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Negotiating Title IV-E Adoption Subsidy Agreements


The Adoption Assistance Agreement must be written and is a legal document that is binding on all parties. It is entered into by the prospective adoptive parents, the state or local adoption agency, and any other relevant agencies. The agreement must, at a minimum, specify the amount of the adoption assistance payments and any other services or assistance to be provided, and list the date when each benefit or service will begin and end.

The agreement must also include provisions for the protection of the interests of the child in interstate situations. Interstate situations may occur when the child is placed out of state for adoption or when the adoptive family moves from one state to another after the agreement goes into effect. The agreement must expressly stipulate that it will remain in effect regardless of the state of residency of the adoptive parents at any given time.

Below is a checklist of items that should be included in an adoption assistance agreement, as adapted from Adoption Law and Practice, "Chapter 9: Adoption Assistance for Children With Special Needs" by Alice Bussiere and Ellen C. Segal, published by Matthew Bender and Company, Inc., (1988).

  1. Is the assistance agreement a written document, and does it contain all of the promises made by the agency?
  2. Does the agreement spell out all of the responsibilities of the prospective adoptive parents? Are all financial reporting requirements and recertification requirements identified? Are there excessive restrictions placed upon the parents following the adoption?
  3. Is the agreement signed by someone with authority to bind the state agency?

  4. Are all necessary state agencies included as parties to the agreement?
  5. Does the agreement specify the amount of cash assistance, if any, that will be paid to the prospective adoptive parents?
  6. Does the agreement specify all of the necessary services to be provided?
  7. Does the agreement specify the date when each benefit or service will begin or terminate?
  1. Does the agreement specify the conditions under which benefits and services can be increased or decreased? Have the prospective adoptive parents fully considered any clause that restricts or limits their authority to negotiate changes in the future?

  1. Does the agreement specify that it will remain in effect until the child is 18 or 21 years old?
  2. Does the agreement specify that it will remain in effect if the adoptive family moves out of state? If the parents die?
  3. Does the agreement contain other provisions that will protect the interests of the child if the prospective adoptive family moves to another state? For instance, does it provide assurance that the child will continue to receive the same level of benefits and services?
  4. Does the agreement provide Medicaid eligibility for the child in the state where the child lives?
  5. Does the agreement describe the procedure for requesting a fair hearing?

When Does an Agreement End?

According to Section 473(a)(4) of the Act, a subsidy agreement shall remain in effect, unless one of the following occurs:

  1. the child has attained the age of 18 (or the age of 21 if the State has determined that the child has a mental or physical disability which would warrant continuation of assistance);
  2. the State determines that the adoptive parents are no longer legally responsible for support of the child; or
  3. the State determines that the adoptive parents are no longer providing any support to the child.

A parent is considered no longer legally responsible for the support of a child when parental rights have been terminated or when the child becomes an emancipated minor, marries, or enlists in the military. The Children's Bureau defined "any support" in  ACYF-CB-PIQ-98-02 as various forms of financial support. The State may determine that payments for family therapy, tuition, clothing, maintenance of special equipment in the home, or services for the child’s special needs, are acceptable forms of financial support. Consequently, the State may continue the Title IV-E adoption subsidy if it determines that the parent is, in fact, providing some form of financial support to the child even in situations where the child is placed in some form of out-of-home care.

What Rates Are Appropriate?

Adoption assistance payments made on behalf of a child cannot exceed the amount the child would have received if s/he had been in a foster family home. Accordingly, a State may negotiate an adoption assistance agreement that automatically allows for adjustments to the adoption assistance payment when there is an increase in the foster care board rate. Alternatively, a State may renegotiate an adoption assistance agreement if the adoptive parents request an increase in payment due to a change in their circumstance and a higher foster care rate would have been paid on behalf of the child if the child had still been in foster care. As an example, a child is adopted and the adoption assistance agreement is negotiated for $250 a month, the same amount the child had been receiving in foster care. If, two years later, the State’s monthly foster care board rate is increased to $400, the family can request that the adoption assistance agreement be renegotiated and receive up to $400 for the child, since this is the amount the child would have received each month if s/he had continued to be in foster care.

If a State’s foster care payment schedule includes higher level-of-care rates that are paid across-the-board for certain children, the State may pay up to that amount in adoption assistance if that specific child would have received the higher level-of-care rate in foster care. In addition, if a State’s foster care payment standard includes across-the-board higher foster care rates for working foster parents to pay for child care, or includes provisions for periodic across-the-board increases for such items as seasonal clothing, the adoption assistance agreement may include the higher rate. However, special allowances that may be made on behalf of an individual child in certain situations in foster care, such as child care or clothing allowances, are not permitted as an allowable additional reimbursement in the adoption assistance program. Special allowances for individual children that are over and above the State’s foster care payment standard cannot be included in the amount negotiated in the adoption assistance agreement since the adoption assistance payment cannot exceed the foster care maintenance payment rate for the child.

(The above information pertaining to rates is taken directly from ACYF-CB-PA-01-01)

Differences between States

There is quite a bit of difference in amounts and policy regarding adoption subsidy levels from state to state. Some states have many tiers of payment rates, some have two. Some have adequate rates, some are low. Some tie the amounts directly to foster care rates, and some do not. Each state is given the freedom to develop its own "rate structure" and to write its own definition of what "special needs" entails.

What states are cannot do is set "additional" requirements for "qualification for subsidy" other than those already described in federal law. In other words, states cannot modify or add to federal eligibility requirements.

As an example, a child may qualify in one state but not in another due to differences in the states’ legal definition of what constitutes ‘special needs.’ This is fine because states can write their own definition. However, no state can say, for example, that in addition to the IV-E requirements, no child shall be eligible for a subsidy unless they also qualify as developmentally delayed (DD). This is not one of the federal requirements so it cannot be a state requirement when it comes to Title IV-E adoption assistance.

Negotiation Considerations

When you sit down to negotiate your child's subsidy agreement, there are two factors that can be considered:

  • The needs of the child
  • The circumstances of the family

Obviously, the needs of the child pertain to his or her special medical or emotional needs. "Family circumstances" have been defined by the federal Children’s Bureau as meaning a family’s ability to incorporate a child’s needs into the family circumstances. Income, debt, housing, transportation, space, family size, parental occupations, parental health needs, the needs of other family members, climate, and any number of other factors must all be looked at together. There is no set formula.

The negotiation process looks at the overall needs and circumstance of the family as a starting point for further discussions. In most cases, circumstances will be such that the family must negotiate for maximum subsidy and services, and the agency suggests a lower amount. The task is then to find some middle or acceptable point at which to set the rate. Remember, each case is unique.

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If you are in the process of adopting a special needs child and need assistance in negotiating a subsidy agreement with your agency, please contact NACAC's Adoption Subsidy Resource Center at 800-470-6665, 651-644-3036, or e-mail at The Center was created by NACAC to help educate parents and professionals throughout the United States on adoption subsidy issues.



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