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Issue Alert - Adoption Subsidy and Guardianship Assistance Income

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Aug 05, 2011

Program Area:

FIP, SDA, FAP - only for Guardianship Assistance Program, CDC, RAPC

Issue Summary:

Unearned income from adoption subsidies and the Guardianship Assistance Program (GAP) will now be countable income for most types of public assistance, with the exception of Medicaid and, for the Adoption Subsidy, Food Assistance.

Persons Affected:

Families receiving income through the adoption subsidy program and/or the Guardianship Assistance Program

For More Information:

Michigan Poverty Law Program 611 Church Street, Suite 4A Ann Arbor, MI 48104-3000 (734) 998-6100 FAx: (734) 998-9125 email: Center for Civil Justice 320 S. Washington, 2nd Floor Saginaw, MI 48607 (989) 755-3120, (800)724-7441 Fax: (989) 755-3558 E-mail:


An adoption subsidy is a public benefit given to adoptive parents of children who, without the payment of the subsidy, would have remained in the foster care program. According to the Bridges Eligibility Manual, there are two kinds of adoption subsidies: (1) a support subsidy, which is “a payment for the ongoing care and support of the child” and (2) a medical subsidy, which is “a payment for medical expenses due to a physical, mental or emotional condition of the child.” In the past, the adoption subsidy was not counted as a form of income for the following public benefits programs: Family Independence Program (FIP), State Disability Assistance (SDA), Refugee Assistance Program Cash (RAPC), and Child Development and Care (CDC). The Guardianship Assistance Program (GAP) is a newer program to help children for whom reunification and adoption are not possible. The program seeks to provide a permanent situation for these children who would otherwise remain in foster care until they reach the age of majority. Because this is a new source of funding, there were no previous rules about whether the benefit would be counted as a source of income under the Bridges programs.

What's Happening?

As of July 1, 2011, the adoption subsidy will be counted as unearned income for the following programs: FIP, SDA, RAPC, and CDC programs. However, medical subsidies will continue to be excluded from income. This change will begin affecting benefits starting on July 1, 2011. This means that some of your clients may have seen, or soon will see, a reduction in their benefits. As a result of this change, families may no longer be financially eligible for certain benefits once this subsidy is counted as income, particularly families who have adopted multiple children. Therefore, these families may find they have been cut off from these benefits. This change will have a substantial impact on adoptive families in Michigan. This change was made to comply with the following federal regulation: 45 C.F.R. 233.20 (a)(1)(ii). As of July 1, 2011, GAP financial support is considered unearned income for FIP, SDA, RAPC, Food Assistance Program (FAP), and CDC programs. This change will begin affecting benefits starting on July 1, 2011. Just as with the adoption subsidy, families receiving the GAP benefit may no longer be financially eligible for other Bridges benefits. Prior to this change, many families wereeligible for cash assistance, food assistance, and other Bridges programs based on their income level, despite receipt of these benefits. According to a 2009 report by the Department of Human Services, about ninety percent (90%) of children adopted receive an adoption subsidy, which totals roughly 1,250 children.

What Should Advocates Do?

If you have clients who have adopted children or who will be adopting children, make them aware of these changes and the impact the changes can have on the public benefits they may receive.

Finding Help

Most legal aid and legal services offices handle these types of cases, and they do not charge a fee. You can locate various sources of legal and related services, including the free legal aid office that serves your county, at You can also look in the yellow pages under "attorneys" or call the toll-free lawyer referral number, (800) 968-0738.