Adoption Assistance Payments
On October 2, 1990, the Children's Bureau of the Department of Health and Human Services released a Policy Interpretation Question (PIQ) concerning "Title IV-E adoption assistance agreements and the use of a means test" (ACYF-PIQ-90-02). The document responds to several questions raised by states about (1) employing a means test to set the amount of assistance payments adoptive families would receive under the program; and (2) issues for consideration in the negotiation of the assistance agreement. The purpose of this Issue Brief is to address questions to the Secretariat from member states that were prompted by the PIQ.Background
The adoption assistance program under Title IV-E of the Social Security Act provides federal supports to encourage the adoption of children with special needs, i.e., Title XIX Medicaid, Title XX Social Services and other agreed upon benefits including financial assistance. States are required to enter into adoption assistance agreements with adoptive parents. Legally enforceable contracts, these agreements are critical elements in removing the disincentives to special needs adoption. Through assistance agreements, parents and the states identify the manner and nature of the help that would be necessary to deliver the ordinary and special care required by adopted children.
Eligibility for adoption assistance requires the children to satisfy the conditions for participation in the Title IV-A Aid to Families with Dependent Children (AFDC), Title IV-E Foster Care or Title XVI Supplemental Security Income (SSI) programs of the Act. In addition, section 473(c) of Title IV-E provides the parameters within which states define the circumstances that render children hard to place for adoption without assistance, e.g., age, race, physical or mental handicap, part of a sibling group. Such children are found to have special needs according to specific factors and conditions established by the states, e.g., white children ages 10 or older.
According to section 473(a)(3) of the Act, the amount of any adoption assistance payments shall be determined through agreement between the adoptive parents and the state "... which shall take into consideration the circumstances of the adoptive parents and the needs of the child being adopted...." This section goes on to limit the amount of the assistance payments (or subsidy) to the foster care maintenance rate that would have been paid to foster families caring for the children in question. Statutory language, therefore, directs states to stipulate in the written assistance agreement the amount of any subsidy that would be made given the circumstances of families and needs of the children. Regulations reiterate this directive and add a prohibition on the use of a means tests to qualify adoptive parents (and hence the children) for assistance under the program.
As noted above, eligibility for subsidy is predicated upon the state's determination that the children (not adoptive parents) qualify for adoption assistance by meeting the definition of special needs in section 473 of the Act. The only question that remains for state and adoptive parent consideration would be the amount of payment, if any. The PIQ (see attachment) attempts to provide states with guidance on an appropriate approach to resolving this matter. Problem
After ten years of program experience, the continuing confusion about the manner in which adoptive families are deemed eligible and the amount of such payments, testifies to the unsettled nature of policy in this matter. According to the program's legislative history as referred to in the PIQ, Congress specifically created an open-ended opportunity to receive financial assistance. The decision not to link adoptive family
income and resources to the receipt of assistance, served to place the focus directly on the children who would be adopted. The needs of the children would be determinative for the purpose of federal adoption subsidy.
Through the PIQ, federal officials intended to affirm the fact that states are not obliged to obtain proof from the families of their resource deficiency and consequent inability to fully provide for the special needs of their adopted children. Moreover, the act of negotiation under the program should not serve to inject an adversarial tone into a process meant to enhance the adoptability of children with special needs. Adoption assistance is not to be equated with public assistance and its income and resource eligibility standards for participation. Hence, the only connection to standards governing public assistance type programs would be severed after the children concerned satisfy the AFDC, Foster Care or SSI eligibility prerequisites.
Federal officials are concerned that too much attention to the process of negotiation for reaching an "agreement" works against the program intent and thus engenders inconsistency between states in the operation of this aspect of adoption assistance. For example, in some states financial aid in the amount of the foster care payment would automatically be included in the agreement. Adoption specialists in other states employ a variety of approaches to determine whether the household requires financial assistance and how much assistance is needed. In general, such practices are criticized for their resemblance to means tests. State officials concede that the easier route would be to grant the full amount possible but, they argue, it would not address the mandate to consider the circumstances of the adoptive family. Moreover, they contend that indiscriminant subsidizing would eventually exact a cost by reducing the resources to pay future adoptive families and to increase foster care rates.
From the states' perspective the necessity for assistance is likely to be disputed if the adopting parents appear to be financially comfortable, and/or the children do not have "serious" special needs that would not entail costly treatment or care. In response, federal officials would note that in the first instance, the resources of the prospective parents are not related to the eligibility of the children in order to receive subsidy. Having fulfilled the conditions to be considered children with special needs, they are immediately entitled to the assistance. Second, the entitlement is the result of state action. States are, therefore, advised to reconsider the factors and conditions relied upon for the special needs determination in order to reduce the eligible population of "borderline needs cases," e.g., raise the age at which adoption would be unlikely absent adoption assistance. Despite these policy considerations, the budgetary implications of assistance payments are of increasing concern to a number of state officials.
The issue for some states is the need to control long-term program costs and to take advantage of the savings that are expected following the adoption of children in state care. These aims would only be partly met by changing the special needs criteria. It has long been argued that investment in special needs adoption
activities brings about permanency for children who would otherwise languish in foster care; and, of substantial practical value, cost savings because the states would no longer be fully responsibility for their care. Therefore, if all special needs adoptions require the states to maintain their pre-adoption financial involvement there would be no savings. This is a serious concern for many states. Minimal savings make it less likely that decision-makers can be convinced to commit new money (including staff) to enhance adoptive parent recruitment and placement activities. In addition, this situation would adversely affect states' ability to initiate and support post-adoption services, because adoption program budgets would be pre-committed to assistance payments.
An argument can be made that the statutory framework of the Act suggests Congress was prepared to forego savings if that would promote special needs adoption. For example, the amount of any assistance paid depends on the state's agreement with the parents; and is limited to the applicable foster care maintenance payment. The discretion granted states to refrain from paying assistance or to pay at or below amounts that would be expended for foster care of these children requires the active involvement of the prospective parents. Consequently, at the inception of the program a significant reduction in state or federal expenditures for Title IV-E special needs children would not have been a foregone conclusion.The Negotiation
To the dismay of those states in search of criteria to guide the negotiations, the PIQ does not provide a definitive answer. The PIQ presents an interpretation of policy, not instruction. The best states may hope for is to draw guidance from the document about permissible approaches to use in the negotiation process.
The manner in which decisions are reached about the amount of assistance payments differs between states. That is to be expected given the flexibility under the Act to prepare agreements that reflect the unique circumstances of the children and prospective parents. However, the intrastate inconsistencies (from worker to worker) are particularly troubling for many administrators who would prefer a less subjective decision-making process. Under these circumstances the propriety of agreements reached cannot be readily evaluated and children and adoptive parents in like circumstances are found to have been treated in
dissimilar ways. Also as indicated earlier, as a budgeting issue administrators are unable to map out future program expenditures with any degree of certainty.
Federal officials would argue that it would be inappropriate and contrary to clear Congressional intent to attempt to regulate the discussions conducted for the purpose of determining the assistance families would need in order to parent special needs children. The process should not resemble bargaining between competing interests, nor should it be constrained by pre-determined checklists. A careful reading of the PIQ should, therefore, reveal important guidelines clarifying state responsibilities. Several points, however, deserve mention here.
In the response to question 3, the states are being advised on how to reach a conclusion about a particular case. The agreement, "shall take into consideration the circumstances of the adopting parents and the needs of the child..." (Sec. 473(a)(3)). Some administrators have asked whether equal weight is to be given these two factors. The PIQ indicates that these matters are to be "considered together" and the first clue is said to be the definition of special needs. If assistance is necessary to facilitate an adoption, the state should not feel compelled to perform a balancing test to determine parental need. The children are entitled to a subsidy in an amount that would purchase the necessary care. Moreover, the inconsistency complained of by some in the states is considered a natural by-product of addressing the needs of different individuals. Broad criteria explaining the concept of family circumstances such as that which appears below have been found acceptable. And, the appeal process is available for parents who wish to contest the decision.
· The financial impact of providing for an adoptee would result in a significant burden on the family's financial resources;
· Although the family's financial resources are substantial, unusual circumstances place demands on the family income to the extent that providing for an adoptee would result in an undue financial burden;
· The family does not have health insurance, or the coverage of the insurance is not sufficient to cover the expected medical needs of the adoptee; or
· Resources needed by the adoptee are not available in the family's community and the expense of gaining access to the necessary resources would place a significant financial burden on the family.
Questions 5 and 6 concern decisions by adoptive parents to defer their maximum income earning capacity. The PIQ response explains that such voluntary actions are not contrary to program intent, nor are they to be held against the parents and their children. The policy governing eligibility for assistance and the negotiation of the amount would not be altered because the circumstances of the parents were due to some intentional act.
In the section of the PIQ labelled "Discussion" following questions 5 and 6, the point is made that adoptive parents are "not expected to change their long term plans ..." Initially, this statement caused some consternation among adoption specialists. Taken out of context it would suggest the adoption of children should have no impact on what would have been the life style of the parents. However, when read as an elaboration of the two earlier responses, the meaning becomes clearer. A particular situation was at the heart of the problem addressed. The discussion is meant to integrate the policy expressed in the answers to the last two questions about adoptive parents who determined additional professional training would advance their "long term plans." In such situations, it would be inappropriate to penalize them by either denying assistance or arbitrarily refusing to increase the current level of aid. While changes in lifestyle are expected to the extent necessary to integrate the children into the families, an undue financial burden should not be created.
Another source of information on the negotiation process and federal expectations is in the form of a video, "Negotiating a Title IV-E Adoption Assistance Agreement." Produced by (and starring) staff of the Children's Bureau, the 30-minute tape depicts the fictional discussions held between state agency representatives and foster parents
who wish to adopt foster children. Preliminary to the development of an adoption assistance agreement, the adoption specialist discusses with the parents the ways in which adoption would change their relationship with the agency, and the kind of assistance that would be necessary to bring about the adoption. The topics covered include adoption subsidy, nonrecurring legal fees, pre-existing conditions that private insurance may not cover and the Interstate Compact on Adoption and Medical Assistance. At the start, the foster parents are asked to summarize their feelings about bringing the children into the home in terms of economics; and whether they would be able to adopt without assistance. The purpose of the assistance is addressed, i.e., to make it economically feasible to adopt the children. This point is underscored later in the video during the meeting to finalize the adoption agreement. The adoptive parents receive assurances that increased household income due to raises in salary, inheritance, a lottery win, etc., would not affect the subsidy, because the payments are meant to make it easier for children to be adopted.
The actual amount of financial assistance that would be needed is not directly addressed. Instead, the conversation touches upon the costs of maintaining the children, e.g., grocery bills for an adolescent male, and is linked to the need for adoption assistance. The parents are advised that the maximum they could receive would be the top rate for foster care (the amount they received as foster parents). Thus, as portrayed in the video, the negotiation does not involve attempts to identify or settle upon some amount that would be less than the foster care payment.
For information on how to obtain a copy of the tape, contact the Adoption Clearinghouse at (202) 842-1919.Unresolved Concerns
The primary beneficiaries of the adoption assistance program are children with special needs for whom adoption is the plan. This represents a shift in focus away from the former tradition of adoption as a service to benefit childless couples. Passage and implementation of the Title IV-E program institutionalized this change and allowed adoption to be viewed as part of child welfare services. However, the confusion surrounding the matter of adoption assistance payments masks a conflict between current adoption practice and the traditional approach.
In the past, ideal and worthy couples were required to prove their fitness to be parents and could be said to be rewarded with children. Part of the test of parental fitness
included the willingness (and capacity) to assume the financial cost of providing for the children to be adopted.
The adoption assistance program was intended to diminish the importance of financial standing to the adoption of children with special needs. Thus, moderate or low income households could adopt children without adversely affecting their ability to meet existing obligations. However, aspects of the traditional approach may emerge in the negotiation of an agreement for subsidy. During that process, the adoption specialist and, indeed, state policy, may communicate the expectation that the prospective parents should demonstrate their preparedness to make sacrifices in order to meet the needs of their children. Controlling program costs is not the principal concern. Instead, the aim is to reveal a commitment indicative of a desire to adopt the children despite the potential financial burden -- evidence of readiness and suitability to parent.
The following excerpt from a state manual is an example of the efforts that have been made to reconcile traditional notions with the intent of the adoption assistance program:
...It is understood that assuming the responsibility of new family members will affect the family's existing life style and cannot be totally offset by payment of adoptive subsidy. The adoptive family must be able to meet the financial needs of their existing family since the adoptive subsidy must be used for the benefit of the child being placed. In addition, families should be able, in most situations, to meet the day-to-day expenses of the child(ren) being placed.
The key word for any discussion of adoptive subsidy is negotiation. Negotiation begins when an adoptive family has been selected for a child defined as "special needs." The negotiation should begin with discussion of the child's special needs and the resources needed to meet these needs. The adoptive family should examine their own family's resources and, with assistance, decide on a reasonable amount.... Experience has shown us that when families are allowed to offer their own estimates of possible subsidy amounts, the requests are generally much lower than staff requests. In some cases, however, the worker may be better aware of the need for subsidy above the family estimates because of the needs of the individual child.
The state manual material quoted above includes acknowledgement of the additional burden that would be incurred due to adoption of children with special needs; and that adoption subsidy would not completely alter that fact. It also is clear that the state relies upon the negotiation process to help families identify some reasonable subsidy amount given the resources at the disposal of the household. At this point, current and former policy clash. The underlying message of the instructions to adoption specialist and prospective parents is: assistance is available but the preferred parents are those who are uncomfortable with it and those who would resist taking advantage of it unless absolutely necessary.
It is worth noting that in keeping with the PIQ, there is no way to predict the outcome or achieve uniformity in assistance payment decisions under these manual instructions. Indeed, consistency would not appear to be an aim. However, it is anticipated that the adoption specialist would exert some control over the process so that subsidies
According to adoption specialists it is not uncommon for adopting parents to refuse any type of assistance. The task of the specialists here would be to persuade them to accept assistance. They also would contend that the likelihood of adoption disruption
or dissolution increases if parents are anxious about the amount of subsidy payments. This concern about money is said to be a red flag signaling a tenuous emotional link to the children that may not withstand the problems and challenges that are unique to adoption. Moreover, assistance payments also have been found to have a negative impact on the attitude of the children. It causes them to feel the adoptive parents are no more committed to them than a foster care situation. In turn, the children may behave in ways that test parental attachment and signal their discomfort with the relationship. To avoid these pitfalls, adoptive families are encouraged to adjust lifestyles and budgets to accommodate these children in order to send the right message.
Federal officials would assert that such an approach is unnecessary. By the time prospective parents reach the negotiation stage, their resolve to adopt particular children should no longer be an issue. The amount of assistance that could be received would not be enough to induce individuals to adopt children and only rarely associated with adoption disruption or dissolution. Further, the adoption of children whom the state has determined are hard to place should not be further hampered by a negotiation process that could be counterproductive and frustrating for the prospective parents. States are cautioned that such an experience could suggest to parents that the state would not be particularly helpful or responsive in the future when adjustment may be needed in the subsidy to help defray unexpected costs. Additionally, it is feared this would have an adverse effect on the public image necessary to increase adoptive parent recruitment. State policy instead should highlight the willingness of prospective adoptive parents to devote the time and emotional effort required to be an effective parent not the ability to cut corners to meet the expenses of child rearing.Conclusion
Federal and state officials would agree that as a checkbook issue, few families (if any) would find the maximum assistance amount that most could receive a financial incentive to adopt. However, the success of adoption as an option for children who "can not or should not be returned" to the care of their biological parents is often dependent upon the access to assistance. The point of divergence is assistance in the form of money.
Adoption is fundamentally different from foster care. It is, therefore, hardly surprising that the policies of many states (and the attitude of the individuals charged with policy implementation) should be inclined toward a process reflecting the difference. It would appear, however, that federal policy, in relation to adoption subsidy, is not particularly concerned with demonstrating a distinction.
The PIQ avoids stating some simple, clear-cut way in which to negotiate adoption assistance payments. The art of negotiation is not an exact science. Aside from the subsidy amount, the assistance agrement is relatively straightforward. For example, the state stipulates that named children are eligible for Medicaid. It may go on to specify some medical service, such as physical therapy, that may not be covered under the state Medicaid plan. The need for medical services frequently is apparent and predictable. Making a determination about the need for financial assistance is not subject to the same kind of precision and is a risk the states must accept under the terms of the federal policy.
Child welfare experts predict that greater numbers of children, who are even more troubled and handicapped than current foster care children, will enter the system for the foreseeable future. For many of these children adoption will be the permanency goal. To promote their permanent placement in adoptive homes it will be essential to improve access to and the quality of services. Thus, adoption should not be expected to have any appreciable impact on program costs devoted to these children. At best special needs adoption programs may have a neutral cost outcome instead of a savings effect in the long run. States should be prepared to reap savings indirectly, in the form of reduced administrative costs, i.e., less staff time devoted to management of cases, including planning and reviews.
ISSUE BRIEF XV
© November 1990