[kbcouch]

Long story here! We fostered two boys and then when they were placed with us adoptively we also then took on the littlest sister (had to decide and couldn't turn her away so figured we would deal with the financial issues later!) At any rate, we adopted all three in June 2008 and negotiated subsidies based on the their special needs which began in July 2008. Now, due to adopting the youngest child, my daycare rate increased and the cost for a week was more than what I made working. My husband works but we need both incomes to cover all expenses. We decided that it would be best for me to quit my job and stay home and that would save the daycare expense. Yes, things are real tight, but we are doing the best we can to live within those means, but some things are getting real tough. The subsidy is for the needs required by the children, not to pay our mortgage, utilities, food etc. So I am trying to apply for heating assistance and help with groceries. These programs require you to report Adoption Assistance, which is considered 'unearned income' which then puts us over the limit. Without the assistance, we would actually qualify for the PIPP programs for our utilities. I've filled out the applications anyways, but does anyone have any experience with this? I attached a letter regarding the amount of the subsidy and explained that this is for the special needs of the children, there is certainly not enough afterwards for us to help with other expenses, nor is it supposed to.
for any advice on this subject.

[Indy]

I don't understand your statement"...subsidy is for the needs required by the children, not to pay our mortgage, utilities, food etc." The subsidy is exactly that, intended to help you support the children. This can include food, house payment, tutoring, special daycare, special diets, etc.

Are you saving the subsidy monies and only using them for specific child expenses? They are not intended for that, at least according to my worker. I have saved a substantial amount for educations for the boys, but have used some of the money to pay for living expenses. I have used it to help finance a trip to Alaska for one, special camps for another, a trip to WA for another, a down payment for a car for another, a fresh start in an apartment for another...etc. I have used it for helping with living expenses, as I would not need a large house and full size van if I didn't have the boys.

You are correct. You will probably not qualify for assistance when the subsidy is included. That should be an indicator how the government considers the usage of the subsidy...you are to use it to help support the family.

I hope this helps.

[kbcouch]

Subsidy monies are to help pay for the special needs of the child that are above and beyond your means. As a norm, these children who require certain things could not normally be adopted as most people are not able to afford, therefore, a subsidy. Now, maybe in my case, I am not receiving alot of subsidy then, because there is truly not a whole lot left over per month to be considered comfortable. Again, we are down to only one income, whereas, when we were fostering, we had two incomes plus the stipend for fostering. I guess where I am discouraged is the fact that we are struggling more after the adoption than before and I don't want to put my children in the position of having to live the way they did prior to coming into care.

[o2b30again]

Indy I think said it well. Monies that come after adopting special needs children are for anything the children may need. Be that heat, home or food. Special appointments, gas or car payments. Amounts are figured according to the children's needs and unfortunately are much less then the fostering rate. You can always appeal your current amount received. You didn't mention that the children's needs have actually changed, such as number of medical appointments or therapy classes etc. I don't believe the cost of childcare is going to sway their decision or that you chose to stay at home with your children. I know this was the realistic option because you were putting out more money than earned and I understand why you chose this. I would contact your worker and ask for assistance and see what options you have. I am sorry that you situation is dire at the moment and will hope the best for you and your clan.

[kbcouch]

Not sure if this then varies from state-to-state, but our worker made us list everything the child needs (outside of food, clothing, shelter etc.) and that was what was applied for. We were told that subsidies start at $0 and you have to prove the needs of the child in order to get for that only. We were told that our financial position has no bearing on getting further subsidy. Yes, it was my choice to stay home with the children as we would not be able to afford the daycare...utilities go up when you are now home all day etc. The childrens special needs have not changed, but again the subsidy was determined strictly based on their special needs at the time of negotiation.

[Indy]

I had to negotiate from this stand point on my last son. It is tough. The assistance was equal to 25% of the foster rate. States are using this method as budgets are getting tighter. What they will find is that more children will stay in foster care vs. adoption. It is sad, but true.

My only recommendation is when you are required to give your income and include the adoption subsidy, provide them with a list of additional expenses that you have to pay for your children. That may offset the additional income.

Good luck...as things are getting tight everywhere.

[jbee]

nothing really to do with the subsidy, but dh and i both are stay at home parents because we do daycare from home. maybe that would be an income for you?
i know it depends upon your state, but here in PA we can each watch 3 in addition to our own without going through the licensing hoops. we make 100/wk/child here in my area. if your daycare costs were so much, maybe you could make a decent amount doing it.
in our case our subsidy went from 40/day for our son in foster care to 15/day as an adopted child. ouch!

[millie58]

In NY, the adoption subsidy is a portion of the foster stipend. It goes from 75-90% depending on family size and income. I also think more kids will stay in foster care. States are paying less for services for adopted kids and with budgets tightening, it will get worse before getting better.

[jessnboys]

Another thing to look at is if they are eligible for SSI (depending on the needs/disability). My adoption subsidy is almost half of what my son's SSI is. We also have full medical, prescription, therepy and gas reimbusement for dr apts that are more than x miles away. It was a pain to apply and get approved, but worth it in the end. It makes M qualify for more services.

Good Luck!

[sundara]

Another thing to consider is the adoption tax credit. Since you ended up with 3 siblings, you should be able to take this credit (10K per child) WITHOUT having to prove special needs (as sibling groups of 3 or more automatically qualify as special needs) and use it over 5 years. This is a huge item, and has the potential to change your calculation of daycare vs working as well.

And credit is MUCH better than a tax deduction. A credit does not reduce the income that is taxed, it goes directly against the total taxes owed. Here is how the credit works (NOTE: I am not a tax person, so these numbers are NOT accurate - this is only an example - PLEASE CONSULT A TAX PERSON):

credit:
Assume you have $40,000k income and this would cause a $6000 federal income tax (at flat 15%). Apply the adoption credit and you owe zero taxes that year (a savings of $6000 dollars). You have used up $6000 of your $30K tax credit, meaning you still have $24000 left for the following 4 years.

The following year, you again have $40,000k income and this would cause a $6000 tax again. Apply the adoption tax credit to this and you owe zero taxes (again) and have $18000 in tax credit left.

Keep repeating until the tax credit is all used up or 5 years of tax savings has passed (in the example above, both would occur in the 5th year). Net result, you really do have $30k in REAL money saved.

~~~~~~~~~~
In a real world example, you have other deductions already (standard deduction, maybe home mortgage, 401K, etc), so you would probably not use up all of the credit. Due to this, it might actually pay to go to work after all. You should talk to a reputable CPA about this and ask them to run some scenarios for you.