Follow the Money:
The Financial Aspects of Adoption

Presented by Madelyn Freundlich, Children's Rights, Inc.
NYS Citizens' Coalition for Children, Inc.
13th Annual Statewide Adoption Training Conference
Adoption 2002: Linking Promises to Possibilities
May 10, 2002 • Albany New York  

 

 WORKSHOP OUTLINE
The Tangible and Intangible Costs of Adoption

 

Governmental Financial Supports

• Title IV-E: Adoption Assistance and State Adoption Assistance Programs
  • Subsidy
  • Medicaid
  • Non-Recurring Adoption Expenses
    
• Tax Credits
  • Basic tax credit
    • Tax credit dollar limits: originally was $5,000/$6000
    • Applies to "qualifying adoption expenses"
    • Available to families with incomes under certain levels
  • Changes in the tax credit in 2001
    • Make the credit permanent for all adoptions
    • Maximum credit now $10,000 for all adoptions
    • For special needs adoptions, credit now allowed in year of finalization up to level of qualifying adoption expenses
    • Increased AGI (Adjusted Gross Income) levels:
      • no adjustment until $150,000 (previously $75,000)
      • adjustment begins at $150,000 (previously $75,000)
      • credit eliminated at $190,000 (previously $115,000)
  • Effective date of changes
    • Start date of special needs adoption flat tax credit: January 1, 2003
    • Efforts being made to move effective date to January 1, 2002 (Fairness for Foster Care Families Act of 2001)
      
• Adoption Incentive Payments to States
  • Authorized by the Adoption Safe Families Act of 1997
  • Bonus of $4000 per adoption and $6000 per adoption of a child with special needs over the established baseline

Adoption Assistance

• Federal adoption assistance program under Title IV-E of the Social Security Act
  • Children with "special needs"
  • Eligibility based on AFDC or SSI
  • Written agreement between adoptive parents and agency
  • Rules regarding how to calculate and what may be considered
  • Medicaid coverage
  • Non-recurring adoption expenses of up to $2,000 (Federal program - 50% federal match)
    • Reasonable/necessary adoption fees
    • Attorney fees
    • Court costs
    • Other expenses directly related to the adoption of a child with special needs
      
• State-funded adoption assistance programs

How States are Using Adoptive Incentive Payments

• Post-adoption services
• Recruitment of adoptive families
• Legal services to expedite adoption
• Contract enhancements for a range of adoption-related services
• Training for adoption staff and mental health providers
• Adoption awareness activities
• Subsidy increases

New York State Subsidy Profile

• NYS definition of "special needs"
• Rules regarding subsidy rates
• Extent of Medicaid coverage
• Rules regarding non-recurring adoption expenses
• Other services

New York State Adoption Incentive Payments

• FY 1998
  • 3 year average baseline (FY 1995-1997): $4,716
  • FY 1998: $4,822 = 2% increase
  • Bonus: $199,423
• FY 1999 - Did not quality for a bonus
• FY 2000 - Did not quality for a bonus

Out of Pocket Payments

• Private adoption (infant adoption in the US or international adoption). Virtually all payments are with private dollars. Benefits available: tax credit
• Public agency adoption - Limited by still an issue in some adoptions, i.e., travel costs related to adopting a child in another state

 

6/24/02