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[Current Status: Q&As 1, 2, 4, 5 and 6 withdrawn in January 2001 by PA-01-01]
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration on Children, Youth and Families
TO: State Agencies Administering or Supervising Administration of Title IV-E of the Social Security Act, Indian Tribes and Indian Tribal Organizations (ITOs)
SUBJECT: Title IV-E Adoption Assistance Agreements and the Use of a Means Test
STATEMENT OF PROBLEM:
Public Law (P.L.) 96-272, the Adoption Assistance and Child Welfare Act of 1980, established a program of adoption assistance for "children with special needs." This landmark legislation was intended to provide, for the first time, Federal financial participation with States in a program of incentives and supports to families adopting certain children who, because of a variety of specific factors or conditions, could not be adopted without assistance.
The legislative history of P.L. 96-272 indicates that Congress at first considered the inclusion of a "means test" as a requirement under the title IV-E adoption assistance program. At one point in Committee discussion, a family would not have been eligible to receive adoption assistance if its income exceeded 150% of the State median income for a family of four. However, this restriction was later dropped after the Committee noted that "we should not design a program to foster adoptions only in those families with the least financial capacity to care for these special needs Senate children." (See Congressional Record -- Senate -- S11704, August 3, 1979.)
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In the years since the enactment of P.L. 96-272, States have developed their title IV-E adoption assistance programs to comply with the State Plan requirements in section 471 and the program requirements in section 473 of the Social Security Act (the Act). Recently, however, questions have been raised by a number of States, through the Regional Offices of the office of Human Development Services, indicating that there is still uncertainty about the use of a means test and the appropriate method for negotiating an adoption assistance agreement with potential adoptive parents in relation to a child who is eligible for assistance under title IV-E.
BACKGROUND:
In order to be eligible for ongoing adoption assistance payments under title IV-E, a child must be eligible for Aid to Families With Dependent Children, title IV-E Foster Care, or Supplemental Security Income for the Blind and Disabled and meet the definition of a child with special needs according to section 473(c) of the Act. Under that section, the State title IV-E agency makes a determination as to whether a child is a child with special needs, according to the following factors: the child cannot or should not be returned to the home of the parents; there exists a specific factor or condition (such as the child's age, ethnic background, emotional, physical or mental handicap, or membership in a minority or sibling group) because of which it is reasonable to conclude that the child cannot be placed for adoption without providing adoption assistance; and, except where it would be against the best interests of the child, a reasonable, but unsuccessful, effort has been made to place the child without adoption assistance.
The title IV-E regulations at 45 CFR 1356.40(c) prohibit the use of a means test in the process of selecting suitable adoptive parents for a special needs child and in negotiating an adoption assistance agreement (including the amount of the adoption assistance payment). This means that, once a child is found eligible under section 473(c) of the Act, the child's adoptive parents may not be rejected for adoption assistance or have payments reduced without their agreement because of the level of their income or other resources. The purpose of the adoption assistance program is to provide incentives for families of any economic stratum and to remove barriers to the adoption of special needs children.
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Section 473(a)(3) of the Act states that the amount of the adoption assistance payment shall be determined through an agreement between the adoptive parents and the State or local agency and that the agreement "shall take into consideration the circumstances of the adopting parents and the needs of the child . . ." The language is interpreted to pertain to the parents' ability to incorporate the child into their household in relation to their lifestyle, standard of living and future plans and to their overall capacity to meet the immediate and future needs (including educational needs) of the child.
In some States, however, the language has been used to justify extensive investigation of the financial circumstances of the potential adoptive parents at the time of adoption and at yearly recertification periods subsequent to the adoption. There is no statutory requirement for such investigations; thus, Federal reimbursement is not available for costs associated with them.
Section 473(a)(4)(B) of the Act indicates that there are only two reasons (other than the child's age) why parents become ineligible for payments after the child is adopted: (1) the State determines that the parents are no longer legally responsible for the support of the child and (2) the State determines that the child is no longer receiving any support from the parents. The parents may also request termination of payments and services. Events not related to these conditions that occur subsequent to the adoption have no applicability to title IV-E eligibility.
LEGAL AND RELATED REFERENCES:
Section 473 of the Social Security Act; 45 CFR 1356.40(c); and ACYF-PIQ-82-02, dated January 19, 1982
INTERPRETATION TO:
Questions raised by Regional offices regarding the development of an adoption assistance agreement and the use of a means test.
QUESTION 1:
Can a State use criteria, such as State median incomeadjusted for family size or a sliding income scale, in determining the potential adoptive family's eligibility for adoption assistance?
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RESPONSE:
No. The regulations at 45 CFR 1356.40(c) prohibit the use of a means test in determining eligibility for adoption assistance payments. Therefore, States are prohibited from using criteria such as State median income or sliding income scales to determine the eligibility of adoptive parents to receive adoption assistance payments on behalf of a special needs child.
QUESTION 2:
Should State policy describe the procedure used by the State to determine eligibility for and the amount of adoption assistance?
RESPONSE:
Yes. The Title IV-E State Plan requires inclusion of State statutory, regulatory and policy references for each Federal statutory and regulatory requirement under title IV-E. As a result, States must address the procedures in place which meet the requirements regarding eligibility for and amount of adoption assistance as set forth in section 473 of the Act and 45 CFR 1356.40(c)
QUESTION 3:
Can the State median income adjusted to family size be used as a guide to establish consistency in determining amounts of payment?
RESPONSE:
No. The use of such guidelines is not appropriate to the process. During the negotiation of an adoption assistance agreement, it is important to keep in mind that the circumstances of the adopting parents and the needs of the child must be considered together. As stated in the Background section, this means the overall ability of a singular family to incorporate an individual child into the household. Families with the same incomes or in similar circumstances will not necessarily agree on identical types or amounts of assistance. The uniqueness of each child/family situation may result in different amounts of payment. Consistency is not the goal.
QUESTION 4:
Some States use the family's income as one of the factors considered in determining the amount of the adoption assistance payment, since Policy Interpretation Question ACYF-PIQ-82-02, dated January 19, 1982, states: "if Mississippi uses the means test, in conjunction with the needs of the child, to determine the amount of assistance, it is a permissible tool." When determining the amount of the monthly payment, are all factors of consideration given equal weight? When setting the amount of the monthly payment, can the family's income be the major factor in determining the amount of monthly payment?
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RESPONSE:
Policy Interpretation Question ACYF-PIQ-82-02 predated the Final Rule, dated May 23, 1983, which takes precedence over previously written policy issuances. The regulations at 45 CFR 1356.40(c) specifically prohibit the use of a means test for prospective adoptive parents in determining their eligibility for payments.
Sections 473(a)(1), (2) and (3) of the Act clearly indicate that eligibility for adoption assistance is related to the child and not the parent; therefore, the negotiation should focus on the needs of the child. As stated in the Background section, section 473(a)(3) allows for the circumstances of the adopting parents to be taken into consideration, in conjunction with the needs of the child, in determining the amount of adoption assistance. In doing so, the State should consider what it would take to incorporate a specific child, with his or her specific needs, into a particular household.
QUESTION 5:
Can the State deny an adoption assistance payment to potential adoptive parents who have chosen to defer their maximum income potential while pursuing a higher education? For instance, an infant is considered to be a special needs child because of a combination of medical problems and minority status. A family is interested in adopting but will need help with the medical expenses, as the child will need corrective surgery plus ongoing medical care. The prospective adoptive parents are both medical students and have two years to complete their internships. They request monthly adoption assistance payments for two years and ongoing medical assistance after that time. Can the State deny cash payments or limit assistance to medical care?
RESPONSE:
No. The State cannot deny adoption assistance payments because the adoptive parents have chosen to defer their maximum income potential while pursuing a higher education. The adoptive parents' income is not relevant to the child's eligibility for adoption assistance payments. As stated in an earlier response, the eligibility for adoption assistance is related to the child and not the parent. The example can be used, however, to demonstrate the process described in response to previous questions; that is, that adoption assistance agreements are developed for individual situations. In this case, the discussion of payment would take into consideration the parents' plans and their request for assistance to meet the needs of the child during a specific period. This,
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too, could be adjusted at some time in the future. If agreement cannot be reached between the agency and the adoptive parents, they have the right to request a fair hearing.
QUESTION 6:
In a similar situation, parents already receiving assistance payments return to school for a one-year training program and request an increase in the amount of payment for that period of time to meet the needs of the child. Can the agency deny this request based on the voluntary nature of the change in income level or the fact that the modification in income may not relate to the original need or circumstances at the time of the initial agreement?
RESPONSE:
The State cannot arbitrarily reject such requests. Section 473(a)(3) requires the State to consider the circumstances of the adopting parents when determining the amount of payment and allows for periodic readjustment depending upon changes in such circumstances. The statute does not limit the changes in circumstances to those which are beyond the parents control. As in the response to Question #5 above, the agency should consider such requests in a renegotiation of the adoption assistance agreement with regard for the parents' plans for meeting the needs of the child during a specific time period. If the agency refuses to consider a renegotiation of the adoption assistance agreement, the adoptive parents have the right to request a fair hearing.
DISCUSSION:
The title IV-E Adoption Assistance Program has a broad purpose and, unlike other public assistance programs in the Social Security Act, it is intended to encourage an action which will be of lifelong social benefit to a certain category of children and not generally to meet short-term monetary needs during a temporary period of economic crisis.
Under title IV-E, the term "adoption assistance" means, literally, to assist the adoption of children with special needs. Experience in public child welfare agencies has shown that, in the past, many children with special problems and disabilities have grown up in foster homes or institutions, without the security of belonging to a family of their own. Assisting in the adoption of such children is not only beneficial for the children and enriching for families, but is also cost-beneficial to State agencies in that administrative costs in the adoption assistance program can be far less than in the foster care program.
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Means testing concepts such as those illustrated in the examples cited in this policy issuance are not appropriate in the title IV-E adoption assistance program and should not be acted upon in the negotiation of an agreement with prospective adoptive parents. Adoptive parents are selected for their ability to provide permanent and stable homes for special needs children and are not expected to change their long-term plans because of the adoption of such children. Under the title IV-E program, even though adoption assistance payments are made, the agency does not control or participate in family choices regarding lifestyle or career plans.
Wade F. Horn, Ph.D.
Commissioner