States are Leaving Federal Money for Extended Foster Care on the Table

Photo: Staffing Stream

Nearly every state in the union now has some offer of extended foster care for youths who turn 18 in foster care and do not feel ready to “age out” into adulthood. And 26 of those states have connected their program to the federal regulations under Title IV-E of the Social Security Act, meaning they can split the cost of it with the feds.

But a recent Government Accountability Office (GAO) report on extended care found that very little federal funding is flowing for foster care services to youth older than 18, which was made available by the Fostering Connections to Success and Increasing Adoptions Act in 2008. The lack of federal funding is in no small part due to eligibility restrictions on IV-E funds, which are pegged to the income level of parents using an archaic standard from the Aid to Families with Dependent Children (AFDC) program.

But the experience of two states, Tennessee and Illinois, suggests that there is a legal and relatively simple way for states to increase federal dollars and increase the size of their extended care programs.

The GAO report, done at the requests of U.S. Reps. Danny Davis (D-Ill.) and Jackie Walorski (R-Ind.), focuses in large part on youth in extended care who are living in what’s known as supervised independent living (SIL) arrangements, and what sort of support they get from child welfare agencies.

“Little is known about the living arrangements offered to youth ages 18 to 21 in states where extended care is offered … especially how states have set up supervised independent living arrangements, and the types of services that assist these youth,” said the report. SIL placements usually come with some form of subsidy payment or stipend for the youth to help pay for living expenses – it ranged from $421.80 to $1,715 in the states studied by GAO – but the report finds variation in the level of guaranteed assistance to youth on things like life skills, savings and academic or career counseling.

For most states with federally-approved extended foster care, less than half of the older youth are eligible for federal reimbursement. Source: Government Accountability Office

The report also provides the first macro-level data on extended care in general. SILs make up about a third of all placements, with 38 percent continuing to live with kin or in their foster home. [Somewhat alarming: 17 percent live in group homes or institutions, not the ideal way to prep a young person for independence].

But the most surprising takeaway, in Youth Service Insider’s humble opinion, is that IV-E approved plans are not bringing in a lot of federal dollars, which might be stifling the number of youth in extended care. From a section of the report on the IV-E eligibility of older youth:

In 14 of the 17 extended-care states for which we calculated eligibility rates, we found that the majority of youth ages 18 to 21 in care were not eligible for Title IV-E reimbursement in state fiscal year 2017, meaning that the state was responsible for most or all of the cost of their care. We found that six of the states had Title IV-E eligibility rates of 30 percent or lower.

Also from that section: “State officials we spoke with in three of the five selected states said that ineligibility frequently stems from family income exceeding the income limit for Title IV-E funding.”

The IV-E income test has been widely panned in its entirety for years. The adoption portion of IV-E is steadily being de-linked from the income test, and the new IV-E services under the Family First Prevention Services Act have no income test attached. But it still exists for foster care, and its presence has contributed to a shrinking percentage of foster youth who are covered by federal funds.

The test is particularly absurd for older youth, who are being offered extended care because a system failed to find them permanency after taking them from their families. These are legal adults, many of whom have spent years or most of their lives in foster care – what possible relevance could their parent’s income have on their situation?

At first, the plan after the Fostering Connections Act passed was to allow states to essentially redetermine eligibility using the income of the youth who was opting for extended care. Since almost none of them would surpass the income threshold at age 18, that would make almost all of the youth seeking extended care eligible.

But that plan was scrapped before the law got off the ground because, according to federal guidance from the Department of Health and Human Services, “youth age 19 or older cannot meet the AFDC eligibility requirements because they would not be able to meet the definition of a ‘needy child’ in the former section.”

But the research in the GAO report reveals another way to maximize federal funding for the whole range of placements for youth in extended foster care. Both Tennessee and Illinois reported to GAO that they officially close the cases of teens when they age out. Then they bring them immediately back into care — or after a break in time if the state offers re-entry — typically through a voluntary placement agreement.

This replaces the redetermination process with a “new determination” process. Illinois reported to GAO that this policy helped increase the number of youth in extended care by 30 percent.

“Federal regulation and the child welfare policy manual make it clear that a new court order or voluntary placement agreement create a new foster care episode,” said Jenny Pokempner, a senior attorney at the Philadelphia-based Juvenile Law Center. “A new IV-E eligibility determination can be made at that time. Only the young person’s income is considered.”

Pokempner said that one of the biggest lessons from the report is that states may be able to more effectively leverage IV-E funds for their extended foster care programs if they follow the lead of Tennessee and Illinois.

“Many states that offer extended foster care likely could offer voluntary placement agreements at age 18 for extended care and re-entry without changing their laws,” she said. “When states maximize their IV-E funding they are in a better position to leverage all funding available to build an excellent older youth service continuum.”

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John Kelly
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John Kelly is editor-in-chief of The Chronicle of Social Change.