The System Pays Strangers More Than It Pays Grandma

When a child can't stay with a parent, federal policy says the first choice should be a relative — a grandmother, an aunt, a family friend — over a stranger.▸ States agree in principle: 39% of children in foster care nationally, 126,944 of them, were living with relatives or kin as of September 2024, according to a March 2026 issue brief from HHS's Office of the Assistant Secretary for Planning and Evaluation and the Children's Bureau, drawn from federal AFCARS placement data. What states don't agree on is what to pay for it. A 2023 federal rule requires that a licensed kinship home get the same Title IV-E foster care maintenance payment as any other foster home. Nearly half of kinship placements aren't licensed — and for them, no such guarantee exists.

Kinship care isn't a niche arrangement — it's the placement for two in five children the government has already removed from a parent.▸ But "kinship care" is really two different systems wearing one name. A licensed kinship home has passed the same (or a state's separate, kin-specific) foster-licensing standard and draws the same maintenance payment as an unrelated foster family. An unlicensed kinship home has not — often because relatives take in a child on short notice, with none of the lead time a prospective foster parent gets to prepare a home for inspection. Of the 126,944 children living with kin in FY2024, 71,508 (56%) were in licensed homes; 55,436 (44%) were not, per the same ASPE issue brief. Licensure, not the caregiving itself, is what decides whether the child welfare system treats the placement as fundable.

Licensure isn't a paperwork formality — it's the line between two pay scales for identical work.▸ A licensed relative foster home draws a foster care maintenance payment that Child Trends' analysis of federal AFCARS placement data puts at a national average of $915 a month per child. An unlicensed kin caregiver generally can't draw that payment at all; the fallback is a state TANF "child-only" grant, which the Grandfamilies & Kinship Support Network found averaged $328 a month for one child in 2023, ranging from $81 in Arkansas to $780 in California — and in more than half of states, unlicensed kin get no dedicated payment at all, according to a 2024 Annie E. Casey Foundation survey of state child welfare agencies. Where a TANF child-only grant does exist, it pays 36 cents for every dollar the licensed rate pays — a $587 monthly gap per child, $7,044 a year, for the same job of raising someone else's grandchild.

The 2023 federal rule that guarantees licensed kin the foster rate only helps if a state has actually built a kin-specific licensing path to get caregivers licensed in the first place.▸ As of February 2026, only 24 of 67 eligible jurisdictions — 19 states and five tribes — had amended their Title IV-E plans to adopt one, per the same ASPE brief. Where a child lands also depends on how aggressively a state places children with relatives at all: Illinois placed 57% of its foster children with kin in FY2024, the highest rate in the country, while Tennessee placed just 11%, the lowest. A grandmother in Chicago and a grandmother in Nashville can be doing the identical job, for a grandchild in an identical legal status, with wildly different odds of ever being offered the option, let alone the payment.

Figures are national averages compiled from federal AFCARS placement data and state TANF policy surveys; the $915 foster-rate average dates to a 2021 AFCARS analysis (the most recent available), while the FY2024 placement counts and the $328 TANF average use FY2024 and 2023 data, respectively — each figure is dated to its own source in the citations above.