Financial Assistance

State and Federal Adoption Assistance: Financial Assistance

Adoption assistance was instituted in the 1980s to encourage families to adopt children who were languishing in the states’ foster care systems and who were not likely to be adopted unless families were given some financial assistance to help them meet these children’s special needs. Such assistance was not intended to support private or international adoptions or to be a “rescue program” for adoptive families who were facing difficulties with their adopted children. However, in some cases, children who were adopted through private adoption agencies and qualify for Social Security may qualify for federal or state adoption assistance.

Who Qualifies

It is the child who qualifies for adoption assistance, not the family. The adopting family’s income is not a determining factor as to whether or not the child qualifies.

A. A child who has been in state custody must meet all three of the following criteria:

  • The state has determined the child cannot or should not be returned to the home of his/her parents, and;
  • The state can document that reasonable efforts were made to place the child for adoption without providing adoption assistance, or that the child has a significant parent/child relationship with the adopting parent(s), and;
  • The child meets the state definition of a child with special needs. This means the child meets one of the following criteria: a) is age 5 or older, or; b) is under the age of 18 with a documented physical, emotional or mental disability, or; c) is a member of a sibling group placed together for adoption.

The child’s documented level of special need or a change in the family’s ability to meet those needs are the basis for an increase or decrease in the level of subsidy. The family or caseworker may initiate a change in the amount of subsidy.

B. Children placed through private licensed adoption agencies or through independent adoptions will be eligible for adoption assistance only if they are SSI eligible, as determined by the Social Security Administration, at the time the adoption petition is filed. (An exception is if they had adoption assistance in a previous adoption.)

Children who were eligible for adoption assistance in a previous adoption may receive adoption assistance in a subsequent adoption as long as they still meet the state definition of a child with special needs.

The Adoption Assistance Application Process

If the child you are adopting is in the custody of the state it is the responsibility of Division of Child & Family Services (DCFS) to notify you of the availability of State and Federal Adoption Assistance prior to finalization of the adoption. Adoption assistance payments can only be made to adoptive parents who have entered into a written Adoption Assistance Agreement with DCFS. The written agreement is binding on the parties to the agreement and must be signed prior to the final decree of adoption.

Adoption assistance payments cannot begin until:

  1. the child is placed for adoption in accordance with State rules; 
  2. the adoption assistance agreement has been approved by the adoption subsidy committee; and,
  3. there is a signed adoption agreement.

Adoption assistance payments can begin as soon the adoption assistance agreement is approved and signed and the child is placed into an approved adoptive home. Be sure your adoption or foster care worker has provided you with the application forms, has indicated where you will apply for adoption assistance in your region of the State, and that you have a copy of a signed adoption agreement prior to finalizing.

Types of Adoption Assistance

A. Reimbursement of Non-Recurring Adoption Expenses

This reimbursement covers up to $2,000 of one-time reasonable and customary expenses related to the adoption. Covered expenses include:

  1. Adoption fees
  2. Attorney fees
  3. Adoption home study fees
  4. Health and psychological examinations
  5. Supervision of the placement prior to adoption
  6. Transportation and reasonable costs of lodging and food for the child and/or adopting parents during the placement or adoption process.

These expenses are eligible for reimbursement through Federal IV-E funds for each child qualifying for adoption assistance. Reimbursement is limited to adoption related costs incurred prior to finalization and approved by the Adoption Subsidy Committee. Adoptive parents are required to provide receipts for expenses.

It is not the intent of the monthly subsidy funds to pay for items such as orthodontics, glasses, lessons, school expenses, and other normal, expected childhood expenses.

B. Monthly Subsidy

Parents may receive a monthly subsidy to assist with costs of adopting a child with special needs. The monthly subsidy is intended to provide support to the child and family for the expenses incurred as a result of the child’s special needs. Adoption assistance is not intended to pay for basic expenses normally associated with raising a child, such as orthodontics, lessons, school expenses and other normal, expected childhood expenses.

The monthly subsidy portion of adoption assistance is a cash payment to the family, not a maintenance payment. The money may be used for anything the family wishes. The State may not dictate nor review how those funds are used by the family.

The amount of the monthly subsidy is negotiated and agreed upon by the family and the State where the child was in custody. It is determined by the special needs of the child and the ability of the family to meet those needs. The amount of monthly subsidy is determined by DCFS policy. Although family income is not a determining factor in qualifying a child for adoption assistance, it may be a factor in determining the ability of the family to meet the child’s special needs. Under no circumstances may the amount of monthly subsidy exceed the amount the child would qualify for if in foster care.

The child’s documented level of special need or a change in the family’s ability to meet those needs are the basis for an increase or decrease in the amount of the subsidy. The family or caseworker may initiate a change in the amount of subsidy and it may be renegotiated at any time, not just at the time of the review.

If the State reduces the amount of the monthly subsidy without the agreement of the family, for any reason, the family has the right to a fair hearing to appeal that reduction. The State has an obligation to notify the parent of the right to a fair hearing in the event that a subsidy is reduced.

If the child is determined to be IV-E eligible, federal matching funds help pay for the monthly subsidy. If the child is not IV-E eligible, the monthly subsidy is fully paid with State funds.

Federal IRS publications include tax information regarding the receipt of adoption subsidy payments. Generally, the instruction is, “Do not include in your income payments from a state agency to help you care for your adopted child.” There are exceptions where you may incur some tax liability if your reimbursements exceed your expenses or if you do not provide support to the child for more than half the year. Check with your tax accountant.

C. Medicaid

Medicaid coverage is available to a qualifying adopted child with an adoption assistance agreement. The child does not have to receive a cash payment through the adoption assistance agreement to receive Medicaid.

Medicaid assistance covers the cost of medical care and mental health care not covered by the family’s private insurance. In some cases, a family may choose not to include the adopted child in the family’s private health insurance. You will be required to fill out the application for Medicaid services and to complete an annual review form to maintain the medical card.

Medicaid coverage begins the date of the Adoption Assistance Agreement and may cover services 90 days prior to that date if approved. If services were rendered prior to an executed Adoption Assistance Agreement or earlier than 90 days before application, Medicaid cannot cover those services. Your region’s Medicaid Eligibility Worker will inform you of the medical choices in your area. Along the Wasatch Front, you will be required to select an HMO; you will want to look at the provider list to make sure that the physician you are seeing is listed with both your private insurance as well as your Medicaid HMO.

If you take your child to a provider that is not listed within the HMO, Medicaid will not cover the services. Also along the Wasatch Front, mental health services are available through the community mental health centers. You must apply for mental health treatment through a qualified Medicaid provider. In some cases, a family may choose not to include the adopted child in the family's private health insurance.

"Parents who have adopted a child from public foster care who receives Subsidized Adoption Medicaid Assistance should expect to receive 1095 tax form in the mail from the Utah State Department of Health in 2016. Beginning with the 2015 tax year, families are required to report health insurance coverage on their federal tax return or they may incur a tax penalty for being uninsured.  The 1095 form will verify the months your adopted child recieved Medicaid health insurance coverage.  

If you have questions, please contact Department of Health at (866) 608-9422 "

D. Supplemental Adoption Assistance

Subject to the availability of state funds, supplemental adoption assistance may be available for financial support for extraordinary, infrequent, or uncommon documented needs not otherwise covered by a monthly subsidy, state medical assistance, or other public benefits for which a child who has a special need is eligible. This is subject to the approval of the regional Division of Child & Family Services Adoption Subsidy Committee or if involving more than $3,000 in assistance, also the approval of a State Review Committee.