Implementation of the Tiered Rate Structure

Highlights

California is restructuring rates so that they are based on the individual needs of each child, not the placement type.

California’s tiered rate structure will provide youth in family settings the same level of funding to support care/supervision, strength building, and immediate needs at the child's assessed level of need, regardless of the placement type.

Changes are designed to help address historical racial inequities and help break the cycle of intergenerational poverty and trauma.

Background

The interim rate structure created as part of CCR created a level of care system for children in family settings and a separate rate structure for those in congregate settings. Statute required the California Department of Social Services (CDSS) to establish an “ongoing payment structure no later than January 1, 2025”. To comply with the statutory deadline, the Tiered Rate Structure proposal was introduced on January 10, 2024, as part of the 2024-25 Governor’s Budget. In July of 2024 the Tiered Rate Structure passed as a part of Assembly Bill 161, the Health and Human Services Trailer Bill Language (TBL). The Foster Care Permanent Rate Structure payments will begin on July 1, 2027, or once automation is complete, whichever is later.