The 2026-27 California Spending Plan

Human Services

Child Welfare

California’s child welfare services system serves to strengthen families and protect the state’s children from abuse and neglect, including by providing temporary foster care placements for children who cannot safely remain in their homes and services to safely reunify children with their families. This post describes the 2026-27 spending plan for child welfare.

Budgeted Expenditures

Child Welfare Allocations Increase by About $40 Million General Fund. Total child welfare local assistance spending for 2026-27 is budgeted at $1.2 billion General Fund ($10.7 billion total funds), including the Approved Relative Caregiver program, Kinship Guardianship Assistance Payment program, Adoption Assistance Program (AAP), foster care payments, continued implementation of Continuum of Care Reform, child welfare automation projects, extended foster care programs for non-minor dependents and programs for former foster youth, and other special programs—all implemented by the Department of Social Services (DSS). This is an increase of $41 million General Fund ($533 million total funds) relative to 2025-26 expenditures. A summary of year-over-year changes in child welfare local assistance budgeted expenditures is shown in Figure 1.

General Fund Net Increase Reflects Budget Augmentations… The 2026-27 spending plan for child welfare includes some new spending, such as a one-time augmentation for child protective services emergency response, a one-time augmentation for the Bringing Families Home program, and new ongoing funding for a tribal foster care prevention initiative. These funding increases are summarized in Figure 2.

…And Anticipated Program Growth… Additionally, the 2026-27 spending plan includes expenditure increases for certain child welfare program elements that typically grow from year to year. For example, expenditures for the home-based family care rate—namely the monthly care and supervision payments made to foster caregivers and for kinship and adoptive placements—are budgeted to increase by more than $30 million General Fund ($50 million total funds) in 2026-27 (a 12 percent increase relative to 2025-26), due largely to the annual cost-of-living adjustment. Additionally, the spending plan includes a year-over-year increase of $63 million General fund ($126 million total funds) for Child Welfare Services-California Automated Response and Engagement System (CWS-CARES) ongoing development and implementation efforts. CWS-CARES is the state’s new comprehensive child welfare data system that currently is scheduled to go live in December 2026. These funding changes are summarized in Figure 2.

…Partially Offset by Expiration of One-Time Funding Provided in 2025-26. Although on net state allocations for child welfare programs increase in 2026-27 relative to 2025-26, there are some prior-year augmentations that expired. Notably, the 2025-26 budget included $81 million for Bringing Families Home (although, as noted earlier, the budget also provides a new one-time augmentation for the program) and $23 million General Fund for foster family agencies (FFA) in response to significant insurance coverage cost increases. These funding amounts were provided in 2025-26 on a one-time basis and do not continue in 2026-27, effectively resulting in decreases from year to year. These changes are summarized in Figure 2.

Some Prior One-Time Funding Is Reappropriated. The spending plan reappropriates some unspent child welfare allocations from prior years that otherwise would have expired (and reverted to the General Fund). This action allows counties/other child welfare stakeholders to continue spending these dollars in 2026-27. These reappropriations include:

• Up to $100 million Flexible Family Supports funding appropriated by the budget acts of 2022-23 and 2023-24. This funding aims to help foster youth be placed and/or remain with relatives and resource families. Counties use the funding to stabilize home-based foster placements and support foster youth and caregivers by providing: respite care, direct and concrete supports (such as furniture, home repairs, or rental deposits), support for extracurricular activities, and other supports.

• Up to $6.1 million Complex Care funding appropriated by the budget act of 2021-22 to support adoptive children returning from out of state to prevent foster care reentry.

• Up to $6.5 million Bringing Families Home one-time augmentations appropriated by the budget acts of 2021-22 and 2022-23.

• Up to $5.6 million California Statewide Automated Welfare System funding for automation efforts needed to launch the Tiered Rate Structure—the state’s new foster care rates structure, which is described in more detail later in this post. This automation funding was originally appropriated by the budget acts of 2024-25 and 2025-26.

Trailer Bill Language

Updates to AAP. Chapter 26 of 2026 (AB 152, Human Services trailer bill) includes some updates to rates and placements for AAP. The language makes a number of changes, such as:

• Beginning July 1, 2028, revises provisions around eligibility for AAP benefits to be paid for children placed in Short-Term Residential Therapeutic Programs (STRTPs), or for wraparound services in lieu of out-of-home placement.

• By January 1, 2028, requires DSS to develop a curriculum for optional use by counties to inform and educate adoptive families. Curriculum will include information on maintaining AAP benefits, adolescent development and trauma, the importance of maintaining Medi-Cal, the benefits of using adoption-competent clinicians, and how to secure trauma-informed services.

• Subject to an appropriation, requires DSS to provide transition services to adoptive families.

• Subject to an appropriation, requires DSS to submit a report to the Legislature by January 14, 2028 on out-of-state, out-of-home AAP placements returning in-state.

• Subject to an appropriation, requires DSS to engage stakeholders to identify the training, services, supports, and any gaps that exist to support adoptive families connecting to resources before crises escalate to wraparound or residential placement. DSS shall provide to the Legislature proposed statutory changes by August 1, 2028.

Establishes Tribal Foster Care Prevention Initiative. Assembly Bill 152 creates a new initiative to help tribes pay for the costs associated with services aimed at preserving families and preventing the entry of tribal children into foster care. As noted above and shown in Figure 2, the spending plan includes $2 million General Fund new ongoing funding for this purpose. Eligible tribes will be able to opt in to receive the funding by submitting an annual letter of interest to DSS. Participating tribes will be required to submit annual progress reports, which will include information such as the types of services and number of families served.

Tiered Rate Structure

Preparations for Tiered Rate Structure Continue. As specified in statute (Chapter 46 of 2024 [AB 161, Human Services trailer bill]), DSS and various child welfare stakeholders currently are working to develop a new foster care rates structure—known as the Tiered Rate Structure. Although no new funding is included in the 2026-27 spending plan for this effort, the administration and stakeholders continue to work on developing detailed program guidance and taking other steps necessary to prepare for the launch of the new structure—with the new rates slated to roll out to youth and caregivers beginning July 1, 2027. For more background on the Tiered Rate Structure, refer to our prior child welfare budget publication.

This is a major implementation effort, which includes multiple new program areas and substantial administrative changes. Major areas of implementation that the administration and stakeholders are working on this budget year include:

• Integrated Practice Child and Adolescent Needs and Strengths (IP-CANS) and Child and Family Teams (CFTs). Based on current statute, foster youth participate in CFT meetings, which are collaborative sessions aimed at planning for the youth’s specific care and support needs. As part of the CFT process, a youth’s care team completes a CANS assessment. Additionally, the specific monthly care and supervision rate paid to a foster youth’s caregiver is determined by the Level of Care (LOC) Protocol tool and depends (in part) on the youth’s placement type (for example, placement with a county-approved resource family, FFA-supported resource family, or STRTP). While current foster care rates are based on this separate LOC tool and placement type, the new rates will rely on CANS data. As such, the administration and stakeholders are working to ensure that CFT meetings are occurring within the parameters specified in statute and that IP-CANS assessments are completed to model fidelity. For example, the administration is developing a suite of fidelity tools for monitoring and oversight of CFT and CANS processes. These tools include: county practice and improvement plan; CFT brochure, action plan, meeting observation tool, and survey; and IP-CANS fidelity review tool.

• Care and Supervision Rates. Under the Tiered Rate Structure, youth will be assigned a tier (Tier 1, 2, 3, or 3+) based on their areas of strength and needed supports, as assessed using CANS data. Each tier, in turn, is associated with a different foster care monthly maintenance payment rate, which will follow the child regardless of the setting in which they are placed and whether they change placements. The administration is working on guidance around the new care and supervision rates, anticipated for publication in the fall of 2026.

• Strengths Building Program. In addition to the new care and supervision rates, under the Tiered Rate Structure all foster youth will be entitled to a monthly allocation for the Strengths Building Program (the specific amount will depend on a youth’s assigned tier). This new program will provide a stipend for youth to participate in extracurricular/enrichment activities and is intended to operate as a self-determination model—meaning the youth themselves decide how they want to use the dollars. Funds will be administered by a third-party financial management coordinator. DSS is engaging stakeholders to develop guidance for the program, working on program templates and documents, and finalizing the scope of work for the financial management coordinator (aiming to execute the contract in early 2027).

• Immediate Needs Program. Another new program implemented as part of the Tiered Rate Structure will be the Immediate Needs Program, which will fund wraparound services and other services for youth with assessed higher levels of need (those assigned to Tiers 2, 3, and 3+). Because the program focuses on supporting foster youth to access needed behavioral health services, DSS is collaborating with the Department of Health Care Services (DHCS) to develop the program strategy and guidance. A key component of the Immediate Needs Program design will be leveraging Medi-Cal funding for High Fidelity Wraparound (HFW) services. The Medi-Cal spending plan includes funding for a new HFW rate effective July 1, 2026, which certified providers will be able to claim for eligible foster youth through the Immediate Needs Program. Additionally, DSS is in the process of selecting a third-party administrator to coordinate financial transactions between the state and county behavioral health plans for the nonfederal share of HFW and other specialty mental health services, among other responsibilities for the program. The administration plans to finalize selection of the third-party administrator in fall 2026. DSS and DHCS also are engaging stakeholders around other key design choices for the program.

• Automation. To ensure foster youth and their caregivers will receive the correct rates once the Tiered Rate Structure elements launch, the state’s benefits payment system and child welfare data system need to be updated accordingly. DSS is working with these system teams to communicate necessary automation updates.

Implementation Ultimately Will Depend on Budget Appropriation in 2027-28. As noted, DSS is working toward the anticipated roll out of the new rates structure beginning July 1, 2027. However, the actual launch of the new rates will depend on a few factors. According to statute (Welfare and Institutions Code section 11461, subdivision h, paragraph 9) amended as part of the 2025-26 budget process, the Tiered Rate Structure will take effect (1) once DSS notifies the Legislature that the necessary data systems updates are ready, and (2) when the Legislature makes a budget appropriation to operationalize the new rates. Essentially, this means the Tiered Rate Structure will only begin rolling out in 2027-28 if funding is included for this purpose in that year’s budget. Regardless, the many implementation preparation steps and processes described above continue to progress in 2026-27.