What Is an Adoption Subsidy?

Each year, there are thousands of children who are placed for adoption that are considered "special needs" adoptions. Special needs children may be mentally, physically, or emotionally disabled, a member of a minority group or a sibling group, or may be too old to be easily adopted out. As an incentive for prospective adoptive parents to adopt special needs children, both the federal and state governments in the United States offer an adoption subsidy to parents. The adoptive parents receive a monthly adoption subsidy in an amount determined by the state where the child was adopted until the child reaches the age of majority, as well additional assistance during and after the adoption.

The United States government enacted legislation in 1980 through the Adoption Assistance and Child Welfare Act, which created the right to a federal adoption subsidy for adoptive parents of special needs children. The purpose of the Act was to do away with the practical concern many prospective adoptive parents had regarding the additional cost of raising a child with special needs. In addition, the Act covers some of the special needs categories of children that have traditionally been difficult to adopt out.

Many individual states have also enacted legislation which offers adoption subsidies to adoptive parents. An adoptive parent may be eligible for the state or the federal adoption subsidy program. In addition to a monthly subsidy amount, an adoptive parent may also be eligible for assistance with the initial cost of the adoption, as well as for ongoing medical coverage for the child or children through the Medicaid program.

Raising a child who has mental, emotional, or physical disabilities can be costly. Many children with disabilities require special medical treatment and/or therapy. In addition, they may require more than the average amount of supervision or attention from a parent, which may cause the family income to decrease. By providing a monthly adoption subsidy, some of the financial hurdles to adopting these children are removed.

Older children, minority children, and children who are part of a sibling group have also been traditionally difficult to adopt out. By providing an adoption subsidy, prospective parents may be persuaded to consider adopting a child, or children, that they might otherwise not have considered. Sibling groups, in particular, may not be considered by adoptive parents in the absence of a subsidy due to the additional cost of adopting three or more children at the same time.