With Foster Care Entitlement, Swapping AFDC for TANF Might Not Have the Intended Impact

Last week, the Chronicle ran the first in a series of stories describing how the federal government pays for child welfare; and the movement afoot to reform foster care financing. Federal dollars only flow out of the Title IV-E entitlement for youths whose birth families would have qualified for financial assistance in 1996 under the now-defunct welfare program: Aid to Families with Dependent Children (AFDC).

Amidst the many finance reform ideas floating in the community and policy circles, the most consensus can be found around the notion that foster care funding should be de-linked from the antiquated AFDC eligibility standard. The reasoning here is obvious, the standard is more than 15 years old and hasn’t been adjusted for inflation.

From a recent Government Accountability Office report on the subject:

“Due, in part, to fewer families meeting these income standards, the number of children who currently meet Title IV-E eligibility requirements has declined.”

Some would like to see the government move to a process that does not involve any test; as in, if a youth is brought into foster care, the state can be reimbursed.

Others support the idea of replacing the AFDC standard with one based on eligibility for Temporary Assistance for Needy Families (TANF), the welfare program that succeeded AFDC.

Data compiled by the Chronicle suggests that the latter notion, involving a TANF substitution, might not bring about the kind of change that proponents hope for.

The Imprint compared the 1996 AFDC income eligibility ceilings for families of three to the current income eligibility ceilings for TANF. We found that in many states, a switch from an AFDC test to a TANF test would make little difference in terms of increasing the universe of children who are IV-E eligible. In others, it might actually make that universe smaller.

There are 12 states where the income eligibility test for AFDC and TANF were less than $100 apart, including some highly populous ones like: Pennsylvania, Ohio, New York, Indiana and Colorado. In those states, one could reasonably expect that the amount of IV-E eligible youth would not change, or at least not because of a move away from AFDC.

Then there are the 16 states where TANF is actually harder to qualify for than AFDC was, and not just by a little. The TANF eligibility ceiling is more than $300 lower in 12 of those 16 states, and it’s more than $600 lower in three: Wisconsin, Florida and New Hampshire.

In those states, a shift from AFDC toward TANF could lower the number of IV-E eligible children.

On the other side of the coin, there are a group of states where the change to TANF could significantly increase the IV-E eligible population. Of the 22 states with a TANF ceiling that’s $100 higher than AFDC, 12 have a ceiling that’s $300 or higher.

Virginia, for example, has a TANF ceiling of $1,341, more than $1,000 higher than its AFDC test. A few other high-population states, including California and Michigan, would have the IV-E income ceiling rise by more than $200.

It is also worth noting that a failure to meet the AFDC income test is not the only reason a child could be deemed ineligible for IV-E.

“Almost no research has been done on the reasons states find children ineligible for Title IV-E foster care,” according to a Congressional Research Service report from 2012.

A 26-state survey conducted by Child Trends in 2012, which asked states to report anonymously about eligibility determinations for fiscal 2008 and 2010, found that parental income was the underlying reason for ineligibility in about 40 percent of the cases.

Most of the states in the survey reported three other factors that caused ineligibility decisions:

1) A lack of the proper judicial determination at the dependency court level (25 states)

2) An agency placing a child in a foster care setting that is not approved for IV-E reimbursement (18 states)

3) An agency placing a child in a setting that is allowable, but was not properly licensed (22 states)

Those three reasons were, in at least a few states, much bigger factors than the AFDC income standard. For example, one state reported that 89 percent of its ineligibility determinations related to lack of licensing for foster homes or facilities.

So in 28 of 50 states, a shift to a TANF litmus test on IV-E would either make little difference, or make the wrong kind of difference. This suggests it might make more sense to recalibrate IV-E without an income test, or at the very least use a more inclusive threshold than TANF.

States Where TANF Is Harder to Qualify for Than AFDC: Ala., Ariz., Ark., Fla., Idaho, Ill., La., Mo., N.H., N.J., Texas, Vt., Wash., W. Va., Wisc., Wyo.

States Where It’s About the Same: Colo., Conn., Del., Ga., Ind., Md., Miss., N.Y., Ohio, Okla., Penn., Utah

States Where TANF Easier to Qualify for Than AFDC: Alaska, Calif., Hawaii, Iowa, Kan., Ky., Maine, Mass., Mich., Minn., Montana, Neb., Nevada, N.C., N.D., N.M., Ore., R.I., S.C., S.D., Tenn., Va.

John Kelly is the editor-in-chief of The Imprint

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