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Journal Issue: Protecting Children from Abuse and Neglect Volume 8 Number 1 Spring 1998

The Costs of Child Protection in the Context of Welfare Reform
Mark E. Courtney

Relative Per Capita Costs

An examination of the costs of the federal foster care program relative to its "mother" program, AFDC (now TANF), provides a striking contrast that helps to put child protection programs into perspective relative to other programs that serve primarily low-income populations. This comparison provides a compelling view of how meager society's commitment of cash support to poor families is when measured against its commitment to care for children who have been taken from the custody of similar families.

Foster Care Versus Welfare Funding

The federal foster care program spends more on each child it helps than do either welfare programs or in-home child protection programs. The costs of foster care have also risen far more rapidly than the costs of public assistance.7 The high cost of federal foster care partly reflects the fact that it is more expensive administratively to prepare for and supervise the care of children than it was to distribute welfare checks.8 It also costs more to entice foster care providers to raise children than states paid welfare recipients who cared for their own children. In 1993, the median monthly AFDC payment for one child ($212) was more than $100 per month less than the median foster home maintenance payment. Costs of care for children living in group homes and residential treatment centers, rather than foster family homes, averaged about $3,000 per month.3 Furthermore, foster care rates are proportional to the number of children placed (two children generate twice the foster care rate of one child), while AFDC per capita payment rates decreased with increased family size. Thus, the more children in a family, the greater is the difference in cost between public assistance and foster care.

The net effect of these differences is that the federal government spent about $11,698 per child on foster care maintenance and administration costs in 1995, but only $1,012 for each person receiving AFDC.3 In other words, per child, it costs the federal government more than 11 times as much to provide foster care as to provide basic income maintenance. When state contributions are factored in, the average government cost of supporting an individual on welfare was $2,499, while the cost of operating the foster system was $21,902 per child.9

Investigation and Service Funding

In contrast to federal data on foster care costs, there are no reliable national estimates of the cost of investigating child maltreatment reports or of providing in-home services to children and families. These costs are borne primarily by states and localities, under many different funding arrangements. The American Humane Association has, however, estimated the costs of providing these basic child protective services in 1993 dollars using unit-of-service cost data from Ohio and Texas.10 According to its estimates, investigations by child protective services (CPS) agencies cost approximately $813 per investigation. The cost per case to provide in-home services such as homemaker assistance or family counseling was $2,702.

Although foster care spending has grown with the foster care caseload, funding for CPS investigations and services to families and children has not risen significantly, even though the number of children reported to CPS agencies increased by 63% from 1985 to 1995, reaching 3.12 million.3 About one-third of those reports were substantiated by child welfare authorities,11,12 and in 1993 an estimated 70% of the substantiated cases received in-home 150 services.10 Meanwhile, as Figure 1 shows, funding for investigations and services did not rise nearly as fast as reports and caseloads.

The disparity in growth rates shown in Figure 1 has worsened the mismatch between funding for front-end services such as child maltreatment prevention efforts, investigations, and in-home services to children and families; and deep-end services such as out-of-home care. Even the addition of nearly $1 billion in Family Preservation and Support Services Program funding over five years does not bring funding for the two parts of the child welfare system into balance, since the federal government is projected to spend more than $16 billion on foster care during the same period. Thus, during an era of steadily increasing child maltreatment reports and child welfare caseloads, the child welfare services system has been left with fewer resources to provide services to a much larger clientele.13,14