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Adoption Subsidy Definitions

In foster care and adoption in the U.S., many abbreviations, acronyms, and special phrases are used. Below is a brief list of common subsidy-related terms and their definitions.

Adoption Assistance

Adoption assistance or subsidy is provided for children with special needs as an incentive to help get children adopted. A subsidy agreement should be negotiated prior to the finalization of an adoption, and may include monthly maintenance payments, medical coverage, and other services such as therapy and respite care, as outlined in state and county policy.

Title IV-E

The federally funded adoption assistance program that provides financial support to adoptive parents of children with special needs. A portion of the support is federally funded, and the remaining portion may be all state dollars or a mix of state and county dollars. Title IV-E children are either AFDC- or SSI-eligible prior to adoption.


State funded children are often referred to as non-Title IV-E children. These special needs children are funded by state and/or county dollars, and are neither AFDC- nor SSI-eligible prior to adoption.


Aid to Families with Dependent Children. This program no longer exists at the federal level as it was replaced with TANF—temporary aid to needy families. However, the rules for AFDC as of June 1996 are used to qualify a child for the Title IV-E Adoption Assistance Program. Specifically, a child whose biological family is of low income (e.g., receiving food stamps or some other type of welfare) and who is deprived of parental support (i.e., only one biological parent was in the home when the child was removed from the home) can be considered eligible for AFDC.


Supplemental Security Income. Children eligible for SSI are significantly disabled. Common diagnoses that qualify a child for SSI include Down’s Syndrome, deafness and blindness, and cerebral palsy.


Non-recurring adoption expenses are one-time expenses directly related to the finalization of a child with special needs. Typical expenses that are paid or reimbursed to the family include the home study fees, attorney fees, replacement of the birth certificate, and travel to and from the child, including mileage, lodging and meal

Means Testing

This refers to using a family’s income to determine eligibility for a subsidy. While this is not common among states, it does happen occasionally. Means testing eligibility is different from means testing the level of the subsidy. While is it permissible to look at the child’s condition along side the family’s resources to set the monthly rate of the subsidy, it is not appropriate to disqualify a child for eligibility based on family income.

Federal policy guidance states that means testing eligibility for Title IV-E is not allowed. However, state funded (non-IV-E Programs) can be means tested. In addition, Supplemental Security Income (SSI) is means tested.

Title XX

Title XX Social Services are a flexible block grant of monies from the federal government to state governments. Some states pass the money directly from the federal level to the county level. Few states provide direct services to adoptive families using these monies, as was once the common practice. If a state does provide a service such as day care or respite care, families can apply for these services just like any other family.

Specialized Rates

Specialized maintenance rates are based on the extraordinary needs of the child, and/or the additional parenting skills required to raise the child. These rates are provided at state option. Other terms used by states include level of care (LOC) increments, difficulty of care rates (DOC), and exceptional rates.

Fair Hearings

An administrative hearing can be requested by parents if they believe they have been treated unfairly by the agency or in an untimely manner. Often, parents take the agency to hearing because the agency reduced the foster care or adoption subsidy rate without due notice or if the parents finalized an adoption of a special needs child without subsidy and believe the child is (and was) eligible.


Early and Periodic Screening, Diagnostic and Treatment Services is a program intended to maintain and enhance the health and development of Medicaid eligible children and adolescents. Basic benefits under EPSDT are screening (e.g., medical history, physical exams, tests) vision, dental and hearing services, and other necessary health care. Title IV-E children are automatically eligible for these services, and non-IV-E adoptees may be Medicaid eligible if the state providing the subsidy elected to cover them in accord with program options in the law. The importance of EPSDT is that if a doctor finds in a screening or test that a child has a specific condition, Medicaid must provide treatment of that condition.

Subsidized Guardianship

Private guardianship involves the transfer of legal responsibility for a state ward from public custody to a private caregiver who becomes the legal guardian of the child. Unlike adoption, guardianship does not require surrender or termination of parental rights. Subsidized guardianship allows the caregiver to receive a monthly payment on behalf of the child, similar to the adoption assistance payments.



North American Council on Adoptable Children (NACAC)
970 Raymond Avenue, Suite 106
St. Paul, MN 55114
phone: 651-644-3036
fax: 651-644-9848