New Federal Foster Care Funding Changes

As part of recent efforts to resolve federal budget issues, Congress unexpectedly passed and President Trump signed into law significant changes to allowable uses of Title IV-E funding, the primary source of federal funding for foster care programs. The new provisions expand the use of these funds for certain types of services intended to keep children out of foster care and keep families together. At the same time, other provisions limit the use of these funds for congregate care and impose stiffer standards on residential treatment facilities. The implications of these federal changes will be determined as DFPS and state leaders amend the state plan and make funding decisions, but they could have a significant impact in changing the Texas foster care system.

On Feb. 8, 2018, Congress incorporated several provisions from 2016’s H.R. 5456, commonly known as the Family First Act, into the House Continuing Resolution (CR) that was signed into law by the President after a brief government shutdown. Significant changes to the structure of federal foster care funding were included. These provisions promise an increased commitment to keep families together (by freeing up federal funding for state-approved family preservation services including mental health and substance abuse treatment), and to help keep children out of the foster care placements (by imposing higher standards for congregate care settings eligible for federal money). Below is a brief summary:

  • Starting in October of 2019, Title IV-E funding will no longer go to congregate care settings (including group and cottage homes), but allows exceptions for qualified residential treatment facilities (QRTF) that must provide trauma-informed treatment models with 24/7 clinical staff, and obtain national accreditation.
    • States may apply for a two-year delay on this new limit, but as a consequence will be precluded from using Title IV-E funding for the family preservation services that now qualify. Texas CASA will keep a close eye on this decision, as Texas begins to weigh the consequences of losing federal funding to non-QRTF facilities against the benefits of front-end prevention efforts.
    • If the state decides to forgo the two year delay, it is likely non-QRTF facilities will seek increased state financial assistance instead of federal Title IV-E funds.
    • These changes could have significant implications for federal funding of cottage home providers.
  • Title IV-E funds, previously made available only to foster care/adoption assistance spending, will also be allowed for keeping at-risk families together by funding mental health, substance abuse, family counseling, and parent skills training for up to 12 months.
    • This change in funding for prevention services is a welcome response to the increase in removals resulting from the opioid crisis.
    • The new provisions also allow some federal support for kinship placements while treatment occurs, which had been restricted for this type of placement (more information).
    • State programs eligible for this funding will have to be approved and incorporated into a state plan, to be submitted to the federal government by October 2019.

For a more detailed explanation of these changes see this series of articles from the Chronicle of Social Change: 1) on new prevention funding options 2) on new funding limitations for congregate care  and 3) other provisions affecting adoption and other funding.