Kinship caregivers receive $328/month from TANF while licensed foster parents receive $1,622/month for the same child

When a child cannot remain with their parents, the child welfare system overwhelmingly prefers placement with relatives (kinship care). Approximately 2.5 million children are raised by kin in the U.S. as of 2024. But most kinship caregivers — often grandparents who step up on short notice — cannot meet state licensing requirements (spare bedroom size, income thresholds, home inspection standards designed for stranger foster parents). Unlicensed kin caregivers are ineligible for foster care maintenance payments and must instead rely on TANF child-only grants, which averaged $328/month nationally in 2023 compared to the average foster care maintenance payment of $1,622/month for non-relative licensed foster homes. Why it matters: A grandmother who takes in her grandchild overnight to prevent them entering the system receives one-fifth the financial support of a licensed stranger foster parent caring for the same child. So kinship caregivers — 20% of whom already live in poverty and 25% of whom have a disability — drain their own savings, retirement, and Social Security to cover the child's food, clothing, medical copays, and school supplies. So many kinship placements break down due to financial strain, and the child ends up in the formal foster care system anyway. So the state then pays 5x more for a stranger placement that produces worse outcomes (kinship placements have higher stability and better emotional outcomes). So the system perversely punishes the families who keep children out of foster care while spending billions more on the alternative. The structural root cause is that foster care licensing standards were designed for stranger caregivers and were never adapted for relatives. States tie financial support to licensing status rather than to the child's needs. Federal Title IV-E funding requires foster home licensing, so states cannot use those funds for unlicensed kin without a waiver. If all 2.5 million kinship-raised children entered formal foster care instead, it would cost taxpayers over $10.5 billion per year — yet there is no political will to equalize payments because it would expand state budgets.