Ohio's System of Funding the IV-E Foster Care Maintenance and IV-E Adoption Assistance Programs Functions as a Disincentive for Higher Adoption Assistance Payments

Ohio County Agencies Have Little Incentive to Negotiate Adoption Assistance Payments at or Near a Child's Foster Care Payment Rate

NOTE: The work of the ODJFS sponsored project to improve the procedure for negotiating Title IV-E Adoption Assistance continues and will extend into 2024. I invite you to express your comments and concerns to me at tohanlon@gmail.com. I will share them with the work group. Also, underlined portions in the text below are live links to previous posts.

In order to carry out its charge to “strengthen and standardize” the negotiation of Title IV-E Adoption Assistance, Ohio’s Adoption Assistance Negotiation Process Work Group must address the significant gap between family foster payment rates and Title IV-E Adoption Assistance payment rates. Ohio’s peculiar system of funding Title IV-E Foster Care Maintenance and IV-E Adoption Assistance has played a key role in establishing and fueling this longstanding disparity.

The Gap Between Foster Care Payments and Adoption Assistance

In an earlier post, dated August 31, 2022, I stated that the average monthly foster care payment was $870, compared with an average adoption assistance payment of $414. My claim was based on data from the Ohio Department of Job and Family Services (ODJFS) for the July-September Quarter of 2021. See “Why Do Adoption Assistance Payments in Ohio Average Less Than 50% of Foster Care Payments?”

According to statewide data from ODJFS for October 2022, the median adoption assistance payment was $500 and the mean payment was $563. See “Adoption Assistance Payments for County Agencies Across Ohio,” October 2022. I didn’t have access to statewide foster care data for that month, so I don’t know if adoption assistance payments continued to average less than half of foster care payment rates.

As I mentioned last week, the increase in ODJFS funding for the non-federal portion of adoption assistance beginning in January 2023, may be closing the gap in cases where the adopting parents are well-informed, but the disparity between foster care and adoption assistance payments remains a fundamental challenge to Ohio’s Adoption Assistance Negotiation Process Work Group.

How Has Ohio’s System of Funding for Title IV-E Foster Care Maintenance and IV-E Adoption Assistance Differed from That of Other States?

Ohio is the only state we have examined in which the state agency and counties do not share financial responsibility for both the non-federal portion of IV-E Adoption Assistance and IV-E Foster Care Maintenance.  When Ohio established the IV-E programs in 1982, the state assumed financial responsibility for the non-federal portion of IV-E Adoption Assistance payments and Ohio counties assumed responsibility for the non-federal portion of IV-E Foster Care Maintenance payments.  

Most other states, we have looked at, apply the same formula for funding the non-federal portion of both IV-E Adoption Assistance and IV-E Foster Care Maintenance.  In a number of state administered child welfare systems such as Wisconsin, Washington and Kentucky, the state agency provides all of the matching non-federal funds for the two IV-E programs.  In state supervised, county administered child welfare systems, non-federal IV-E matching funds are provided by a combination of state and county dollars.  For example, in Colorado, the state agency provides 60% of the non-federal matching funds for IV-E adoption assistance and foster care maintenance and the county agencies provide 40%.  Considering the Federal Financial Participation rate of 50% for Colorado, the state agency provides 30% of the total IV-E payments and the counties 20%.

How Has Ohio’s Funding Model Contributed to the Sizable Gap Between Foster Care and Adoption Assistance Payments?

Ohio was not only unusual in assigning state and county financial responsibility to separate IV-E programs, but the state placed severe restrictions on its contribution to IV-E Adoption Assistance payments. Until 2023, the state limited its non-federal match to adoption assistance payments of $250 a month or less.  This policy led to a growing gap between IV-E Foster Care Maintenance payments, which increased over time and IV-E Adoption Assistance payments, which were, for the most part, frozen at $250 a month until 1992. 

In 1992, a state administrative rule change stipulated that federal funding for adoption assistance payments would be available up to the child’s foster care payment rate, if the county agency agreed to fund the non-federal portion of any adoption assistance payment beyond $250. This policy resulted in increased adoption assistance payments in some counties, but the large gap between foster care and adoption assistance remained and negotiations agencies became more contentious.

In January 2023, the state raised its financial participation rate to the non-federal portion of IV-E Adoption Assistance payments up to $350.  See “Breaking News! Ohio Raises State's Financial Participation in IV-E Adoption Assistance Program.” County agencies are responsible for the non-federal portion of the remaining adoption assistance payment above $350. Current foster care payment rates, however, are often hundreds of dollars higher than $350 a month.

Ohio’s Model of IV-E Funding Scheme Has Created Fiscal Disincentives for County Agencies to Negotiate Higher Adoption Assistance Payments

Why have Ohio County agencies been so resistant to adoption assistance payments at or near the child’s foster care payment? There are probably several reasons, but Ohio’s system of funding IV-E programs appears to be a major factor.

As years passed, and contracts with private foster care providers became the norm, foster care payment rates have increased. Because Ohio counties are required by law to provide and fund foster care services, they have little financial incentive to invest local matching funds in an effort to bring adoption assistance payments in line with the child’s foster care payments.

In recent years, the steady decline in the percentage of IV-E eligible foster children in Ohio has also encouraged counties’ resistance to adoption assistance payments on a par with the child’s foster care payment rate. Between July-September, 2014 through July-September 2019, the percentage of IV-E eligible foster children fell from 61.76% to 51.16%. See “Why Do Adoption Assistance Payments in Ohio Average Less Than 50% of Foster Care Payments?” Instead of dividing funding responsibilities with the state, Ohio county agencies must pay 100% the cost for non-IV-E foster children in their custody.

The Need for Increased State Funding for IV-E Adoption Assistance

According to ODJFS, Ohio has been providing flexible funding to the counties in the form of the State Child Protection Allocation (SCPA).  The DeWine Administration has increased the amount each biennium and for State Fiscal (SFY 24) it is $145 million and for SFY 25 it will be $155 million. The SCPA may be used to fund foster care among a variety of other services.

As long as Ohio’s IV-E funding system continues to create fiscal disincentives for Ohio County Agencies to negotiate adoption assistance payments in the vicinity of the child’s foster care payments, the unjust gap between foster care and adoption support will remain. Establishing a funding scheme in which the state agency and counties are both responsible for providing the non-federal portion of IV-E Foster Care Maintenance and IV-E Adoption Assistance would seem to present a logical means of addressing current disincentives for increasing adoption assistance payments.

If that form of radical restructuring is not practical or politically feasible, then the state should consider how to provide increased funding for the non-federal portion of adoption assistance in order to achieve parity with family foster care payments.