Foster care levels of care are tiered classifications that match a child’s medical, behavioral, and emotional needs to a corresponding payment rate. The base tier covers routine supervision; each step up adds a difficulty of care supplement for children whose needs demand more time, training, or clinical coordination. Federal law sets the framework, but each state builds its own tier structure, assessment process, and dollar amounts, so identical children can be classified and paid differently depending on where they live.
What the Monthly Payment Is Meant to Cover
Federal law defines foster care maintenance payments as funds for food, clothing, shelter, daily supervision, school supplies, the child’s personal incidentals, liability insurance for the child, reasonable travel for family visitation, and reasonable travel to keep the child in the same school after placement.1Office of the Law Revision Counsel. 42 USC 675 – Definitions That list is the floor. States often add supplemental clothing allowances at the start of a placement, mileage reimbursement for medical appointments or court hearings, and respite funding, usually handled through separate vouchers rather than folded into the monthly check.
The payment is not a salary. Federal policy states plainly that maintenance payments are not meant to reimburse foster parents for ordinary parental duties.2Administration for Children & Families. Child Welfare Policy Manual – 8.3B.1 TITLE IV-E, Foster Care Maintenance Payments Program, Payments, Allowable Costs It offsets the tangible costs of having a child in your home. That framing is why base rates alone often feel thin, and why the tier system exists at all.
How a Child Gets Assigned to a Level
Every child entering care is assessed across several domains, including behavioral health, medical complexity, trauma history, substance exposure, and daily functioning. The resulting score sets the level of care, which sets the payment tier. Most states use between three and five levels.
The Assessment Tools
The Child and Adolescent Needs and Strengths assessment is the most widely used instrument. It scores problem severity, risk behaviors, functioning, and caregiver capacity, and those scores can be tracked over time to justify moving a child up or down a level. Other tools in use include the Child and Adolescent Functional Assessment Scale, the Child and Adolescent Service Intensity Instrument, and the Child Behavior Checklist. Some states combine tools or use proprietary ones. The purpose is the same across all of them: turn a child’s lived experience into a standardized score.
What the Tiers Usually Look Like
State labels differ, but the pattern is fairly consistent:
- Basic or Level 1 covers children with age-appropriate behaviors and no significant medical or developmental conditions. Routine supervision, standard parenting. Most children entering care start here.
- Moderate or Level 2 covers children with diagnosed conditions like ADHD, mild learning disabilities, or emotional trauma showing up as anxiety, defiance, or trouble at school. Caregivers attend more frequent team meetings and often implement specific behavioral strategies at home.
- Specialized or Level 3 covers children with multiple diagnoses, histories of placement disruption, or behavioral patterns requiring constant redirection. Coordination with therapists, psychiatrists, and school support teams is typically weekly.
- Intensive or Treatment Foster Care is for children with serious emotional, behavioral, or medical needs who might otherwise be in a residential facility. It is a treatment-focused model delivered by specially trained caregivers in a family setting, and includes youth with severe aggression, self-harm, medical fragility, or those stepping down from psychiatric hospitalization.3Office of the Assistant Secretary for Planning and Evaluation. Treatment Foster Care – Family-Based Care for Children with Severe Needs
Levels are not fixed. A child who stabilizes after six months of therapy can move down; a child whose underlying trauma surfaces later can move up.
How the Rate Tiers Build
Each level of care corresponds to a payment tier with two components: a base maintenance rate and, for higher levels, a difficulty of care addition layered on top.
The Base Rate
Base rates draw on U.S. Department of Agriculture research on the cost of raising a child, which state and local governments use to inform payment levels.4United States Department of Agriculture. The Cost of Raising a Child Rates are calculated as a daily per diem but usually paid out monthly. Actual dollar amounts vary sharply by state. Base rates for a school-aged child can range from under $200 to over $1,200 per month, with most falling somewhere in the middle.
Rates also step up with age. Teenagers cost more to feed, clothe, and transport than toddlers, and most state schedules reflect this with higher per-diem amounts for older brackets. Common breakpoints land around ages 5 to 6, 12 to 13, and again at independent-living age.
The Difficulty of Care Addition
Above the base rate, children at higher levels receive difficulty of care payments. These are supplemental amounts recognizing the extra time, specialized skills, and emotional labor a child’s medical or behavioral profile requires. Federal tax law defines them specifically as compensation for the additional care required by a child’s physical, mental, or emotional condition.5Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments The addition grows at each tier, and at treatment foster care levels the combined payment can be several times the base rate.
How Often Rates Change
Federal law requires states to periodically review maintenance payment amounts to ensure their continuing appropriateness.6Office of the Law Revision Counsel. 42 USC 671 – State Plan for Foster Care and Adoption Assistance In practice, state legislatures or child welfare agencies revisit rates on their own schedules, often with cost-of-living adjustments. Foster parent advocates frequently argue those adjustments lag actual inflation.
Kinship Caregivers Are Now Entitled to the Same Rate
Many states used to pay relative caregivers less than non-relative foster parents, or nothing at all if the relative was not formally licensed. A 2023 federal rule ended that. Under 45 CFR 1356.21(m)(1), states must ensure the amount paid to a licensed or approved relative or kinship foster home is the same as the amount that would have been paid if the child were placed with a non-relative foster family.7Federal Register. Separate Licensing or Approval Standards for Relative or Kinship Foster Family Homes The rule also lets states adopt kin-specific licensing standards that differ from non-relative standards, making it easier for grandparents, aunts, uncles, and other relatives to get licensed and receive full payment. If you are a relative caregiver being paid a lower rate than a stranger would receive, this rule may entitle you to parity.
How the Payments Are Taxed
Qualified foster care payments, including both base maintenance and difficulty of care amounts, are excluded from gross income under federal tax law. You do not owe income tax on them and do not report them as earnings.5Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments The exclusion applies to payments from a state, political subdivision, or qualified foster care placement agency for caring for a qualified foster individual in your home.
The exclusion has caps. For standard foster care payments covering foster individuals who have reached age 19, it applies to payments for no more than five individuals in your home. For difficulty of care payments, the exclusion covers up to 10 qualified foster individuals under age 19 and up to 5 who are 19 or older.5Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments For families caring for one to three children, these caps will not come into play.
Separately, a foster child placed with you by a state agency, tribal government, tax-exempt licensed organization, or court order can qualify as your dependent for the Earned Income Tax Credit, Child Tax Credit, and head of household filing status, if the child meets the residency and relationship tests.8Internal Revenue Service. Qualifying Child Rules The maintenance payments stay untaxed, and the credits can still reduce your overall tax bill.
Getting a Higher Level Assigned
If the initial assessment did not capture the full picture, or a child’s needs change after placement, you can request a rate adjustment. The strength of that request comes down to documentation. Agencies do not raise a tier on your word alone.
What to Gather
- Recent medical and psychological evaluations from licensed professionals, showing diagnoses, treatment plans, and medications. Current matters here; a two-year-old evaluation carries less weight than one from the last six months.
- Behavioral logs recording the frequency, intensity, and duration of specific incidents such as emotional outbursts, physical aggression, self-harm, nighttime disruptions, or medical treatments you administered. Vague notes like “bad day” are useless. An entry like “45-minute meltdown at 3 PM triggered by phone call with bio parent, required physical intervention to prevent head-banging” is what reviewers need.
- School records: IEPs, behavioral intervention plans, suspension notices, teacher reports.
- Intervention time logs showing how much time each day goes to specialized tasks beyond normal parenting, such as administering medications, running therapeutic exercises, or transporting to multiple weekly appointments.
The formal assessment is usually completed by a caseworker or clinician, but your documentation feeds directly into the score. Thin documentation produces lower scores and lower tiers even when the child’s actual needs are high.
Submitting the Request
Send your documentation packet to your caseworker or the designated administrative office. Most jurisdictions have an online portal for uploading straight to the child’s digital file. If not, use certified mail so you have a delivery date. Processing typically takes 30 to 60 days. Stay in contact with your caseworker during that window; they carry your case to the review committee.
The agency issues a written decision with an effective date. Approved adjustments usually take effect at the next billing cycle, and some states allow retroactive payment back to the request date. A denial notice must explain the reasons and inform you of your appeal rights.
The Fair Hearing
Federal law guarantees a fair hearing to anyone whose claim for benefits under Title IV-E is denied or not acted upon with reasonable promptness.6Office of the Law Revision Counsel. 42 USC 671 – State Plan for Foster Care and Adoption Assistance The hearing procedures used for other public assistance programs apply to Title IV-E, so you must be notified of your right to a hearing, told the date and place, and allowed to bring a representative.9Administration for Children & Families. Child Welfare Policy Manual – 8.4G TITLE IV-E, General Title IV-E Requirements, Fair Hearings
The window to request a hearing after a denial varies by state, generally 15 to 90 days, so read the denial notice carefully. An attorney is optional at the administrative level; you can also bring a spouse, friend, or advocate. At the hearing you present your evidence opposite the agency’s representative and argue why the record supports a higher tier. Written decisions typically arrive one to three months later. If the outcome goes against you, most states offer a further appeal to a higher administrative body or a court, and the denial notice should spell out the next steps. Detailed behavioral logs and current clinical evaluations overturn administrative decisions more often than most foster parents expect.