Last week HHS awarded the annual adoption incentives now renamed the Adoption and Legal Guardianship Incentive Payments Program. The awards cover adoptions and kinship placements that took place in federal fiscal year 2014 (FY ’14) with the dollars coming from FY 2015. Total funding awarded was $18 million despite the appropriations available set at $38 million. Eighteen million dollars was distributed in this latest round because, as has been the case since the creation of the incentive fund, HHS made up for a shortfall of funding in the previous year by taking from current appropriations. As a result, last year’s total incentive fund (FY 2013 awards) reached $46 million, the highest total given to states in the history of the program.

The $18 million distributed last week went to all but five states (Kansas, Massachusetts, Michigan, New Hampshire and New Mexico). The $18 million total represents just 38 percent of what the states should have been awarded. To pay all states what they earned the appropriations should be approximately $49 million.

This year’s award was revised in last year’s Preventing Sex Trafficking and Strengthening Families Act in several ways:


  • In addition to rewarding an increase in adoption from foster care, states are awarded based on increases in subsidized guardianships.
  • The awards were adjusted in terms of categories of adoptions/guardianship placements so that $5000 is earned per increased adoptions, $4000 for overall kinship placements $7500 per pre-adolescent (9 to 14) adoption/guardianship placements, $10,000 per increase in in older adoption/kinship placements (ages 14 and older)
  • The awards as always are based on an increase over the previous year but this formula is based on a rate increase instead a specific number. That is intended to allow states that have been reducing their foster care population (thus reducing the pool of children waiting for adoption) to receive an award for positive permanency policies.
  • All awards for guardianships are new and the formula and the subcategory targeting ages 9 through 14 is new and is an attempt to place a greater focus on a population that have represented an increased presence in the waiting to be adopted category.

This year’s awards are complicated by two additional factors, because some in Congress wanted to protect states that had experienced significant increases in adoptions under the old formula, they phased in the new formula. Half of this year’s funding was awarded under the old formula and half was awarded based on the new formula. That will change next year.

The other factor is more challenging. At $18 million and as noted, this year’s awards are only a portion of what states earned despite the fact that Congress appropriated $38 million. Since the incentive fund was created under the Adoption and Safe Families Act (ASFA), HHS has been able to adjust a lack of full funding in one year by taking from the following year’s appropriations. In the beginning years Congress would recognize this and provide an extra amount of appropriation that attempted to address both the shortfall as well as the new year’s awards. Congress has stopped appropriating funds in that way and in fact in recent years been cutting the Adoption Incentive Fund from its high of approximately $43 million to the current total of $38 million.   If HHS adjusts next year’s shortfall of 61 percent in FY ‘14 awards by taking from the FY 2016 funding (still to be determined) the program risks falling closer to pushing the awards a year behind.

Now that the previous year’s awards are fully funded (FY 2014 awards) the top five states in awards were: Texas ($ 12 million), Arizona ($7.4 million), Florida ($6 million), West Virginia ($3.2 million) and Louisiana ($2.4 million). For FY 2015 awards, this year’s announcement: Texas ($4.1 million), Arizona ($2.7 million), Florida ($1 million), West Virginia ($862,000), Illinois ($799,000). Although specific data is not broken out, the state of Illinois likely benefited from the new formula’s kinship/guardianship award. Illinois has gone without for several years in regard to the adoption incentive formula.

For more information on individual state awards through the history of the incentive fund you can go to the Adoption and Legal Guardianship Incentive Payments Program.