated. But also, it’s not!

The simple version: child welfare policy is the laws and funding to prevent and respond to child abuse and neglect, support families to avoid unnecessary foster care, and provide care when children can’t remain safely with their family.

The complicated version: child welfare policy is an interlocking thicket of federal, state, tribal, and local laws and funds. While state and local funding is over half (~$15.9 billion1) of total annual child welfare spending (~$31.4 billion2), there are key federal laws and financing tools that drive policy, practice, and pecuniary details:

• Title IV-E of the Social Security Act: This is the biggie, about 57% of federal child welfare spending. It covers foster/kinship care for certain children (more on that to come!), adoption assistance & subsidized guardianship, prevention services, kinship navigator programs, supports for older youth, and more.

• Temporary Assistance for Needy Families (TANF): TANF is 19% of federal child welfare spending, including supports for kinship caregivers, foster care (for children not covered by IV-E, more on that later), and other child welfare services.

• Social Services Block Grant: This incredibly flexible funding source is 10% of federal child welfare spending, supporting an array of services.

• Medicaid: Nearly all children in foster care are eligible for Medicaid. Medicaid also provides 7% of federal child welfare financing, funding child welfare agencies for services they provide directly (e.g. targeted case management).

• Title IV-B of the Social Security Act: 4% of federal funding, but with key policy requirements. See more below!

• Child Abuse Prevention and Treatment Act (CAPTA): A rounding error when it comes to funds, but a key policy driver of child protective services.

• And so much more!

Child Welfare Wonk offers you more detail on all these and more, but for now, you have a sense of the breadth of relevant policy.