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  • May 23, 2022

    Tip of the Month: Economics and Children in Protective Care

    The economics involved in the payment of care in child protective services cases can be complex. Andrew Morgan discusses the sources of funding and offers a broader perspective as to how economics may affect these types of cases.

    Andrew H. Morgan

    For attorneys involved in child protective services (CHIPS) cases, it is helpful to understand the various forms of economics involved in the payment of care for the children.

    My perspective is from the circuit court level, primarily as guardian ad litem in Sheboygan County cases.

    The first part of this article sets forth the types of funds that are available in CHIPS, minor guardianship, or post-TPR adoption cases. The second part of this article briefly takes a broader perspective as to how economics may affect cases.

    Types of Available Funds

    Andrew Morgan Andrew Morgan, Oregon 1991, is an attorney with Charlton & Morgan in Sheboygan.

    The first type of funding is termed kinship care. Once a child is taken into protective placement, if the placement is with a relative of the child, the provider can request the funding and the court can order same. The funds are paid by the county, but the county can seek reimbursement from the State of Wisconsin.

    A second type of funding is related to licensed foster-home care providers who are not relatives of the child. The Federal Foster Care Program, an open-ended entitlement grant

    program, reimburses states and local governments for the administrative and maintenance costs for every eligible child placed in foster care.1

    The amount of support payment varies. It depends upon the child’s age and needs of the child.

    A local county, such as Sheboygan County in Wisconsin, issues payments and then seeks reimbursement from the federal funds (title IV-E funds), as well as from child support payments from the parents of the child or Social Security payments (if a child is a payee for a deceased or disabled parent).

    Pursuant to Wis. Stat. chapter 48, a CHIPS case needs to end with a “permanency” placement for the child, either by reunification with a parent or both parents, a guardianship, or an adoption after a termination of parental rights proceeding.

    A CHIPS case that ends with a guardianship placement can involve a subsidized guardianship for payments to the new guardian.2This situation might arise when a relative provider does not want to adopt the child and the Department of Social Services does not want to seek termination of parental rights, usually because the child is better off in a guardianship with the relative provider versus an adoption in a nonrelative home. The guardianship allows the parents to maintain their legal rights and reasonable visitations with the child.

    Historically, counties in Wisconsin paid for this subsidy, but recent changes in the law are allowing the State to reimburse counties. As with kinship care payments, counties can also seek reimbursement from child support or Social Security payee funds.

    A third type of funding is for post-TPR adoptions. Counties do not pay for adoption home placements, as the State of Wisconsin becomes guardian of the child (until the adoption is finalized) at the time of the termination of rights case conclusion. Depending on the needs of the child, adoption funds are paid by the State before and after the adoption is finalized. The funds are reimbursable to the State from the federal government.

    How Economics May Affect Child Protective Services Cases

    In 1997, President Bill Clinton signed the Adoption and Safe Families Act (ASFA). The law directed the federal government to take steps to double the number of foster children adopted annually by 2002. ASFA has offered financial incentives to states to get more children adopted. The federal government pays a bonus for every foster child adopted during the fiscal year that exceeds a baseline of prior average annual adoptions.

    There is concern that the federal government has appropriated diminished funds for family preservation and reunification while spending increasing amounts on foster care and adoption assistance.3

    A complex web of congressional funding streams, dispersed through multiple programs, administered by various federal agencies is organized in connection to the foster care system.4 The child welfare financing structure rests on two main federal statutes: Title IV-B and title IV-E of the Social Security Act. Title IV-B makes up only 4% of the child welfare spending, and provides grants to states for family preservation and reunification services. The bulk of child welfare spending – about half – comes from title IV-E, which funds five federal programs supporting foster care, guardianship, and adoption.

    Congress in 2018 passed the Family First Prevention Services Act, which give states more flexibility in using some title IV-E money for alternative services assisting children. Congress passed the 2018 law, however, without repealing ASFA and its speedier timelines for termination of parental rights and bonuses for adoptions.

    There are other issues that may be considered.

    As noted above, a county will seek reimbursement from the parent whose child is placed out of home, but an onerous child support amount can affect the ability of the parent to secure stable housing.5

    And regarding a child’s Social Security payee benefit, is it not detrimental for the county to take that child’s benefit to the point that the child has no funds when the child becomes an adult? In 2018 the State of Maryland became the first state to enact legislation to preserve some of the child’s SSI benefits.,6

    This article was originally published on the State Bar of Wisconsin’s Public Interest Law Section Blog. Visit the State Bar sections or the Public Interest Law Section webpages to learn more about the benefits of section membership.


    1 See Dorothy Roberts, Torn Apart: How the Child Welfare System Destroys Black Families, Basic Books, 2022, pp. 143-4.

    2 See Wis. Stat 48.977(3r).

    3 Roberts, p. 122.

    4 Roberts, p. 143.

    5 Roberts, pp. 155-158.

    6 Maryland must preserve at least 40% of the funds for the child starting at age 14, 80% of the funds at age 16, and 100% of the funds at age 18. Roberts, p. 158.

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