Foster Care Payments

On December 3, 2013, a class action lawsuit was filed against the Head of the Hawai`i Department of Human Services (DHS) for violating federal law by failing to pay foster parents enough to adequately care for the foster children in their homes. Long-time foster parent Raynette Nalani Ah Chong filed the suit on behalf of more than 1000 foster parents in the state who have been short-changed because the state has failed to increase the payments since 1990. The federal Child Welfare Act requires that reimbursements cover the expenses of children in foster care, but the $529 per month payment — set by the state nearly a quarter century ago — does not come close. Had the payment been adjusted for inflation, it would be over $950. Hawai‘i Appleseed Center for Law and Economic Justice has teamed up with local law firm Alston Hunt Floyd & Ing, and global law firm Morrison & Foerster LLP to bring the case.

Inadequacy of the Payments

According to federal law, DHS—the state agency responsible for the foster care program—is required to pay a “maintenance payment” to care providers that covers the cost of nearly all of a foster child’s needs. In the words of the statute, the payment should cover “cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child, and reasonable travel to the child's home for visitation.” 42 U.S.C. § 675(4)(A).

DHS provides an even more detailed list of what they expect the $529 monthly maintenance payments to cover:

  • Food
  • Shelter and utilities
  • Use of household furnishings and supplies
  • Expenses involved in household operations
  • Personal essentials, such as but not limited to toothpaste, soap, comb, haircuts, sanitary supplies, replacement of milk bottles and nipples, disposable diapers
  • Reading and educational supplies, including school supplies
  • Recreation and community activities for the children, such as but not limited to parties, picnics, church money, movies, and excursions
  • Transportation expenses for the foster parent to shop for the foster child or deliver the child to school events, church or other recreational activities;
  • Non-prescribed medication such as aspirin and cough syrup or first-aid materials such as bandages
  • Allowances
  • Babysitting expense incurred by foster parents for their own recreational purposes
  • Other requirements for infant care, including such “basic sub-items” as vitamins generally recommended by doctors for children up to five years of age. (Hawai‘i Administrative Rule §17-1617-3)

It is abundantly clear that $529 does not cover anywhere near all of these costs.

  • A 2007 studyHitting the M.A.R.C.: Establishing Foster Care Minimum Adequate Rates for Children—found that as of at least six years ago, Hawai‘i’s maintenance payment rate for teenagers was more than 49% below what would be required to cover the nationwide average costs of providing care for children. DHS’s current payments are grossly inadequate even using 2007 dollars and national average costs.
  • In a 2012 report, the United States Department of Agriculture estimated that middle-income families spend between $1059 and $1225 per month on each child—a nationwide average that is more than twice as high as the maintenance payment rate even though it doesn’t even account for the fact that Hawai‘i has the highest cost of living in the country.
  • Hawai‘i is one of the stingiest states in the nation in terms of taking care of foster children according to a 2013 report surveying the maintenance payment rates of each state. For example, Tennessee, which has the second lowest cost of living in the county, provides foster families with almost $300 more a month than families in Hawai‘i are provided.
  • Dog kennels in Hawai‘i charge twice as much as the $17 a day DHS provides for the care of foster children.

DHS’s History of Opposing an Increase

DHS is currently responsible for setting the amount of the foster care payment and it has the authority to increase the payment on its own. In fact, under its own rules DHS is supposed to review the payment at least every five years “to assure its continued appropriateness” (Hawai‘i Administrative Rule § 17-1617-22). Hawai‘i Appleseed sent multiple public records requests for information about the reviews, but DHS never responded.

Since DHS has not adjusted the payment amount on its own, people have turned to the Hawai‘i Legislature for help. Requests to raise the inadequate foster care payments have been under consideration by the Hawai‘i Legislature since 2009. DHS has repeatedly opposed an increase, suggesting it would cost too much to provide even a $100 increase—an amount that would still be grossly inadequate. DHS has stood alone in its opposition; every other person or organization that submitted testimony regarding the bills has supported their passage. Although the inadequacy of the payments has been apparent for years, during the 2013 legislative session, DHS claimed that it needed additional time to “further assess the feasibility of adjustments” to the payments.

Links to information about each of the bills, all of which DHS successfully defeated, are included below along with samples of DHS’s testimony.

Those supporting an increase have submitted testimony regarding the pressing need to adjust the foster care payments to cover the true costs of providing appropriate care to foster children. One foster care provider explained how DHS had initially assured her that it would provide appropriate financial support for the children placed in her home, but ultimately she had to stop caring for infants and newborns in foster care because of the out-of-pocket costs. Others have pointed out that while the maintenance payment has not increased, the burdens placed on foster parents have grown. For example, while DHS used to provide transportation to facilitate visits between foster children and their biological parents, it is now up to the foster parent to take children to the visits, which often means taking time off work. Despite having been made aware of these hardships and problems years ago, DHS has not adjusted the payment amount to cover the actual costs of providing care.

The Law Behind the Lawsuit

The lawsuit against DHS is based on a federal law known as the Child Welfare Act. Under the Act, the federal government gives significant funding to DHS to help cover the cost of running the foster care system. As a condition of receiving the federal money, DHS is required to ensure that foster parents receive maintenance payments that are sufficient to cover the costs of caring for the foster children in their homes. In the eyes of the law, all that matters is whether the payments are sufficient to cover the spectrum of costs identified in the Act; DHS’s claim that it thinks it costs too much to increase the payment is irrelevant if it wants to continue to receive federal funding assistance.

Foster parents in California won a major victory in federal court on the same issue, forcing the state of California to substantially increase its reimbursement rates in 2011 to a range between $609 and $761 depending on the age of the child—amounts significantly higher than Hawai‘i's current rate in spite of Hawai‘i's higher cost of living. The California case, California State Foster Parent Association v. Wagner, was appealed to the U.S. Court of Appeals for the Ninth Circuit, which found for the foster parents. One of the law firms that advocated for those parents, Morrison Foerster, is serving as co-counsel for Hawai‘i’s foster parents. Additional information about the California case can be found here: http://www.caichildlaw.org/fc_litig.htm.

Press Releases

State of Hawaii Sued for Short-Changing Foster Parents and Children
Honolulu, HI - A federal class-action lawsuit challenges the state’s persistent refusal to cover the real costs of caring for some of Hawaii’s most disadvantaged and troubled children. Click here to read more.

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