Section V: Nonrecurring Expenses of Adoption

The State must enter into an adoption assistance agreement prior to the finalization of the adoption and reimburse (up to $2000, or at State option a reasonable lower limit) the nonrecurring adoption expenses incurred by any parent who is adopting a child with special needs¹⁰. Consistent with the regulations at 45 CFR 1356.41(f)(2), if a State sets a lower maximum, it must be based on reasonable charges, consistent with State and local practices, for special needs adoptions in the State. The basis for setting a lower maximum must be documented and available for public inspection.

The only eligibility criterion to be applied for reimbursement of the nonrecurring expenses of adoption is that the State determine that the child meets the three-part special needs criteria, in accordance with section 473(c) of the Act. A child does not have to be eligible for AFDC, title IV-E foster care, or SSI in order for the adoptive parent(s) to be reimbursed for their nonrecurring adoption expenses.

The term "nonrecurring adoption expenses" is defined in section 473(a)(6)(A) of the Act and 45 CFR 1356.41(i) as the reasonable and necessary adoption fees, court costs, attorney fees and other expenses which are directly related to the legal adoption of a child with special needs, which are not incurred in violation of State or Federal law, and which have not been reimbursed from other sources or funds. The regulations at 45 CFR 1356.41(i) define "other expenses" as the costs of the adoption incurred by or on behalf of the parent(s) and for which the parent(s) carry the ultimate liability for payment. Such costs may include, but are not limited to, expenses for adoption studies, health and psychological examinations, supervision of the placement prior to the adoption, and reasonable costs of transportation, lodging, and food when necessary to complete the placement or the adoption process.

When the adoption involves an interstate placement, the State entering into the adoption assistance agreement with the prospective adoptive parent(s) is responsible for paying the nonrecurring adoption expenses. If no Federal or State adoption assistance agreement exists for an ongoing subsidy, the State in which the final adoption decree is issued is responsible for reimbursing the nonrecurring adoption expenses if the child is determined to be a child with special needs (45 CFR 1356.41(h)).

In accordance with 45 CFR 1356.41(f)(3), when siblings are adopted, each child is treated as an individual with separate reimbursement for the nonrecurring expenses of adoption up to the maximum amount allowable for each child.

The nonrecurring expenses of adoption may be reimbursed on behalf of a child in an adoptive placement regardless of whether the adoption is ever finalized, so long as the State has determined that the child is a child with special needs and there is a title IV-E agreement for the nonrecurring expenses of adoption between the adoptive parent(s) and the State or local agency.

Although the adoption assistance agreement must be signed and in effect prior to the finalization of the adoption, FFP is available for claims for reimbursement that are made by the adoptive parent(s) up to two years from the date of the finalization of the adoption.

Questions Related to the Nonrecurring Expenses of Adoption Requirement:

(A) Does the State enter into an agreement to reimburse adoptive parent(s) for the nonrecurring adoption expenses incurred, up to $2000 or a reasonable lower limit, in the adoption of a child with special needs?

YESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

(B) Does the State apply the three-part special needs determination to the child to determine whether the parent(s) are eligible for reimbursement of the nonrecurring adoption expenses incurred in the adoption of the child?

YESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

(C) Does the State apply any additional criteria not in Federal law, such as requiring a child's eligibility for ongoing title IV-E adoption assistance, requiring an income eligibility test for the adoptive parent(s) or limiting reimbursement by category, for reimbursement of the nonrecurring expenses of adoption?

YESNONEEDS CLARIFICATION

If yes, this is inconsistent with Federal requirements.

(D)(i) Does the State set a reasonable lower limit than the $2000 allowed by Federal regulations?

YESNONEEDS CLARIFICATION

(D)(ii) If yes, is the lower amount based on reasonable charges, consistent with State and local practices, for special needs adoptions within the State?

N/AYESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

(E) Does the State require that the adoption assistance agreement for reimbursement of the nonrecurring expenses of adoption be signed by the parents and the agency prior to the finalization of the adoption?

YESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

(F) When siblings are adopted, either together or individually, does the State treat each individually with a separate reimbursement for the nonrecurring expenses of adoption incurred on behalf of each sibling?

YESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

(G) Does the State enter into an adoption assistance agreement and reimburse the nonrecurring expenses of adoption if it places a special needs child with adoptive parent(s) in another State?

YESNONEEDS CLARIFICATION

If no, this is inconsistent with Federal requirements.

Steps to address areas needing clarification:
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List any areas noted above that are inconsistent with Federal requirements:
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Action(s) needed to assure the State's program meets Federal requirements:

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Citations for State laws, administrative rules, policies, etc., used for review of this requirement:
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Legal and Related References for the Nonrecurring Expenses of Adoption:

Sections 473(a)(1)(B)(i) and 473(a)(6) of the Social Security Act
45 CFR 1356.41
Child Welfare Policy Manual, Sections 8.2D.3 (1-6), 8.2A.2 (1), 8.2D.4 (1-7), and 8.4D (1-2)

¹⁰ Please note exception for favorable fair hearing decisions. back

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