Adoption Subsidy (Glossary)

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Adoption Subsidy: A short-term or long-term financial payment, either in the form of cash or services, that is designed to help assist an adoptive family in providing for the on-going care of an adopted child with special needs, by offsetting some of the additional expenses that they are required to assume as part of the adoption. A subsidy can include medical insurance for the child, counseling services for the entire family, respite care for the adoptive parents, so they can spend some time away from the responsibilities of the child to recharge physically and emotionally, and even a monthly cash stipend to help cover other extraordinary expenses and services associated with the adoption. The amount of the stipend and the types of services included will very substantially, depending on the needs of each individual child.

Adoption subsidy payments can come from State funds, or Federal funds, which are usually administered and distributed by a state or county agency, or from a combination of State and Federal funds. In order for an adoptive family to be eligible for the Federal IV-E subsidy program, children must meet each of the following characteristics:

1. A court has ordered that the child cannot or should not be returned to its birth family.

2. the child has special needs, as determined by the state's definition of special needs.

3. A "reasonable effort" has been made to place the child for adoption without the payment of a subsidy.

4. The child must have been eligible for Federal Supplemental Security Income (SSI) benefits at the time of the adoption, or the child's birth family must have been receiving - or was eligible to receive - Aid for Families with Dependent Children (AFDC).

The benefits that will be available through state and federal subsidy programs will vary from state to state, but will most commonly include all or some of the following elements:

1. Monthly cash payments: This can be a monthly amount that is at least $1 less than the amount of the foster care payment that the state would have been required to make if the child were not adopted, and were to remain in basic family foster care.

2. Medical assistance: This can include the providing of medical insurance, or other medical benefits, through the federal program, and some state programs, including Medicaid benefits.

3. Social services - post-adoption services such as respite care, counseling, day care, and etc.

4. Non-recurring adoption expenses: This can include a one-time cash reimbursement, depending on the laws of a particular state, of somewhere between $400.00 and $2,000.00, to help cover one-time costs that are incurred by the adoptive parents as part of the adoption, such as adoption fees, court costs, attorney fees, physical and psychological examinations, home studies and other expenses related to the legal adoption of a child with special needs. Before adopting a child with special needs, adoptive parents should carefully explore the entire area of state and federal adoption subsidy payments. Once an adoption is finalized, it may be too late to apply for or obtain any subsidy payments. More information about federal and state subsidy programs may be obtained by contacting the National Adoption Assistance Training, Resource, and Information Network (NAATRIN), at (800) 470-6665.

Adoption Subsidy: Are You Eligible?

Adoption subsidies are financial assistance from federal and state governments to families adopting children meeting certain requirements. Children with special medical, emotional, and/or developmental needs may be eligible, as are older children and sibling groups. An adoption subsidy is provided in these cases to make it easier for parent to adopt, knowing that they will be able to afford the special care these children will need.

An adoption subsidy may be provided in one of three different ways. Monthly financial assistance helps remove financial barriers for families adopting special needs children. Almost all children in public foster care are eligible for this kind of assistance, which will vary from child to child. Annual reviews are conducted to be sure the child is still eligible for these subsidies, which are based solely on the needs of the child. In other words, the adoptive parents' financial resources are not a factor in determining eligibility.

Another form of adoption subsidy is medical assistance. Children in subsidized adoptions are eligible for medical assistance through a Medicaid-managed care program.

The third form of adoption subsidy is a one-time subsidy, a nonrecurring payment which may be provided in addition to the monthly assistance. The purpose is to cover specific expenses or special services related to the adoption. Expenses that may be reimbursed include such items as adoption placement fees, court costs, attorney fees, and health/psychological examinations.

Before a child can be determined eligible for an adoption subsidy, he or she must meet two criteria. A local department of social services or a private agency must hold guardianship of the child, and the child could not be placed for adoption without the subsidy. In addition, the child must also meet one of four other criteria. The child must either be between the ages of 6 and 18 or a member of a minority group or must have a physical / mental / emotional handicap or must be a member of a sibling group to be placed together.

Providing an adoption subsidy has enabled thousands of children to be adopted when otherwise they would have remained in foster care. It is a program that is undeniably useful to children while saving taxpayer money at the same time.