Finance Reform: Looking Beyond Title IV-E

Talk to child welfare advocates about federal child welfare finance reform and the conversation almost immediately turns to Title IV-E of the Social Security Act.

This is for good reason: Title IV-E, including the foster care, guardianship and adoption assistance programs, represents the only federal entitlement program targeted specifically to the needs of children who have experienced abuse and neglect. Being an entitlement guarantees that, regardless of the political and fiscal priorities of Congress in any given year, funding is available to ensure that all eligible children receive the protections and services conveyed through the IV-E programs.

Title IV-E, however, is hamstrung by an outdated funding formula that links a child’s eligibility for foster care supports to their parents’ eligibility under the antiquated post-permanency services. But while the federal government devotes almost $8 billion per year through Title IV-E to support children in out-of-home care and those who have been adopted out of foster care, the Title IV-B programs receive only about $700 million per year in total.

Other federal programs that make up the child welfare funding landscape include Medicaid, Temporary Assistance for Needy Families (TANF), and the Social Services Block Grant (SSBG). These diverse programs play a critical role in funding services within the child welfare continuum. Medicaid, another federal entitlement, is the primary funder of health and mental health services for children and youth in foster care, as well as for those who age out of the system.

TANF can be used by states to fund a number of child welfare initiatives, including support for children in out-of-home care who are ineligible for Title IV-E due to the Aid to Families with Dependent Children (AFDC) program restrictions, children living with relatives, and services to preserve and AFDC program, which was phased out in 1996. The resulting income-based eligibility threshold has not been adjusted in the past two decades, and consequently each year fewer and fewer children in need of the protections of out-of-home care are eligible for federal assistance through IV-E.

Meanwhile, many of the other major federal programs funding our nation’s child welfare systems lack IV-E’s entitlement status.

Title IV-B of the Social Security Act provides for the Child Welfare Services and Promoting Safe and Stable Families programs, key funders of prevention and early intervention and post-permanency services. But while the federal government devotes almost $8 billion per year through Title IV-E to support children in out-of-home care and those who have been adopted out of foster care, the Title IV-B programs receive only about $700 million per year in total.

Through SSBG states have broad discretion to use funds across the full continuum, from child protection to support for children in out-of-home care to post-permanency services. Furthermore, up to 10 percent of a state’s TANF funds can be transferred directly to SSBG to support a wider range of child welfare services.

Several other federal programs can also play a role, including the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Program, the various components of the Child Abuse Prevention and Treatment Act (CAPTA), and several childcare, early education and health programs.

As is clear, the full matrix of federal programs available to support children and families involved with, or at risk of involvement with, the child welfare system is complex and sprawling. Dozens of federal agencies are involved in administering and overseeing the various programs, while a significant proportion of direct services are provided by contracted nonprofit organizations, making coordination and cross-system collaboration an ongoing challenge.

Advocates and policymakers must be mindful of this broad range of programs when debating ways to reform the federal financing of child welfare.

As we conceptualize child welfare finance reform, it is equally important that we consider that, despite some progress in securing new resources for children and families — including the expansion of Medicaid and extension of foster care eligibility to age 21 — the past two decades have seen steady federal disinvestment from other key child welfare programs.

The AFDC eligibility link continues to undermine the ability of IV-E to support children who have suffered from significant maltreatment. TANF and SSBG were transformed from entitlement programs into block grants and have seen their funding dwindle ever since, now serving just a fraction of the children and families they historically supported. Medicaid’s future remains uncertain. And many other programs were subjected to across-the-board cuts in recent years via Congress’ sequestration process.

Throughout the country, child welfare indicators and outcomes are persistently troubling, and there are a number of self-evident problems with current policy.

Given these ongoing issues with the current federal infrastructure financing child welfare, Congress should prioritize reforms that would proactively address these problems. In so doing, policymakers should think broadly and holistically, conceiving of funding structures in and out of IV-E that prevent child abuse, while improving the lives of those children who have suffered it.



Sean Hughes
is the government affairs director at the consultancy Social Change Partners. Previously, as a Congressional staffer, he helped to write and pass the Fostering Connections to Success and Increasing Adoptions Act of 2008. He has also served as congressional affairs director for the Child Welfare League of America.

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