Definition of Subsidized Guardianship

Subsidized guardianship is the transfer of legal responsibility for a minor child from the state to a private caregiver or guardian, who is provided with a monthly subsidy for the care and support of the child. The transfer of legal responsibility removes the child from the child welfare system, allows a caregiver to make important decisions on the child's behalf, and creates a long-term caregiver for the child. Recently, several states have begun using subsidized guardianship as a tool to expedite permanency for children who are in the child welfare system, and for whom reunification with the birth parents or adoption are not options. At least thirty-four states and the District of Columbia have established some kind of subsidized guardianship program: Alaska, Arizona, California, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Dakota, Utah, West Virginia, Wyoming, and Washington D.C. (Children's Defense Fund & Cornerstone Consulting Group, 2003).

The Need for Subsidized Guardianship

The need for this permanency tool developed out of the convergence of increasing numbers of children in foster care, and a nationwide effort to move children expeditiously out of state care into permanent homes. The past thirty years has seen substantial growth in the number of children entering the foster care system. Estimates from the Adoption and Foster Care Analysis and Reporting System (AFCARS) indicate there were 545,097 children in foster care in the U.S. as of March 31, 2000 (July, 2003). This represents approximately a 40% increase since the mid-1980s. Likewise, foster care expenditures grew from $800 million in 1988 to $3.7 billion in 1996, an increase of 462% (U.S. Department of Health and Human Services [DHHS], 1997). In addition, family and community problems, and a lack of resources to address these issues effectively, led to children remaining in foster care for considerable lengths of time. Many children experienced multiple placements and developed few social supports or emotional connections (Charles & Nelson, 2000; North American Council of Adoptable Children [NACAC], 1997).

Growing concern that children were not exiting the system, and did not have the secure relationships with nurturing caretakers necessary for their healthy development, led to the recognition of the need to reform child welfare policy, and, in turn, to the passage of the Adoption and Safe Families Act (ASFA) of 1997, Public Law 105-89. ASFA significantly changed the goals for the delivery of child welfare services by taking steps to expedite permanency for children, and emphasizing the importance that children who enter the child welfare system be placed in permanent homes in a timely manner (University of Pittsburgh, 1998). Foster care is viewed as a temporary support, not a long-term solution for children whose families are experiencing stress and difficulty in parenting. In addition, efforts at family reunification are redefined as time-limited, highlighting the commitment to minimize the length of time children wait for a permanent home (Bess, Leos-Urbel, & Geen, 2001).

Under ASFA (1997), permanent placements can include family reunification, adoption, or other planned permanent living arrangements. Adoption is generally viewed as the preferred plan for children who cannot be reunified with their parents. However, this option may not be available to many children. For example, some adolescents are unlikely to be reunified or adopted, particularly if they have spent years in placement and have experienced multiple moves (NACAC, 1997). Furthermore, teens may have a strong desire to maintain a relationship to their family of origin, even if they have been placed outside the home for several years. Accordingly, adolescents sometimes resist adoption since it represents a permanent break from their parents (Mason & Gleeson, 1999; Schwartz, 1993).

In addition, while many kin caregivers may be open to adoption, some kin caregivers are uncomfortable with terminating parental rights since it can be seen as conflicting with family relationships (Riggs, 1996). In focus groups, relatives expressed that moving to termination disrupts family arrangements in ways that destabilize the family as a whole and, in turn, hurt the children (Cornerstone Consulting Group, 1999). Consequently, some relative caregivers may not be willing to adopt, although they are committed to caring for the children (Needell & Gilbert, 1997; NACAC, 1997). This may be particularly true for Native American and African American families. For example, many Native Americans consider adoption inconsistent with their cultural beliefs if it dissolves the parent-child relationship (McDaniel & Sosso, 1996; Schwartz, 1993). In addition, African American families have a history of informal caregiving through extended family networks for both the short and long term (Schwartz, 1993; Fluke, Harper, & Wahlgren, 1997). This issue is particularly salient as the child welfare system increasingly relies on kin or relative caregivers to provide homes for these children. According to the 2000 U.S. Census, nationally there are 4.5 million children under the age of 18 living in grandparent-maintained households, and another 1.5 million children under 18 living in other relative-maintained households (Generations United, 2003).

The majority of these kin caregivers are female relatives from economically marginal households. In order to provide care for the children, kin often require outside financial support (Gwadz as cited in Geballe, 2000). However, Temporary Assistance to Needy Families (TANF), the primary source of income support available to caregivers outside of the foster care system, can be problematic. TANF payments are substantially lower than foster care rates, and, in most states, cash assistance payments are at less than half of the federal poverty level (Geballe, 2000). In addition, TANF grants are time limited and some states impose a family cap on benefits, which are important considerations for kin deciding to care for their relatives' children (Geballe & McGrady, 1996).

Subsidized guardianship provides an alternative to long-term foster care or TANF. By providing financial support to children and their new caregivers, subsidized guardianship can enable relatives to become permanent guardians for children who would otherwise remain in public care (Schwartz, 1993).

Current Structure of Subsidized Guardianship

Although subsidized guardianship programs vary throughout the country, there are some key similarities. In general, subsidized guardianships serve "hard-to-place" children, particularly older children, sibling groups, or those with special emotional needs; and are primarily used when reunification with the birth parents and adoption have been considered and ruled out. Most states require that the children be in the child welfare system for a period of time, ranging from six months to two years, prior to establishing a subsidized guardianship. In addition, twenty-one states require the children to be in the care of their prospective guardian to be eligible for subsidy, and many states seek parental consent as a way to ensure the permanence of the guardianship (Children's Defense Fund & Cornerstone Consulting Group, 2003). In addition, an application for a subsidy must be made prior to the guardianship hearing. Typically, the subsidy is reviewed annually, and provided until the children reach 18 or the guardianship ends. However a few states continue the subsidy until age 22, if the children are enrolled in a full-time secondary education program (McDaniel & Sosso, 1996). The purpose of the review is to determine if the child is still living with the guardian, whether the child or guardian's financial situation has changed, and if the family is receiving the necessary services (Children's Defense Fund & Cornerstone Consulting Group, 2003).

A few states (Florida, Louisiana, and Missouri) have expanded their subsidized guardianship programs to provide financial support to relative caregivers of children who have not been in state custody (Beltran, 2001). Florida's program started in 1998, and served almost 12,000 children by April 2001. Missouri's "Grandparents as Foster Parents" program has served more than 2500 children since 1997, and Louisiana's "Kinship Care Subsidy Program" has served over 2400 since beginning in March 2000. Each of these programs works with relatives who have become court-ordered custodians or guardians, and the subsidies provided are generally greater than the TANF child-only grant but lower than the foster care rate. All three states use TANF block grant funds to finance these programs. These three states differ in their income requirements for potential subsidized guardians. In Florida, only the child's income and assets are tested and the monthly payments received by the guardian are based on the child's age. In Missouri, payments also depend on the income of the child and the maximum payment allowed is the same as the foster care rate. In Louisiana, the relative's income must be less than 150% of the federal poverty line and the child's income must not exceed $222 per month. This amount is approximately 50% of Louisiana's foster care rate (Beltran, 2001).

There are also significant differences between state programs. For example, some states (e.g., Minnesota and New Jersey) allow non-relatives to assume guardianships, while others (e.g., Connecticut) limit subsidized guardianships only to relative or kin caregivers. Furthermore, some states (e.g., West Virginia) require caregivers to be certified foster parent. Most states require legal guardianship or custody to be established before subsidized guardianship can occur (Alaska and Kentucky do not). Thirteen states list an emotional attachment to the caregiver as a stipulation for subsidized guardianship and many states allow older children to have a voice in deciding their placement (Children's Defense Fund & Cornerstone Consulting Group, 2003; Beltran, 2001). Another important difference is the court in which the guardianship is ordered. In some states, the probate court has jurisdiction, while in others the juvenile court is responsible for appointing the guardians (Schwartz, 1993). Furthermore, the subsidy is not automatically granted in all states, but is based on a determination of need and the individual circumstances of the children and guardians (Geballe, 2000; McDaniel & Sosso, 1996). Finally, the amount of the subsidy varies with some programs providing approximately the equivalent of the foster care rate and others providing a lower rate, but more than a TANF child-only grant.

Subsidized guardianships are funded through a variety of sources including state funds, TANF dollars, and in states receiving a demonstration waiver, Title IV-E dollars (Geballe, 2000). In fact, several states have funded subsidized guardianship programs through Title IV-E demonstration projects waivers. Under the Child Welfare Demonstration Program, which is authorized by ASFA, the DHHS can approve up to 10 new demonstration projects per year (DHHS, 1997). These demonstration projects, which last up to five years, provide states "...with an opportunity to develop creative approaches to dismantle the many barriers that may exist between children waiting in foster care and permanency" (Children's Bureau, March 2001). States must apply individually through the Children's Bureau for approval of a demonstration waiver, and must maintain the safety of children and cost neutrality -- meaning the total amount of federal funds used to support the demonstration project cannot exceed the amount that would have otherwise been spent if the project had not existed (DHHS, 1997). As of 2003, Title IV-E Child Welfare Waiver Demonstration projects offering subsidized guardianship were being conducted in seven states (Delaware, Illinois, Maryland, Montana, New Mexico, North Carolina, and Oregon). TANF funds are also available to subsidize guardianships. At least ten states have used TANF funds for this purpose: California, Florida, Georgia, Indiana, Kentucky, Louisiana, Missouri, Nevada, New Jersey, and Oklahoma (Beltran, 2001; Children's Defense Fund & Cornerstone Consulting Group, 2003).

Benefits and Limitations of Subsidized Guardianship

The principal advantage of subsidized guardianship is providing "...continuity and stability for children by supporting them in the custody of loved and trusted adults, rather than in the custody of the state" (Geballe & McGrady, 1996, p.4). This is particularly salient for children who have experienced the trauma and grief of being separated from their parents (Geballe & McGrady, 1996).

Furthermore, since guardianship does not require the termination of parental rights, it may be a better option for some children. Parents retain some rights and responsibilities including visitation and financial support for the child, allowing the parent-child relationship to be maintained (Riggs, 1996). Thus, subsidized guardianship reflects the principles of child-centered and family-focused practice while ensuring that children remain safe, receive nurturance, maintain access to other family members, and retain their cultural identity (Fluke et al., 1997; McDaniel & Sosso, 1996). Moreover, subsidized guardianship gives legal recognition to family patterns common within African American, Latino, and Native American cultures, populations over-represented in foster care system nationwide (Schwartz, 1993).

This strategy can also reduce the number of children in foster care. Since most subsidized guardianship projects are relatively new, there is limited information available on their progress. However, initial findings in Illinois indicate that their subsidized guardianship program, which began in 1997, is having a positive impact on increasing the number of permanent placements, and decreasing the number of children in foster care. For example, in 1997 and 1998, 1,486 children were moved from foster care to subsidized guardianship status. Several complementary reforms - such as judicial reform, family group conferencing, and enhanced in-house data capacity - have helped ensure a smoother implementation of the Illinois program (Cornerstone Consulting Group, 1999).

A reduction in administrative costs can also save states money and resources (CWLA, 1998; Riggs, 1996). Since the children are no longer in the custody of the state, the child welfare system no longer has responsibility for providing case management, which allows child welfare staff resources to be reallocated or caseloads reduced. Additionally, there is no need for the court to monitor these cases, potentially resulting in judicial savings. Court backlogs, and the resulting delay in processing cases, could also be eased (Schwartz, 1993). These savings from reduced administrative costs can help offset the fiscal burden of providing the subsidy.

States with subsidized guardianship programs have reported substantial savings in moving children from foster care to guardianship placements (NACAC, 1997). For example, in Massachusetts, subsidized guardianship has been in practice since 1993 and has served over 2,000 children, as of December 1999 (Beltran, 2001). While there is little empirical data that presents a fiscal analysis of the program, Massachusetts reports saving as much as $10,000 per year on each case moved from foster care to guardianship (McDaniel & Sosso, 1996). Similarly, Illinois reported estimated savings of $6,000 per year per case. Savings were primarily a result of a reduction in administrative costs associated with on-going case management, including the elimination of judicial reviews (Cornerstone Consulting Group, 1999).

Despite the state reports, some concern has been raised that the long-term cost of subsidizing guardianships will increase exponentially as utilization increases and guardianships last until children reach the age of majority (Schwartz, 1993). Fluke et al. (1997) developed a computer simulation to evaluate subsidized guardianship in Colorado. The model defined specific assumptions about the cost, duration, and corresponding workload requirements of each placement option, as well as eligibility criteria and a utilization rate for subsidized guardianship. The calculations predicted a decrease in foster care placements if subsidized guardianship was implemented, but cost savings and workload reductions were not realized (Fluke et al., 1997). The duration of kinship placements seemed to be the primary determining factor influencing cost and outcomes. As Fluke et al. (1997) note, it would be possible to develop a more cost-effective policy by examining other assumptions and scenarios. However, placing constraints on the use of subsidized guardianship may deny the benefits of guardianship to some children.

Concern has also been voiced that the lack of involvement with the child welfare system leaves guardians without key resources needed to meet their children's needs (Mason & Gleeson, 1999). This is related to the difficulty that caregivers often experience accessing support services for children with special needs. For example, in some states subsidized guardianship results in a loss of automatic eligibility for Medicaid (Riggs, 1996). Other services such as housing or childcare may also be jeopardized. Furthermore, in most states, once the guardianship has been established, there are no post-placement support services. Although, the lack of involvement with a child protection agency is often presented as one of the benefits of subsidized guardianship, some children may need scarce support services even while in the care of their guardian.

Another issue related to subsidized guardianship that has limited its use, is disagreement about the "real" permanency of guardianship. Arguments have been made that guardianship is not permanent since birth parents can seek to dissolve the guardianships (Riggs, 1996; Schwartz, 1993). While true, all states attempt to gain parental consent for the guardianships in advance to address this issue. Furthermore, adoptive parents, guardians and biological parents alike are vulnerable to custody suits by third parties.

The existing data on the disruption of subsidized guardianships are somewhat conflicting. Schwartz's (1993) review of subsidized guardianship programs report that at least two states (Hawaii and Nebraska) have either levels of reentry into the child welfare system or guardianship dissolution that could be considered significant. On the other hand, Wheat and Herskowitz found that subsidized guardianship increases a caregiver's level of commitment to the children (as cited in Schwartz, 1993), and Mason and Gleeson (1999) found that relative placements are less likely to disrupt and tend to last longer. In addition, financial subsidy has been shown to decrease the likelihood that a placement with a relative caregiver will be dissolved (Testa and Slack, 2002). When looked at in relationship to adoption, subsidized guardianship may not seem as permanent a solution. However, since adoption and reunification must be ruled out, subsidized guardianship presents a viable alternative that creates a legal, long-term relationship between the children and caregiver. Studies comparing the rate of disruption of subsidized guardianships with that of adoptions would allow further understanding of the basis of this concern.

As previously mentioned, the current structure of subsidized guardianship generally requires children to be involved with the child welfare system for a specified period before establishing the guardianship subsidy. This can disrupt continuity for the children in an already emotional time. In addition, relative caregivers and biological parents may be reluctant to become involved in the child welfare system, which requires that they give up custody (and control) of the children, and make themselves vulnerable to the possibility that the children may not be returned to their custody. This is particularly salient for groups, like the African American community, which have historically been over-represented in the child welfare system. To prevent the dissolution of families and avoid children's entry into foster care, Schwartz (1993) suggests it may be appropriate to consider expanding use of subsidized guardianship as an extension of families' natural coping mechanism by investing friends or family members with legal authority and providing them with appropriate financial support without requiring prior placement in foster care.

Other limitations include systemic barriers to the utilization of subsidized guardianship. For example, Mason & Gleeson (1999) report that some caseworkers hold a bias against providing financial support to caregivers of related children or lack the skills to engage caregivers in discussions about different permanency options. Consequently, some child protection agencies and caseworkers do not discuss guardianship with families. Mason and Gleeson (1999) also noted several incidences in which the court system served as a barrier to approving subsidized guardianships. To address these issues, it is necessary to develop ways to assess children and caregivers who could benefit from subsidized guardianship, provide workers with adequate casework skills, and make comprehensive community-based resources accessible to caregivers.

Finally, in evaluating the current structure of subsidized guardianship, it is essential to consider if current practice complies with permanency goals outlined in ASFA. For instance, policies that require children to be in state custody for substantial lengths of time before providing a guardianship subsidy may conflict with the permanency timeframes established by ASFA.

Conclusion

Subsidized guardianship is an important permanency tool, especially for children for whom adoption or reunification with their birth parents are not options. Supporting caregivers through the provision of a subsidy affords children the opportunity to develop lasting relationships with an adult who is legally responsible for them. In addition, discharging the children from the child welfare system allows for less administrative and judicial oversight, and, potentially, fiscal savings. Subsidized guardianship also legitimizes cultural norms in African American, Latino, and Native American families, who make up a significant portion of the child welfare population.

In order for states to be able to maximize use of subsidized guardianship, continued and expanded funding to support such programs is necessary. Furthermore, it may be useful to expand use of subsidized guardianship, as has been done in Florida, Missouri, and Louisiana, to serve those children who have not entered the child welfare system, but who are potentially at risk for entering the system.

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