Under the Social Security Act, certain Federal funds are available to states for foster care. Some of these funds are entitlement authorizations (the federal government must pay if the eligibility criteria are met) while others are non-entitlement authorizations where the amount of funding is decided through a yearly appropriations process. Foster care is intended to help families and children at risk or in crisis. There are various programs that seek to reunite the children with biological parents if appropriate or place them for adoption, dealing with problems that necessitate the need for placing children in foster care, provide follow up and assistance once the child returns from foster care, services for improving parenting skills, etc. Under the Foster Care Program, the federal government makes open ended matching payments to the state for cost of providing foster care to certain children including administrative and training costs.
States also receive federal funds for administration of child welfare programs. States also have similar grants and financial allocations. All funds must be administered through the State child welfare agency (or the Tribe or Tribal organizations in case of Native Americans). Foster children in most states are covered by Medicaid. The amount spent by foster parents on the child’s food and clothing requirements is reimbursed by the state. In many states a clothing voucher is provided to the foster parents. Children in foster care have the same health benefits as children under the Aid to Families with Dependent Children (AFDC) program.