Senators Ask GAO to Examine Options for Expanding IV-E Eligibility

This week Senators Max Baucus (D-MT), Orrin Hatch (R-UT), and Ron Wyden (D-OR) sent a letter to the U.S. Government Accountability Office (GAO) formally requesting that the agency conduct a review of policy options for de-linking eligibility for federal foster care assistance under Title IV-E from the income standards it is currently tied to.

Under current law, a state may only claim federal reimbursements for the cost of foster care for children whose biological families would have qualified for the Aid to Families with Dependent Children (AFDC) program in 1996.  In their letter, the three senators point out the decreasing percentage of children in foster care who are covered by IV-E, which is known as the penetration rate.  Since this income standard has not been increased or indexed for inflation in more than 15 years, the federal government provides IV-E foster care funding to fewer than half of children in out-of-home care (the most recent available national penetration rate was 44% in fiscal year 2010).

As GAO conducts its review of policy options, the senators ask the agency to give consideration to whether the options meet four criteria: elimination of means testing, budget neutrality, maintaining funding levels that states currently receive from IV-E reimbursements, and ensuring that any state savings achieved are reinvested in serving children in foster care.  The letter also acknowledges the administrative burden that income verification places on child welfare agencies, something raised by frontline workers in CWLA’s recent survey on finance reform.

CWLA believes that the federal government has a responsibility to all children in the foster care system, regardless of their family’s income, and has long advocated elimination of the current AFDC link, most recently in CWLA’s 2012 Legislative Agenda.  As such, we are very supportive of the effort by these three senators to enlist GAO’s time and expertise in furthering the discussion about de-linking.  As senior members of the Senate Finance Committee, including the Chairman and Ranking Member, the senators’ request should be given high priority by the GAO.

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