INDIANAPOLIS (AP) — Indiana won’t cut subsidies to parents and other
caregivers for more than 21,000 adopted and foster children under a
settlement to a class-action lawsuit that was pending Wednesday before a
The agreement filed Friday by attorney Ken Falk of the American Civil
Liberties Union of Indiana would make permanent a preliminary order by U.S.
District Judge Sarah Evans Barker barring the Department of Child Services
from carrying out a proposed 10 percent reduction in the maximum $25 per day
subsidy that parents and guardians receive for the daily needs foster
children and some adopted children with special needs.
Barker is expected to sign the permanent order in January, which would come
one year after she issued her preliminary injunction in the case.
“It is in the best interest of children to come to this settlement,” DCS
spokeswoman Ann Houseworth said Wednesday of the settlement, first reported
a day earlier by WRTV-TV in Indianapolis.
At issue are the monthly subsidies that foster parents and other caregivers
of Indiana’s approximately 10,500 foster children receive to cover the cost
of providing food, clothing, shelter, school supplies and other expenses.
The parents of more than 11,000 adopted children with special needs also
receive the subsidies, up to a maximum of $25 per day.
DCS a year ago planned to cut the maximum rate by 10 percent to $22.50 per
day, but it quickly was challenged in two federal lawsuits, one filed by a
coalition of child care agencies and the other by foster parents and
adoptive parents. Both complaints, later merged into one, alleged the cuts
would harm the children and violated the federal Social Security Act.
“The state agrees it will rescind the (lower) rates,” Falk said.
DCS proposed the lower rates after Gov. Mitch Daniels ordered state agencies
to slash their budgets in response to state revenue shortfalls caused by the
economic downturn. The difference in the two rates comes out to about $75
per child per month, or more than $19 million annually if each child
received the maximum subsidy.
Only two states pay more than $25 per day, Houseworth said. The federal
government covers part of the payment.
In some special needs adoptions, DCS and the parents negotiate a daily rate
lower than $25, and in some adoptions there’s no subsidies at all,
“This is based on the needs of the child,” she said.
The proposed settlement allows DCS to come up with a new formula for
calculating the daily rate for children in foster care, but that does not
preclude foster parents from challenging the new rates when they’re
determined, Falk said.