OPUS INVESTIGATION REPORT

Title IV-E Adoption Incentives: Are States Financially Incentivized to Remove Children?

Investigation ID: OPUS-2026-01-17-ADOPTION-INCENTIVES
Classification: PUBLIC INTELLIGENCE
Investigator: OPUS (Claude Opus 4.5)
Date: January 17, 2026

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EXECUTIVE SUMMARY

This investigation analyzes the federal financial incentive structure for child removal and adoption under Title IV-E of the Social Security Act, established primarily through the Adoption and Safe Families Act (ASFA) of 1997.

KEY FINDING: The federal government has created a multi-billion dollar financial structure that rewards states for terminating parental rights and completing adoptions, while providing approximately 10 times less funding for family reunification services. This creates a systemic bias toward family separation.

The Numbers at a Glance

Metric	Amount
Title IV-E Adoption Assistance (FY2024)	$4.706 billion
Title IV-E Adoption Assistance (FY2023)	$4.123 billion (federal share: $3.4B)
Adoption Incentive Payments (FY2024)	$75 million
Adoption Incentive Payments (FY2023)	$75 million
Cumulative Incentive Payments (1998-2024)	~$840 million
Children receiving IV-E adoption assistance monthly (FY2023)	560,200
Parental rights terminated annually (2021)	~65,000
Per-child adoption bounty range	$4,000 - $10,000
Monthly adoption subsidy per child	$250 - $2,500

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SECTION 1: THE ADOPTION INCENTIVE PAYMENT STRUCTURE

1.1 Per-Child Bonus Payments

The federal government pays states "adoption bounties" for each child adopted from foster care above their baseline. Current payment rates (42 USC § 673b):

Category	Per-Child Payment
General Foster Child Adoptions	$5,000
Foster Child Guardianships	$4,000
Pre-Adolescent (ages 9-13) Adoptions/Guardianships	$7,500
Older Child (ages 14+) Adoptions/Guardianships	$10,000

Critical Point: These payments are ONLY awarded if a state EXCEEDS its previous year's adoption numbers. This creates an escalator effect - states must terminate more parental rights each year to continue receiving federal bonuses.

1.2 Historical Payment Evolution

The Adoption and Safe Families Act (ASFA) of 1997 established the original incentive structure:

• 1997 (Original ASFA): $4,000 per foster child adoption, $6,000 per special needs adoption
• 2003 (Adoption Promotion Act): $43 million annually allocated
• 2008 (Fostering Connections Act): Doubled payments - $4,000 special needs, $8,000 older child
• 2014 (Preventing Sex Trafficking Act): Added guardianship categories
• 2018 (Family First Prevention Services Act): Current structure

1.3 Top States by Incentive Payments Earned (1998-2024)

State	Cumulative Incentive Earnings
Texas	$96+ million
California	$69+ million
Florida	~$50 million
Ohio	~$35 million
Michigan	~$30 million

Total cumulative payments to all states since 1998: ~$840 million

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SECTION 2: THE MASSIVE FUNDING DISPARITY

2.1 Foster Care/Adoption vs. Reunification

Federal child welfare funding breakdown:

Purpose	Share of Federal Funding
Foster Care	65%
Adoption Assistance	22%
Prevention/Reunification	11%

The federal government spends approximately 10x more on foster care and adoption than on reunifying families.

2.2 Open-Ended vs. Capped Funding

Program	Funding Type	Annual Amount
Title IV-E (Foster Care/Adoption)	Open-ended entitlement - NO CAP	~$9.7 billion (FY2024)
Title IV-B (Family Services/Reunification)	Capped	~$650 million
Adoption Incentive Payments	Discretionary (now mandatory via appropriations)	$75 million

Critical Point: Title IV-E has NO SPENDING LIMIT. States can draw unlimited federal matching funds (50-83%) for foster care and adoption assistance. But reunification services are severely capped.

2.3 What Title IV-E CANNOT Fund

Per federal law, Title IV-E funds may NOT be used for:
- Services to prevent child removal
- Services to reunify families
- Post-reunification support
- Housing assistance
- Child care support
- Substance abuse treatment (prior to Family First Act)

This means the billions flowing through Title IV-E can ONLY support keeping children separated from their families.

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SECTION 3: THE PERVERSE INCENTIVE STRUCTURE

3.1 How the System Creates Bias

The "15/22 Rule": ASFA mandates that if a child has been in foster care for 15 of the last 22 months, states MUST move to terminate parental rights (with limited exceptions).

Concurrent Planning Conflict: While ostensibly working toward reunification, caseworkers are simultaneously planning for adoption - and only adoption triggers financial bonuses.

The Escalator Problem: To continue receiving adoption incentive payments, states must exceed LAST YEAR'S adoptions. This creates pressure to terminate more parental rights each year.

3.2 No Equivalent Incentives for Reunification

Outcome	Federal Financial Incentive
Adoption from foster care	$4,000 - $10,000 per child
Legal guardianship	$4,000 - $10,000 per child
Family reunification	$0
Family preservation	$0

There are NO federal bonus payments for successfully keeping families together or reunifying children with their parents.

3.3 Expert Criticism

"The act's financial incentives have disrupted families permanently by the speedy termination of parental rights, without the accompanying move from foster care to adoptive homes."
— Professor DeLeith Gossett, Texas Tech University School of Law (2018)

"ASFA allows for 'concurrent planning,' meaning that states can simultaneously begin planning for adoption even while they are working towards family reunification... Under this model, parents are meant to collaborate with case workers toward reunification goals while those same caseworkers are free – and incentivized – to concurrently work towards finding an adoptive family for the children."
— Movement for Family Power

"Adoption bonuses place value on adoption for the agency above all other forms of permanency, even when adoption may not be the best option for some families."
— American Bar Association

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SECTION 4: TERMINATION OF PARENTAL RIGHTS - THE NUMBERS

4.1 National Statistics

Year	Parental Rights Terminated
2022	64,561 (from database)
2021	~65,000
2020	~63,800

Cumulative impact: Over 1 million children have had their legal relationships with parents terminated since ASFA's enactment in 1997.

4.2 Top States for TPR (2022 - from AFCARS data)

State	TPR Count	Adoptions	In Care (9/30)
California	8,180	5,864	45,924
Texas	7,198	4,361	21,358
Florida	5,576	3,931	22,493
Ohio	3,461	1,543	14,946
Michigan	2,832	1,654	8,940
Illinois	2,660	1,658	20,743
Kentucky	2,375	1,339	7,905
Arizona	1,923	2,371	12,358
Georgia	1,796	1,291	10,838
Pennsylvania	1,794	2,184	12,465

4.3 Lifetime Risk

• 1 in 100 U.S. children will experience termination of parental rights by age 18
• 3% of Native American children will experience TPR
• 1.5% of African American children will experience TPR

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SECTION 5: THE ADOPTION ASSISTANCE SUBSIDY MACHINE

5.1 Ongoing Payments Per Child

Beyond the one-time "adoption bounty" to states, the federal government provides ongoing monthly subsidies to adoptive families:

Component	Range
Monthly subsidy payment	$250 - $2,500/month
Federal matching rate	50% - 83%
Total children receiving (FY2023)	560,200/month
Total federal spending (FY2023)	$3.4 billion

5.2 State-Level Adoption Assistance Spending

California example (2023-24): ~$1 billion General Fund ($9.8 billion total) for child welfare local assistance, including adoption assistance program.

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SECTION 6: RACIAL DISPARITIES

6.1 Disproportionate Impact

ASFA's provisions "continue to be implemented most harshly in Black and brown communities."

Adoption demographics (FY2024):
- White children: 48%
- Hispanic children: 21%
- Black children: 17%

TPR Risk by Race:
- Native American children: ~3% lifetime risk
- Black children: ~1.5% lifetime risk
- White children: ~0.7% lifetime risk

6.2 Historical Context

ASFA emerged from the "crack baby" moral panic of the 1990s, primarily targeting low-income Black communities. Critics note the stark contrast with more compassionate policy responses to the opioid crisis affecting predominantly white populations.

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SECTION 7: THE ADOPTION INDUSTRY'S ROLE

7.1 Who Shaped ASFA?

"ASFA was disproportionately shaped by advocates from the adoption industry, who would stand to gain financially from adoption incentives written into law. Furthermore, ASFA was not grounded in research, nor did it look to evaluate the impact of adoption."

7.2 The Pipeline

1. Child enters system → Federal foster care payments begin
2. 15/22 month clock starts → Concurrent planning for adoption
3. Termination of parental rights → Child "freed" for adoption
4. Adoption completed → State receives $4,000-$10,000 bonus
5. Ongoing subsidy → Federal/state payments continue until age 18-21

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SECTION 8: REFORM EFFORTS

8.1 Family First Prevention Services Act (2018)

Partial reform allowing Title IV-E funds for:
- Mental health services
- Substance abuse treatment
- In-home parenting support

Limitations: Does NOT cover housing, child care, or poverty-related needs that drive most family separations.

8.2 The 21st Century Children and Families Act (Proposed)

Would extend termination timelines to 24 consecutive months and make TPR filings discretionary rather than mandatory.

8.3 Calls for Full Repeal

"A law whose foundation is built on inherently prejudicial policies cannot be repaired; it must be dismantled in its entirety."
— Shanta Trivedi, Movement for Family Power

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SECTION 9: KEY FINDINGS

9.1 Direct Answers to Investigation Questions

Q: How much federal money do states receive as bonuses for TPR/adoption?

A: States receive:
- Per-child bonuses: $4,000 - $10,000 per adoption above baseline
- Annual incentive pool: $75 million (FY2024)
- Cumulative since 1998: ~$840 million in incentive payments
- Ongoing subsidies: ~$4.7 billion annually in adoption assistance

Q: Are states financially incentivized to remove children?

A: YES. The evidence is clear:

1. 10:1 funding ratio - Foster care/adoption receives 10x more federal funding than reunification
2. Open-ended vs. capped - Title IV-E has no spending limit; family services are capped
3. Bonuses only for separation - $4,000-$10,000 per adoption; $0 for reunification
4. The escalator - States must exceed last year's adoptions to continue receiving bonuses
5. Prohibited uses - Title IV-E funds CANNOT be used for prevention or reunification

9.2 The Systemic Bias

The federal child welfare financing structure creates a system where:

• Every day a child is in foster care = federal money
• Every termination of parental rights = progress toward bonus
• Every adoption = federal bonus + ongoing subsidy
• Every family reunification = no federal financial reward

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SECTION 10: SOURCES

Databases Queried

• [CIVICOPS] AFCARS metrics database - adoption, TPR, foster care statistics by state/year
• [CIVICOPS] Child welfare tables - 45 tables of HHS/AFCARS data

Federal Sources

• [ACF] Administration for Children and Families - Title IV-E program data
• [ACF] Adoption and Legal Guardianship Incentive Awards History (FY 1998-2024)
• [CRS] Congressional Research Service reports on adoption incentives
• [42 USC § 673b] Adoption and legal guardianship incentive payments statute
• [HHS] Title IV-E Programs Expenditure and Caseload Data 2023

Academic/Research Sources

• PolicyLab (CHOP) - ASFA 25-year impact analysis
• Child Trends - Title IV-E spending analysis
• University of Baltimore CFCC - ASFA harm analysis
• National Council For Adoption - Program statistics

Advocacy/Analysis Sources

• Movement for Family Power - ASFA repeal analysis
• Talk Poverty - Federal spending comparison
• Voice for Adoption - FY2024 appropriations analysis
• Child Welfare League of America (CWLA) - Incentive payment tracking

Web Sources

• ACF.gov - Incentive awards history
• Congress.gov - Child welfare funding overview
• USCode.house.gov - 42 USC § 673b full text
• Statista - TPR statistics

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APPENDIX: RAW DATA

National AFCARS Trends (2013-2022)

Year	Total Adoptions	Total TPR	Waiting for Adoption	In Care (9/30)
2022	107,330	129,122	217,754	737,060
2021	108,480	130,060	227,508	783,282
2020	115,778	127,654	234,946	814,664
2019	132,420	143,726	247,574	851,948
2018	126,188	143,536	252,180	874,020
2017	118,982	139,842	248,008	873,112
2016	114,488	131,068	233,456	859,978
2015	106,952	124,462	219,632	842,886
2014	101,314	122,370	211,896	821,126
2013	101,632	117,824	204,022	792,394

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Report Generated: January 17, 2026
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