State Child Welfare Policy Guide: Part of the Policy Matters Series

4.3 Eliminating financial disincentives

To ensure adequacy and parity of financial support for kinship caregivers, payments should be equal to standards recently established for the basic care of children in foster care. More than 54 percent of children in kinship care live in families with incomes below 200 percent of the poverty line. Many times, a relative's reasons for not taking in a child are strictly financial. In other families, caregivers struggle financially to provide adequate care for the child. Financial assistance that helps children participate in the benefits of relative care includes:

· Assistance for children in kinship care who are not in state custody, including state-only funds and TANF child-only grants,

· Foster care payments,

· Subsidies for children in the custody of permanent legal guardians (see Policy Area 4.1),

· Adoption assistance.

Incentives to permanency and family connections are promoted by ensuring parity of payment levels and duration of all forms of assistance to children in kinship care arrangements. As of 2004, 11 states required that monthly subsidy levels for children living in permanent guardianship must equal foster care payments. In New Mexico and North Carolina, the payment must equal the higher adoption assistance payment. [i] However, in addition to parity, payment levels must be adequate to recruit kinship caregivers, to promote stable placements with kin, and to provide safe and quality care to children.

Recently Children’s Rights, the National Foster Parent Association and the University of Maryland School of Social Work established a basic foster care payment rate for each of the 50 states that is based on an analysis of the real costs of providing care. [ii] Payments to caregivers should equal these levels.

Policy Options: States can eliminate financial disincentives for kinship care by requiring that financial assistance for the care of children in all types of kinship care arrangements meets or exceeds standards established for minimum, adequate foster care or adoption assistance rates.