Obama Budget Raises Issue of Outdated Federal Foster Care Eligibity Criteria

Lately, the issue of changing how the federal government determines whether or not a child is eligible for federal foster care reimbursement keeps surfacing.

First, in March, the General Accounting Office (GAO) released a report detailing 14 proposals that would address income eligibility requirements for federal foster care reimbursement. As those aware of the issue know, for a child to be federally eligible for foster care, he or she must have been removed from a home that meets the 1996 income eligibility standard for the now defunct Aid to Families with Dependent Children (AFDC) program, which has not been adjusted for inflation.

In the 17 years that have passed since 1996, fewer and fewer children have been determined to be eligible for federal foster care, leaving states and counties bearing an increasing share of the cost.

Then, earlier this month, this reality was acknowledged in President Barack Obama’s budget for fiscal 2014, released last week:

“The Title IV-E caseload decline can be attributed to several factors, including a reduction in the overall foster care population, increased adoptions and notable fixed-income eligibility guidelines…. Fewer and fewer families meet these static income standards over time, thereby reducing the number of children who are eligible for Title IV-E foster care maintenance payments.”

The budget summary reports that nationally, Title IV-E eligibility has dropped from 51.8 percent of all children in foster care in 2000 to 44 percent in 2012. California’s federal eligibility has followed a similar trajectory, falling from 52.72 percent of cases in July 2001 to 44.06 percent of cases as of June 2011.

The question considered in the GAO report is whether or not a means test should be used as a basis for federal foster care eligibility. Of the 14 proposals reviewed in the report, 12 propose to entirely eliminate a means test, making all children in the United States who are otherwise eligible for foster care eligible for federal funding. Two of the proposals recommend an alternative means test, which would update the 1996 income eligibility criteria.

The issue is particularly pressing here in California, with the implementation of 2011 “realignment”, which placed the full non-federal share of cost of foster care onto the 58 counties. Previous to the realignment, the cost of providing foster care for non-federally eligible youth was shared between the counties, at a rate of 60 percent counties and 40 percent state.

The issue has important implications for the health and well-being of California’s CalWORKs program as well. As fewer children are determined to be ineligible for federal foster care, those youth placed with a relative will utilize CalWORKs, which is what our state provides to non-federally eligible youth living with relatives. But unlike federal foster care, CalWORKs is not an open-ended entitlement; rather, it’s a block grant that has been flat-funded since 1996. Therefore, the shrinking rate of federal eligibility for foster care is impacting our ever-growing population of low-income families who are seeing scarce CalWORKs funds diverted.

The John Burton Foundation and the Alliance for Children’s Rights have drafted a letter to the California Congressional Delegation urging them to update the 1996 AFDC income eligibility guidelines. If your organization would like to join the letter, please contact Amy Lemley by May 10.

Amy Lemley is Policy Director for the Oakland, Calif.-based John Burton Foundation for Children Without Homes.

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