A FActSheet 

For FAmilieS 

June 2004 

Esta hoja informativa es 

disponible en español 

www.childwelfare.gov/ 

pubs/sp_subsid.cfm 

Adoption Assistance for 

Children Adopted From 

Foster Care 

In every State there are children with special needs 

waiting in foster care for adoptive families. The 

most recent data estimate that 126,000 children 

are available to be adopted from foster care.1 In 

the past, the costs of care and services were major 

obstacles to parents who would otherwise adopt 

and love these children, and most were not placed 

	 This	figure	is	according	to	Adoption	and	Foster	Care	Analysis	and	

Reporting	System	(AFCARS)	data	for	200.	See	http://www.acf.hhs.gov/

programs/cb/stats_research/afcars/tar/report8.htm.	

What’s inside: 

• Federal Title IV-E adoption assistance 

• State adoption assistance 

• Arranging adoption assistance 

U.S. Department of Health and Human Services 

Administration for Children and Families 

Administration on Children, Youth and Families 

Children’s Bureau 

Child Welfare Information Gateway 

Children’s Bureau/ACYF 

1250 Maryland Avenue, SW 

Eighth Floor 

Washington, DC 20024 

703.385.7565 or 800.394.3366 

Email: info@childwelfare.gov 

www.childwelfare.gov 
 

Adoption Assistance for Children Adopted From Foster Care www.childwelfare.gov 

for adoption. The Adoption Assistance and 

Child Welfare Act of 19802 provided the first 

Federal subsidies to encourage the adoption 

of children from the nation’s foster care 

system. These subsidies, known as adoption 

assistance, serve to minimize the financial 

obstacles to adoption. In addition, other 

types of assistance often are available to 

help with medical care or other services. 

Adoption assistance serves to remove barriers and contribute to an increase in adoption of children with special needs. 

Federal title iV-e

Adoption Assistance

Adoption assistance from the Federal Government is administered under the Federal 

Title IV-E adoption assistance program. 

Payments to the parents of an eligible child 

with special needs can take the form of 

either one-time (nonrecurring) adoption 

assistance or ongoing (recurring) adoption 

assistance. These funds are paid through the 

State agency or through another public or 

nonprofit private agency and are available 

for children being adopted from foster care. 

Nonrecurring Adoption Assistance 

Nonrecurring adoption assistance is paid 

or reimbursed for one-time reasonable 

and necessary expenses directly related to 

the legal adoption of a child with special 

needs that have not been reimbursed from 

other sources or funds. These reimbursable 

expenses may include the home study fees, 

2	 See	P.L.	96-272	Adoption	Assistance	and	Child	Welfare	Act	

of	980	at	http://thomas.loc.gov/cgi-bin/bdquery/z?d096:

HR03434:@@@D|TOM:/bss/d096query.html.	

attorney fees, replacement of the birth 

certificate, and travel for visits to the child 

(including mileage, lodging, and meals). The 

Federal maximum for this type of assistance 

is $2,000 for each adoptive placement. 

Some expenses in excess of this amount 

may be tax deductible. 

recurring Adoption Assistance 

Ongoing adoption assistance provides funds 

that may be used for any identifiable need 

of the child. These usually take the form 

of monthly payments to the parents of 

eligible children. The maximum payment 

amount may not exceed the amount that 

would have been paid for maintenance if 

the child had remained in a foster home in 

that State. Payments can continue until the 

child reaches age 18 (or until age 21 where 

the State determines that the child has a 

physical, mental, or emotional disability), 

and these payments continue even if the 

family moves to another State. While adoption assistance is not taxable, portions could 

be taxed if the family cannot prove that 

the amount spent on the child’s support 

was more than the amount of assistance 

received. Families are advised to consult a 

tax professional. 

3	 See	the	Children’s	Bureau	website	for	further	information:	

http://www.acf.hhs.gov/j2ee/programs/cb/laws_policies/laws/

cwpm/policy_dsp.jsp?citID=50#745.	

4	 For	a	more	complete	explanation,	see	http://www.nacac.

org/subsidyfactsheets/taxes.html.

This	material	may	be	freely	reproduced	and	distributed.	However,	when	doing	so,	please	credit		

Child	Welfare	Information	Gateway.	Available	online	at	www.childwelfare.gov/pubs/f_subsid.cfm. 2 
567

5	 See	the	text	of	the	P.L.	96-272	Adoption	Assistance	and	

Child	Welfare	Act	of	980	at	http://www4.law.cornell.edu/

uscode/42/673.html.

6	 This	requirement	dates	back	to	the	Title	IV-E	plan	that	was	

in	effect	prior	to	enactment	of	P.L.	04-93	and	uses	the	AFDC

definition	of	“dependent	child”	that	was	in	effect	July	6,	99

P.L.	04-93	replaced	the	AFDC	program	with	the	Temporary	

Assistance	for	Needy	Families	(TANF)	program,	but	the	

definition	of	“dependent	child”	is	still	used.	See	www.acf.hhs.

gov/programs/ofa/	for	more	information	on	the	TANF	program.

7	 For	the	full	text,	see	http://www4.law.cornell.edu/

uscode/42/673.html.

6.	

Adoption Assistance for Children Adopted From Foster Care www.childwelfare.gov 

eligibility for Federal iV-e Adoption Assistance 

Eligibility for Federal Adoption Assistance has two main components, as outlined in this table: 

Special Needs Determination 

The child must be determined to have “special needs,” 

which include all three requirements listed below.5 (This 

is required for both nonrecurring and recurring Federal 

adoption assistance.) 

1. The child cannot or should not be returned home to 

his or her parent(s). 

AND 

2. The child has a “factor or condition” (uniquely defined 

by each State) that qualifies him or her as having 

“special needs.” Depending on the State, this factor or 

condition may include: 

• Ethnic background 

• Age 

• Membership in a sibling group 

• Medical, physical, or emotional condition or 

handicap 

The factor or condition must prompt the conclusion that 

the child cannot be placed without providing adoption 

assistance or medical assistance. 

AND 

.An attempt to place the child without adoption 

assistance was made but was unsuccessful except 

where it would be against the best interests of the 

child.7

Eligibility Requirements 

The child must meet any one of four eligibility requirements 

provided by the law. (These are required only for recurring 

adoption assistance.) 

1. The child was eligible for AFDC6 during the month in which 

court proceedings were initiated or was eligible within 6 

months prior to that time. 

OR 

2. The child was eligible for Supplemental Security Income (SSI) 

programs under the Social Security Act before adoption. (A 

guide to Social Security benefits is available from the Casey 

Foundation at http://www.casey.org/Resources/Publications/ 

GuideTOSSI.htm.) 

OR 

. The child’s parent was in foster care and receiving Title IVE funds that covered both the parent and child when the 

adoption was initiated. 

OR 

.The child previously received adoption assistance, and his or 

her adoptive parent died or the adoption was dissolved. 

In some cases, prospective adoptive parents 

may know early on whether the child they 

are considering for adoption is eligible for 

adoption assistance. Such information may 

be included in a photolisting and in background information provided to prospective 

parents by the agency or social worker. (See 

the Information Gateway factsheet Obtain-­

ing Background Information on Your Prospective 

Adoptive Child at www.childwelfare.gov/pubs/ 

f_­background.cfm. 

Family income and Determination 

of Need 

Federal law mandates that the resources of 

the adoptive parents cannot be considered 

when determining a child’s eligibility for 

This	material	may	be	freely	reproduced	and	distributed.	However,	when	doing	so,	please	credit		  Child	Welfare	Information	Gateway.	Available	online	at	www.childwelfare.gov/pubs/f_subsid.cfm.
 

 

 

 

 

 

 

 

Adoption Assistance for Children Adopted From Foster Care www.childwelfare.gov 

Title IV-E adoption assistance.8 However, the 

circumstances of the family and the needs 

of the child may both be taken into consideration when determining the amount 

of assistance.9 

Medical Benefits. Children eligible for Title 

IV-E adoption assistance also are eligible for 

medical benefits under Title XIX (Medicaid). 

States may offer additional services through 

Title XX, which is a flexible block grant of 

monies from the Federal Government to 

State governments. Title XX services may 

include counseling, legal aid, respite care, 

information, referral, and transportation services. States may offer additional adoption 

preservation services as well. Each State’s 

Title XX program is different. Families 

should check with their State agency to 

determine what services are available. 

State Adoption 

Assistance

State adoption assistance programs provide 

assistance for children with special needs 

who are not eligible under the Federal IV-E 

adoption assistance program. This assistance 

is funded by State and/or county dollars 

and is designed for children who are neither 

AFDC- nor SSI-eligible prior to adoption. 

Eligibility criteria for these programs vary by 

State, but State adoption assistance programs 

generally fall into three categories: 

8	 See	http://www.acf.hhs.gov/j2ee/programs/cb/laws_policies/

laws/cwpm/policy_dsp.jsp?citID=8	to	read	the	section	of	the	

Child	Welfare	Policy	Manual	that	says	that	States	cannot	employ	

a	“means	test”	in	negotiating	adoption	assistance	agreements.

9	 The	full	text	of	the	law	can	be	found	at	http://www4.law.

cornell.edu/uscode/42/673.html.	

Medical assistance covers some or all the costs 

related to a child’s specific medical condition 

that are not covered by the family’s health 

insurance, as well as associated therapy, rehabilitation, and special education. (Most States 

call this assistance Medicaid; other States call 

it something else.) 

Direct payment assistance refers to direct payments to the adoptive family to help meet 

the special physical, mental, or emotional 

needs of the child. 

Supplemental adoption assistance varies 

greatly by State. Some States cover a child’s 

emergency or extraordinary need; less often, 

assistance consists of repeated payments for 

services not covered by the medical or direct 

payments. Each State determines what is 

an allowable cost. Some States make this 

available for  months, others for 6 months, 

while still others provide one-time coverage 

for a specific service. 

eligibility for State Adoption 

Assistance and other Assistance 

Eligibility for State adoption assistance 

varies but is linked to (1) determination of 

“special needs” from the Federal adoption 

assistance law (see above) and (2) unique 

aspects of the State adoption assistance 

program. 

States sometimes consider the prospective 

adoptive family’s income and resources to 

determine if the family meets State eligibility requirements. 

This	material	may	be	freely	reproduced	and	distributed.	However,	when	doing	so,	please	credit		  Child	Welfare	Information	Gateway.	Available	online	at	www.childwelfare.gov/pubs/f_subsid.cfm.
 

Adoption Assistance for Children Adopted From Foster Care www.childwelfare.gov 

Arranging Adoption 

Assistance 

When a State agency has determined that 

the child has special needs (as defined 

by that State), the possibility of adoption 

assistance is discussed with the prospective 

adoptive parents. States are responsible for 

telling prospective adoptive parents about 

the availability of adoption assistance.10 

Most children registered with agencies as 

having special needs have already been classified as eligible for adoption assistance. 

Once a petition for adoption has been filed, 

a final determination of the child’s eligibility under Title IV-E or the State program is 

made. The family applies for the adoption 

assistance to the State agency, through the 

local office. If approved, an adoption assistance agreement is drawn up between the 

public agency and the prospective parents, 

specifying the types of adoption assistance 

to be provided. This is usually done around 

the time of placement and must be done 

before finalization of the adoption. Each 

State has its own regulations for arranging 

a State-only subsidy, and each State establishes its own procedures to achieve compliance with the Federal Title IV-E program in 

arranging this type of assistance. 

Deferred Adoption Assistance 

In some States, it is possible for adoptive 

parents to defer adoption assistance until it 

is needed to meet the needs of the adopted 

0	 See	http://www.acf.hhs.gov/j2ee/programs/cb/laws_policies/

laws/cwpm/policy_dsp.jsp?citID=76	for	information	from	the	

Child	Welfare	Policy	Manual	stating	that	it	is	the	responsibility	of	

the	State	to	notify	parents	of	adoption	assistance	availability.

child. In these cases, parents can elect to 

receive a Medicaid card only and sign the 

agreement with the payment level of $0 – to 

be raised to meet the needs of the child at a 

future date. The adoption assistance agreement between the parents and the public 

agency is written in such a way as to clearly 

identify what event(s) would trigger services. Often, psychiatric reports and other 

documentation are necessary to justify the 

potential need for a future subsidy. 

Appealing an Adoption 

Assistance Decision 

Adoptive parents may appeal the State agency’s decision regarding adoption assistance 

or the adoption assistance amount by using 

the State’s fair hearing and appeals process. 

If the family is appealing a decision regarding a Title IV-E subsidy, the family files an 

appeal through the local agency that administers Title IV-E assistance. The local agency 

should inform the family about steps in the 

State fair hearing process. During the process, some families choose to hire an attorney or seek the advice of advocacy organizations for children with special needs. If a 

family wishes to appeal a decision regarding State adoption assistance, they should 

consult the local agency director about the 

existence of and steps in the State appeals 

(or “fair hearing”) process. 

conclusion 

Adoption assistance exists to help parents 

afford the costs associated with raising a 

child adopted from foster care. Current 

trends indicate that States are providing 

This	material	may	be	freely	reproduced	and	distributed.	However,	when	doing	so,	please	credit		

Child	Welfare	Information	Gateway.	Available	online	at	www.childwelfare.gov/pubs/f_subsid.cfm. 5 
Adoption Assistance for Children Adopted From Foster Care www.childwelfare.gov 

more and more such assistance, as the population of children in foster care shifts and 

a greater percentage of these children are 

adopted.11 By providing financial assistance 

to these families, the State and Federal subsidy programs minimize the financial barriers to these adoptions, so that more children 

find permanent homes and families. 

Adoption assistance payments are not the 

only type of financial assistance available to 

adoptive parents. Prospective adoptive parents should explore all potential resources 

to help make adoption an affordable option. 

The Information Gateway website (www. 

childwelfare.gov) offers several factsheets 

that provide this type of information. For 

example: 

• Information on tax benefits and reim-

-

-

-

bursement for one-time adoption costs is 

included in the factsheet Costs of Adopting 

(www.childwelfare.gov/pubs/s_­cos/index. 

cfm). 

• Information on employer benefits is con

tained in the factsheet Employer-­Provided 

Adoption Benefits (www.childwelfare.gov/ 

pubs/f_­benefi.cfm). 

• Information on Funding Resources for Adop-­

tion Services (www.childwelfare.gov/pubs/ 

rl_­dsp.cfm?subjID=59&rate_­chno=AR

007A) lists contact information for 

national organizations that provide adop

tion funding information. 

	 See	http://aspe.hhs.gov/hsp/fostercare-issues02/adoption/

index.htm	for	F.	H.	Wulczyn	and	K.	B.	Brunner’s	(2002)	paper	on	

statistics	and	projections	of	children	adopted	from	foster	care.	

This	material	may	be	freely	reproduced	and	distributed.	However,	when	doing	so,	please	credit		

Child	Welfare	Information	Gateway.	Available	online	at	www.childwelfare.gov/pubs/f_subsid.cfm. 6