Level 3 foster care requirements and pay vary by state, but the shape is consistent: caregivers need prior foster or professional experience, 40 to 60 hours of specialized pre-service training, a clean background check, and a full home study, and in return they receive a daily per-diem that commonly runs from about $60 to $150 or more, most of which is excluded from federal income tax.
Level 3 sits in the upper range of most state tiered systems and is often called therapeutic or treatment foster care. The children placed at this level have complex trauma histories, clinical diagnoses, serious behavioral challenges, or chronic medical conditions that a standard foster home isn’t equipped to manage. The requirements and the pay both scale accordingly.
Who Qualifies to Become a Level 3 Caregiver
States set their own thresholds, but the common requirement is that you demonstrate competence well beyond basic parenting before taking a high-needs placement. Ohio’s rules illustrate the typical approach. An applicant needs at least one of the following: a year of caring for a foster child, 60 hours of classroom training on children with special needs, five years of experience caring for a child in your own home, or a year of experience specifically with a child who has special needs.
Licensed professionals often meet the standard through their credentials. Social workers, counselors, teachers, and psychologists can generally qualify on the strength of their license and relevant work history. If you are coming in without that background, plan on documenting your caregiving experience in detail and completing the specialized training before applying.
The role itself is different from standard fostering. Level 3 caregivers function as members of a professional treatment team. That means weekly or biweekly meetings with therapists, case managers, and medical providers; detailed logs of behavioral incidents, medications, and appointments; and appearances at court hearings to update judges on the child’s status. You are expected to help run the clinical plan inside your home, not simply host it.
Training Requirements
Pre-service training for Level 3 caregivers typically runs 40 to 60 hours and covers trauma-informed care, de-escalation, crisis intervention, and the neurological effects of childhood trauma. Some agencies use specific curricula such as Therapeutic Crisis Intervention or Trust-Based Relational Intervention. This is substantially more than the general orientation standard foster parents receive.
Training doesn’t stop at certification. States mandate annual continuing education hours, and treatment foster care agencies often add their own requirements on top. The content shifts with the child in your home. If a placement develops new behavioral patterns, you may be asked to complete supplemental training in that area before continuing.
Background Checks and Documentation
Federal law sets the floor. Under the Adam Walsh Child Protection and Safety Act, every state must complete fingerprint-based checks of national crime databases before any foster parent is finally approved. Certain felony convictions are permanent disqualifiers: child abuse or neglect, crimes against children, sexual assault, and homicide. Felony convictions for physical assault, battery, or drug offenses within the past five years also block approval.
States must also check their own child abuse and neglect registry and request registry checks from every other state where you or any other adult in the household has lived during the previous five years. Those checks apply to every adult in the home, not just the prospective caregiver.
Your documentation package will typically include a comprehensive medical evaluation for every adult in the household, financial statements showing you can support your family without relying on foster care payments for basic expenses, proof of homeowner’s or renter’s insurance, personal references, and a detailed personal history. Forms come from your local licensing agency, and many states now use an online portal.
The Home Study and Certification Timeline
Once your paperwork is in, a licensing worker schedules home study interviews. Virginia requires at least three face-to-face interviews on separate days, and most states follow a similar pattern. These are in-depth conversations about family history, parenting approach, relationship dynamics, and your specific capacity to handle Level 3 behaviors.
Expect a physical inspection of your home. The worker will check locked medication storage, working smoke detectors, fire extinguisher placement, water heater temperature, bedroom space, and general safety. Children generally need their own bed in a room meeting minimum square footage: typically around 70 square feet for a single-occupancy room, and about 60 square feet per child in a shared room.
The completed file goes to a licensing supervisor or committee for formal review. Once approved, the agency issues a certificate specifying how many children you can care for and what age range is authorized. Your status is activated in the state’s foster care database and treatment foster care network. From initial application to active certification, the process commonly takes several months.
If You’re Denied
If your application is denied, or an existing license is revoked, you generally have a right to a formal administrative hearing. The agency must notify you in writing of the specific reasons. You typically have 30 calendar days from the date of that notice to file an appeal, though the exact deadline varies by state. The agency cannot finalize the denial or revocation in its records until the appeal window closes or the hearing upholds the decision. If the problem is an inaccurate background check, the hearing is where you present correcting evidence.
What Level 3 Foster Care Pays
The daily per-diem for Level 3 care is substantially higher than standard foster care, and the exact amount varies by state and by the intensity of the specific child’s needs. Published state rate schedules show basic foster care paying under $30 per day, while specialized or treatment-level placements commonly range from roughly $60 per day up to $150 or more per day through a child-placing agency. Some states set rates higher still for the most intensive placements. These rates are designed to cover room, board, clothing, and the additional supervision and care high-needs children require.
Payment frequency and method vary. Some states pay biweekly, others monthly. Most have moved to direct deposit, though electronic benefit cards and paper checks still exist in some jurisdictions.
Beyond the daily rate, most states provide additional allowances. Initial clothing allowances when a child first arrives are common and typically scale with age. Separate reimbursement for transportation to medical and therapeutic appointments is available in many states, often tied to the federal mileage rate.
Tax Treatment of the Payments
Foster care payments receive favorable federal tax treatment. Section 131 of the Internal Revenue Code excludes qualified foster care payments from gross income entirely. The exclusion also covers “difficulty of care” payments, meaning the additional compensation paid because a child has a physical, mental, or emotional condition requiring extra care. For Level 3 caregivers this matters directly: the higher per-diem rates for therapeutic placements generally qualify as difficulty of care payments.
The exclusion has caps based on how many foster individuals you are caring for. Difficulty of care payments can be excluded for up to 10 foster children under age 19 and up to 5 who are 19 or older. For standard (non-difficulty-of-care) payments, the cap is 5 individuals who have reached age 19. These limits rarely affect Level 3 homes in practice, since most serve far fewer children than the cap allows. The IRS also treats certain Medicaid waiver payments for home and community-based care as excludable difficulty of care payments under the same provision.
Ongoing Support You Can Draw On
Children in Level 3 placements are almost always enrolled in Medicaid, which triggers the Early and Periodic Screening, Diagnostic, and Treatment benefit. EPSDT requires states to provide any medically necessary service to children under 21, including behavioral health treatment, therapy, psychiatric services, and substance use disorder treatment, even if the state Medicaid plan doesn’t explicitly list that service. If a screening identifies a condition, the state must treat it. This is a strong entitlement, and it means you can push for services without being told the state doesn’t cover them.
Respite care is the other support that keeps Level 3 placements from collapsing. Burnout is one of the leading reasons therapeutic foster parents leave the system. Most states offer a set number of overnight and daytime respite days per fiscal year, paid at the child’s existing per-diem rate, with another approved caregiver temporarily taking over. Respite requires prior caseworker approval and must use an approved provider. If your agency doesn’t offer it proactively, ask.
A child’s level is also not fixed. Periodic reassessments, typically every six months or after a significant event like a psychiatric hospitalization or placement disruption, can move a child up or down a tier. A change in level changes the daily rate, the training expectations, and sometimes the placement itself. If you disagree with a proposed level change, document what you see day to day and raise it at the team meeting; the caregiver usually has the clearest view of what the child actually needs.