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Federal Legislation Makes Major Changes to Funding for Foster Care

Significant changes to federal funding for foster care were enacted in February with passage of the Family First Prevention Services Act (FFPSA), which was incorporated into the Bipartisan Budget Act of 2018. FFPSA is the product of several years of discussion in Congress about ways to improve access to services to prevent children from being placed in foster care, rather than supplying federal funds to assist with maintenance of a child only after he or she has been removed from the home. An earlier version of the legislation passed the House in 2016, but stalled in the Senate.

The legislation restructures the current federal foster care program, which is governed by Title IV-E of the Social Security Act. Title IV-E funds have historically been used to match state expenditures for maintenance costs of children who have been removed from their homes; maintenance costs include expenses such as food, clothing, school supplies, and reasonable travel for children to visit family or attend school. In addition to the requirement that the child has been removed from the home of a specified relative, eligibility for maintenance payments is based on income criteria.

Beginning October 1, 2019, FFPSA expands the use of IV-E funds to prevention services for families of children who would otherwise likely enter foster care, without regard to family income. These services – in-home parent skills-based programs and substance abuse and mental health treatment services — could be funded for up to 12 months, and would need to meet certain standards of evidence for effectiveness. States are subject to maintenance-of-effort requirements.

FFPSA also makes major changes effective in October 2019 to the use of existing IV-E maintenance funding by imposing a two-week limit on use of IV-E maintenance funds for children placed in congregate care settings, such as group homes, unless the placement meets certain standards (for example, specialized placements for children who are victims of sex trafficking or family-based residential substance abuse treatment). FFPSA allows maintenance payments for children placed in Qualified Residential Treatment Programs meeting certain criteria set out in the legislation.
As a means of funding the additional prevention services, FFPSA delays the planned phase-in of providing federal funding for adoption assistance without regard to income. This provision took effect upon passage of the legislation; states may request a two-year delay of the limitations on use of maintenance funds for congregate care, but such action would also delay a state’s access to the additional prevention funds.

The Secretary of Health and Human Services is required to provide guidance to states on FFPSA implementation by October 1, 2018. Federal guidance will be critical to Virginia’s implementation process due to Virginia’s unique structure for provision of services to children in foster care through the Children’s Services Act. The state Department of Social Services and the Office of Children’s Services are in the process of assembling a workgroup to prepare to implement the legislation; VACo will be participating, along with other interested parties. VACo will provide updates to members as implementation proceeds.

VACo Contact: Katie Boyle

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