The largest pot of dedicated funds for the child welfare system comes from Title IVE of the Social Security Act. (Bess, R n.p) In 2000, Title IV-E provided 48% of all federal spending on child welfare. Under Title IV-E, the federal government reimburses states for a portion of the costs associated with out-of-home care, but not for costs associated with prevention, counseling, and drug-abuse treatment. (Jones n.p.)
Income eligibility for Title IV-E is tied to the status of the birth parents, and the number of income-eligible children varies widely across states. (Geen .n.p) Currently, Title IV-E income ceilings are derived from the eligibility rules for the Aid to Families with Dependent Children (AFDC) program in 1996 even though this program no longer exists. In 1999, approximately 55% of children in foster care were eligible for Title IV-E, but as the benchmark date for income eligibility moves farther into the past, more children are at risk of losing their …show more content…
Recent economic downturn, states have begun to report declines in TANF funding for child welfare services in 2002 and 2003. (Geen, R.) The diminishing amount of TANF funds available for child welfare since 2000 underscores the need to address Title IV-E funding constraints. In fact, reforming the child welfare federal financing structure has been a topic of concern for several years. To test innovation and encourage reform, in 1994 the federal government approved waivers from Title IV-E funding regulations in 10 states. In 1997, Congress expanded the number of waivers to 10 per year for 5 years. Waivers are a useful way of determining whether new uses for federal monies can improve outcomes for children and families. Currently, 25 waivers have been granted to 17 states to support such initiatives as subsidized guardianship, tribal access to Title IV-E money, substance-abuse treatment for caregivers, and enhanced training for child welfare workers. (Geen R.) Expanding the number of waivers available can continue to build research to inform the restructure of federal financing.
Other financing reform efforts are forming. In 2003, the Pew Foundation created a Commission on Children in Foster Care charged with examining how to improve existing federal financing mechanisms