Parents adopt children with special needs and sign an adoption assistance agreement with the belief that the benefits (financial and services) will follow the child in most cases until he reaches age 18 or graduates high school. Unfortunately, some state and county agencies are responding to tough economic cutback by altering these agreements.

Below we discuss the annual review process mandated by states and list the three situations when states have the right to terminate adoption assistance agreements, as per federal policy. We then outline situations when across-the-board cuts are made to all children from a specific state. Finally, we highlight situations when subsidy agreements are being abruptly suspended (terminated) on behalf of children who require out-of-home care. Instead of termination, we discuss the negotiation of an appropriate rate while the child is in residential care.

Modifying Agreements During Annual Reviews

NACAC staff frequently hear from parents across the U.S. that the assistance agreements families sign on behalf of children with special needs are modified by state agencies during the annual review process. These agreements are being changed at the agency office and mailed back to parents with services crossed out, key dates modified, and dollar amounts reduced. One parent living in a midwestern state told us that she was notified by mail that the day care payment she received was no longer available as of her next review in three months. She told us, “The day care portion (of the agreement) was just crossed off! I depend on that monthly payment–it’s built into our family’s budget.”

The annual review process is not mandated under federal law or policy. Instead, we’re told the yearly check-in is a state policy created to help administer the program. An annual review or recertification provides administrators information on whether children are still living at the home, how children and families are doing, and if their needs have changed. The process was intended to check-in with the family and determine if the current agreement reflected the child’s actual needs, which might mean increasing or decreasing the level of services. States that have policies to review agreements range in frequency of review from every year to every three years, but most review agreements every year.

Across-the-Board Cuts

According to Section 473(a)(3) of the Social Security Act, states cannot modify or change an adoption assistance agreement without the concurrence of the parents. However, if a state were to make an across the board reduction to the state’s foster care rates and the subsidy rates equaled these rates, the state would be required to reduce all adoption assistance agreements accordingly. This would ensure that the subsidy payments would not exceed the foster care rates, which is also required by federal law. To date, we are only aware of one state, Oregon, having taken this option by reducing all subsidy agreements by 7.5 percent across-the board. In this case, Oregon sent a letter to all families impacted by the reductions, provided a copy of each newly modified assistance agreement, and asked the parent(s) to sign the agreement or risk loss of the assistance all together. We are aware of a handful of families who requested an administrative appeal due to the reductions.

When Can Assistance Agreements be Terminated?

Parents often wonder under what circumstances the State agency may legally terminate an adoption assistance agreement. According to Section 8.2D.5 of the Child Welfare Policy Manual (CWPM), once an adoption assistance agreement is signed and in effect, it can only be terminated under three circumstances:

  • 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);
  • the State determines that the adoptive parents are no longer legally responsible for support of the child; or
  • the State determines that the adoptive parents are no longer providing any support to the child.

Section 473(a)(4)(B) of the Social Security Act states that no adoption assistance payment can be made, “to parents with respect to any child if the State determines that the parents are no longer legally responsible for the support of the child or if the State determines that the child is no longer receiving any support from such parents.” The CWPM states that 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 (Section 8.2D.5).

So the question remains–when is a parent considered to be “no longer legally responsible for support” or not providing “any support” for the child?

Are Parents Providing Support if the Child Is Out of the Home?

When a child is not living at home, some agencies automatically assume that the parents are not providing support to the child and terminate the monthly maintenance payment. States are NOT permitted to automatically suspend adoption assistance payments when a child leaves the home. An automatic suspension is, in effect, the equivalent to a termination of the adoption assistance payment and as such is unallowable under section 473(a)(3)(B) if the parent remains legally responsible or is providing any support for the child (CWPM Section 8.2D.5).

Families often provide on-going support to the youngster from afar. The CWPM states that “any support” includes 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 adoption assistance if it determines that the parent is, in fact, providing some form of financial support to the child (CWPM Section 8.2D.5).

In many cases, residential treatment is the only option available to the family of a troubled youth who wants to avoid an adoption dissolution. When children are placed in residential facilities, it becomes somewhat of a gray area in terms of “parental support.” While NACAC urges parents to notify the agency responsible for paying the subsidy of the child’s new living arrangements, some parents are hesitant about doing so due to the fear of an automatic elimination of the subsidy.

Renegotiating the Agreement

It is clear that most, if not all, families continue providing for their children living in residential treatment settings. Parents often make frequent long distance trips to visit their children and to participate in family therapy. They continue to provide clothing, personal care products, books, gifts, and other personal belongings while the child is away. Parents send letters, packages, and make long distant phone calls.

An interview with one family revealed the following expenses over and above the tuition, transportation, personal toiletries, and visitation costs associated with the teenager attending a residential treatment center.

The unexpected costs included:

  • $100 At-home parenting course (required)
  • $150 Back to school clothes every September, in addition to annual clothing and shoes
  • $50 Holiday gifts on behalf of the teen
  • $150 Extra-curricular school activities while in care
  • $100 Special summer camp programs
  • $100 Airline penalty on a plane ticket to send the out-of-control son back early from a visit
  • $90 Damages to furniture at RTC
  • $75 Special vitamins to help with the teen’s concentration (monthly expense)
  • $25 Monthly payment on the child’s tuba
  • $840 Total, Plus $100 in monthly expenses

It may be appropriate to renegotiate the amount of the subsidy to reflect a family’s lower monthly contribution to the young person’s care, but it is rarely appropriate to end an adoption assistance agreement. The example above reflects this quite clearly. A compromise between the agency and the family to meet the child’s needs might include the following:

  • A transfer of the Medicaid card to the residential treatment facility;
  • Adjusting the monthly payment to cover a family’s real expenses–clothes, shoes, gifts, personal items, and more;
  • Factoring in the costs related to travel to and from the facility;
  • Loss of income due to required parental visitation or required participation in family therapy sessions;
  • Providing for child care expenses while the parent visits the child in treatment, assuming there are younger siblings at home;
  • Covering hotel expenses for the parents related to visits, if required;
  • Other child- and family-specific expenses.


The North American Council on Adoptable Children believes it is inappropriate to assume that a family’s financial, not to mention emotional, responsibilities to a child end when a child enters treatment. Families parenting from afar are still parenting. Their children still deserve the help and support of the child welfare system. Not only does this serve the best interests of the child by keeping the family attached, but it can avoid an adoption dissolution.

NACAC appreciates the assistance of Dr. Rita Laws for contributing to this fact sheet.

For more information, contact NACAC’s Adoption Subsidy Resource Center at 800-470-6665, 651-644-3036, or email at The Center is funded in part by the Dave Thomas Foundation for Adoption.

Categories: Adoption Assistance/Subsidy US

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