Kinship Guardianship Assistance Payment (Kin–GAP) Program

The Kin–GAP program was established to enhance family preservation and stability by placing foster children in long–term placements with relative caregivers. Under Kin–GAP, a dependent child who has been living with a relative for at least 12 months in Foster Care may receive a monthly grant if the relative assumes guardianship and the dependency case is dismissed. The grant is identical to the one the child received while in Foster Care. California operates Kin–GAP with state and county funds only, with the state paying roughly 75 percent of the costs.

New Federal Legislation Allows Federally Subsidized Guardianship Payments

The President signed the Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110–351) into law on October 7, 2008. Among its many provisions impacting the child welfare system, the act creates an option for states to provide subsidized kinship guardianship payments with federal financial participation (FFP) through federal Title IV–E funds. (The Title IV–E program provides support to states for the costs of eligible children placed in foster homes or other types of out–of–home care under a court order or in other situations.)

While the Governor’s budget does not include a proposal related to this new federal act, we believe the Legislature should take advantage of newly available federal funds for guardianship programs. Below, we review this provision, outline steps California could take to begin drawing down new federal funds for existing and new potential Kin–GAP cases, and identify key issues for legislative consideration.

Eligibility Requirements for Obtaining FFP. To receive FFP for kinship guardianship payments, a child must have been eligible for federal Title IV–E foster care maintenance payments while residing for at least six months in the home of the prospective relative guardian. In addition, among other requirements, the state must (1) determine that returning home or adoption is not appropriate permanency options for the child, and (2) negotiate and enter into a written kinship guardianship agreement that, among other requirements, specifies the amount of the assistance payment and the manner in which the payment may be adjusted periodically. Nearly all existing Kin–GAP cases either meet, or could meet, these requirements.

New Guardianship Program To Obtain Federal Funds

We recommend the Legislature take steps in the current year to create a new guardianship program that enables the drawdown of federal funds for new guardianship cases, as well as for existing Kin–GAP cases. To obtain federal funding, the Legislature must create a new guardianship program which meets federal requirements. Once established, the state may enroll new relative guardian cases directly into this new program and receive federal funding for eligible cases.

What About Existing Kin–GAP Cases? One of the key issues raised by the new federal act is whether FFP is available only prospectively or for existing Kin–GAP cases as well. We believe the language allows for states to receive FFP for existing Kin–GAP cases once certain conditions are satisfied. The U.S. Administration for Children and Families, however, recently released a Program Instruction on the act’s guardianship provision containing some statements that suggest otherwise. The Program Instruction is meant to provide guidance to the states in advance of final regulations. If the Program Instruction and statutes are interpreted in a restrictive manner, the state may have to move existing Kin–GAP cases back into Foster Care for a brief period, and then move them to the new guardianship program, to receive FFP for these cases. A less restrictive interpretation of the act and the instruction suggests an easier process may be available in which existing Kin–GAP providers sign new negotiated agreements in order for the state to qualify these cases for FFP.

As we await additional clarification from the new federal administration on the act’s guardianship provision, we believe the state can position itself to take either approach described above in order to draw down federal funds for existing Kin–GAP cases. We note that both approaches would result in new administrative costs. We describe both approaches in more detail below.

Permissive Federal Approach: Signing a New Agreement. If the federal government allows a more permissive approach, the state may move existing Kin–GAP providers into the new guardianship program by signing a new negotiated agreement that meets federal requirements. This approach would result in new administrative costs for county social workers to negotiate the new agreement with guardians. These negotiations would occur at annually scheduled meetings conducted by social workers with guardianship families to redetermine their eligibility for the program.

Restrictive Federal Approach: Converting Existing Kin–GAP Cases Through Foster Care. With respect to the more restrictive interpretation, the state may have to end existing guardianships and ask the court to resume dependency using a technical procedure allowable under Welfare and Institutions Code Section 388. This means that for an existing Kin–GAP case, the child would technically return to Foster Care but continue living with his/her relative caregiver. The relative caregiver would continue to receive assistance payments through the Foster Care program, which can be supported through federal Title IV–E funds for eligible cases. Once a new guardianship agreement is negotiated with the relative caregiver, the child could then exit Foster Care for guardianship under the new program with FFP.

The approach outlined above would require legislation to streamline the process and to minimize court costs and the potential imposition on guardians. Even after streamlining the process, however, there would be new administrative costs for county social workers to inform existing Kin–GAP providers of this change in policy, process any paperwork necessary for the court, and negotiate a new guardianship agreement with the relative caregiver. We note that the cost to the state of reimbursing counties for these additional administrative costs would likely be more than offset by the benefit to the state General Fund from qualifying these cases for FFP.

We also note that further guidance from the federal government could result in an approach that is a hybrid of the two described above. Federal clarification will help guide the Legislature in creating the new guardianship program. In any event, below we provide preliminary estimates on the fiscal impact of a new guardianship program with FFP.

Estimated Fiscal Impact

Depending on which approach the state takes to making existing Kin–GAP cases eligible for FFP, we estimate General Fund savings ranging from about about $31.3 million to $36.9 million in 2009–10. As shown in Figure 14, we attribute the major difference in savings from the two approaches largely to one–time administrative costs. These estimates assume that legislation is enacted in the current year to create a new guardianship program and develop a process to convert existing Kin–GAP cases, with implementation beginning on July 1, 2009, and phasing in over a 12–month period. Generally, these would be ongoing savings. For 2010–11, we estimate full–year General Fund savings of about $70 million.

Issues for Legislative Consideration

There are several other implementation issues for the Legislature to consider. We highlight two issues with particular fiscal impacts below.

Implementation Time Frame. If the less restrictive approach described above of moving existing Kin–GAP cases to the new guardianship program with FFP is viable, the Legislature may wish to expedite the process of shifting cases over, thus accomplishing it in a shorter period than the 12 months we assumed in our estimates. While this would increase upfront administrative costs, the state and counties would realize increased savings due to the shorter time frame.

Negotiation Requirement. As previously described, under existing law, Kin–GAP payments are set at the rate that the child received while in Foster Care. There is no negotiation process and the overall payment is not modified to reflect changes in the needs of the child. The federal requirement, however, indicates that the guardianship agreement should be adjusted periodically as the needs of the child and circumstances of the guardian change. Depending on how often the state adjusts payments and by what criteria, the average Kin–GAP payment may increase or decrease, which would impact the level of General Fund savings.