Episode 35

Episode 35 - The Truth About Foster Care Money: Per Diems, Reimbursements, and Reality

Published on: 27th January, 2026

There’s a common myth that foster parents “do it for the money.” In this episode of the Dream Small Podcast, we walk through the real financial support foster parents receive in Indiana, including per diem rates, reimbursements, adoption subsidies, and why none of it comes close to covering the true cost of caring for a child.

If you’ve ever wondered:

  1. Do foster parents get paid?
  2. How much money do foster parents receive?
  3. Is foster care financially sustainable?

This episode gives honest, firsthand answers based on real-life experience.

What You’ll Learn in This Episode:

1. Foster Care Per Diem Rates in Indiana

Foster parents receive a daily per diem intended to offset basic living expenses. Rates vary by age and level of need determined by a CANS score.

Approximate daily rates:

- Level 1: $27 - $35

- Level 2: $36 - $43

- Level 3: $48 - $55

- Level 4: $72 - $79

These funds cover essentials like food, clothing, and hygiene items, not income.

2. Initial Clothing Allowance

Indiana provides a one-time $200 clothing voucher when a child is placed, helping cover immediate needs like clothing, shoes, and baby supplies. No sales tax applies.

3. Annual and Special Allowances

  1. $300 annual personal allowance per child
  2. $50 birthday allowance
  3. $50 Christmas allowance

(Some agencies may supplement these amounts.)

4. Medicaid and WIC

All foster children receive Medicaid coverage. Children under five may also receive WIC benefits to help cover formula and basic nutrition.

5. Adoption Through Foster Care

Adoptive families may continue to receive:

  1. Ongoing per diem support
  2. Medicaid coverage
  3. Partial adoption legal fee coverage
  4. A federal adoption tax credit

6. Kinship Care vs Licensed Foster Care

Kinship caregivers often receive fewer benefits unless licensed. Licensing unlocks additional financial supports.

7. The Big Takeaway

Foster care payments are reimbursements, not income. Families who do foster care well almost never break even.

Who This Episode Is For:

  1. Prospective foster parents
  2. New foster families
  3. Kinship caregivers
  4. Anyone curious about foster care finances

If this episode was helpful, please consider sharing it with someone who has questions about foster care or who may be considering becoming a foster parent.

You can support the Dream Small Podcast by following, rating, and reviewing the show on your favorite podcast platform.

To financially support the podcast, visit: https://dream-small-podcast.captivate.fm/support

Contact:

Email: dreamsmallpodcast@gmail.com

Instagram: @dreamsmallpodcast

Facebook: Dream Small Podcast

Twitter/X: @DreamSmallShow

Music Credit:

“Paradise Found” Kevin MacLeod (incompetech.com)

Licensed under Creative Commons: By Attribution 4.0 License

http://creativecommons.org/licenses/by/4.0/

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About the Podcast

Dream Small Podcast
The Dream Small Podcast is a foster care and adoption podcast hosted by Jason and Whitney Small, foster and adoptive parents who have welcomed more than 14 children into their home and adopted three. Through honest conversations and real life stories, the podcast encourages foster parents, adoptive families, and those considering foster care.

Each episode explores the realities of foster care, adoption, and parenting children from hard places, offering practical encouragement and hope for families navigating the foster care journey. Jason and Whitney share lessons from their own experience, faith, and conversations around trauma informed parenting, family life, and supporting vulnerable children.

Whether you are a current foster parent, an adoptive parent, considering becoming a foster parent, or someone who supports foster families, the Dream Small Podcast exists to encourage and equip you along the way.

Jason and Whitney believe that changing a child’s life rarely happens through big moments. More often, it happens through small, faithful acts of love lived out every day.

If you're thinking about becoming a foster parent or walking the foster care journey, this podcast will help you navigate the challenges, celebrate the wins, and stay encouraged along the way.
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