Do you understand or take advantage of the financial assistance available to families that adopt through the U.S. foster care system? It’s highly likely that you, or another adoptive parent you know, don’t. Approximately 70-80% of the children adopted from foster care nationwide are eligible for financial assistance from the federal government. Still, many adoptive parents know little about the benefits of the adoption subsidy.
Understanding the Foster Care Adoption Subsidy Process
Some foster care agencies call it Adoption Assistance, AAP, or a stipend. These four key elements of the process can help you understand how to apply for it, set it up before adoption finalization, and negotiate the amount that meets your child’s needs.
Understanding Your Child’s Eligibility
Eligibility for this financial support is based on the adopted child, not their parents. Criteria for eligibility can vary from state to state, so check with your child’s caseworker for the details. You can also go to Families Rising (formerly the North American Council on Adoptable Children), which maintains a page of resources, including information by state.
Your child’s eligibility is based on their age, any disabilities they may have, race, ethnicity, and possibly other factors (again specific to your state). Most children are eligible for Title 4E funds, which is the federal government’s name for this assistance program.
Keep in mind that the state in which the child is born (or adopted from) will issue the benefits, not necessarily the state in which the adoptive parents and child currently live.
Children adopted through private agencies may also be eligible for the foster care adoption subsidy, but the process can be more challenging.
Understanding the Timing of the Adoption Subsidy.
You must settle your child’s adoption assistance agreement before their adoption is finalized. Even if you don’t anticipate needing financial assistance now, you cannot predict your adoptee’s future or the needs that may arise. Many conditions common to children in, or adopted from, foster care, such as the impacts of prenatal substance exposure, may not become evident until your child is in school.
Crafting and signing a zero-dollar agreement before adoption finalization, to be activated later, is a great safeguard to have in place.
Get our FREE GUIDE to raising kids with prenatal exposure
Understanding What to Include
Your child should get access to Medicaid with a card issued from the state where the parents and child currently reside. This subsidy agreement reimburses up to $2,000 in non-recurring adoption expenses.
Depending on the state where this adoption subsidy originates, support might also include payment for childcare, respite care, house modifications, support services, and more. A handful of states provide college tuition assistance for children adopted from foster care, usually at a public institution.
Benefits vary from state to state and differ for each child, so carefully review your state’s parameters.
Understanding How to Negotiate Your Adoption Subsidy
Some states will automatically give an adoptive family the maximum assistance available. Others will offer a lower amount to start. When the amount your state offers is significantly less than the amount of support your child received while in foster care, you may negotiate the amount with the state.
If you already have an adoption attorney specializing in negotiation, they can advocate for the agreement amount on your behalf. For those not supported by an adoption attorney, consider how to educate yourself more thoroughly on subsidy agreements and what resources your child needs.
Our favorite places to learn more about the Foster Care Adoption Subsidy Process include:
- Foster Care Adoption Subsidies: What is Reasonable and How to Negotiate – an online course from CreatingaFamilyEd.org
- Families Rising (formerly NACAC) – Education resources for adoptive families
- AdoptUSKids.org – Support, including subsidies and services, for adoptive families
- Children’s Bureau – Title IV-E Adoption Assistance resource page
- National Disability Rights Network
Don’t Forget the Adoption Tax Credit!
Finally, if your child qualifies for the foster care adoption subsidy, they also qualify as “special needs” when claiming the federal Adoption Tax Credit. Your adoption assistance agreement is the documentation necessary to prove this eligibility to the IRS, so keep your copy of the adoption subsidy agreement in a secure place for use when filing your claim to the Adoption Tax Credit. Your Annual Adoption Tax Credit Guide: 2023 will help you understand how to use this “special needs” designation and maximize your claim to the Adoption Tax Credit.
Image Credits: Andrea Piacquadio; Nicola Barts; Michael Burrows
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