Title IV-E At a Glance

Title IV-E: Foster Care and Much More

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!

1. You can see the most recent ChildTrends IV-E resource here, derived from the overall Child Welfare Financing Survey.

2. The Children’s Bureau regularly updates and disseminates spending data for 8 fiscal quarters at a time. The most recent is here.

3. Support for the “proper and efficient administration” of the state or tribe’s IV-E plan. It’s baked into the percents here but on its own is huge, so while it sounds boring it’s super important!

4. These data are time lagged but public, so if you’re a wonk in training and Excel doesn’t frighten you (it’s really not that bad, I promise…), check out some expenditure and caseload data.

5. See this CRS Report to really get under the hood

6. As always, check in with the Child Welfare Policy Manual entry on IV-E eligibility for more details!

7. You can see more here.

8. Technically the reimbursement level for Medicaid, but often tied to other programs too. It ranges from 50 percent to 77 percent for states and Puerto Rico, and 83 percent for the U.S. Virgin Islands, Northern Mariana Islands, Guam, and American Samoa.

9. This is a whole big discussion on its own, which we will tackle more fully next week in a Family First deep dive

10. As a result of the 2008 Fostering Connections to Success and Increasing Adoptions Act(P.L. 110-351), as modified by Family First.

11. Alabama, Alaska, Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virgin Islands, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

12. The Aleut Community of St. Paul Island, the Cherokee Nation, Eastern Band of Cherokee Indians, Kenaitze Indian Tribe, the Keweenaw Bay Indian Community, Mashpee Wampanoag Tribe, the Navajo Nation, Pascua Yaqui Tribe, Penobscot Nation, Port Gamble S’Klallam Tribe, and Tolowa Dee-ni’ Nation of Smith River.