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Laura W. Morgan
Family Law Consulting

Benefits received from means-tested assistance programs, such as TANF (formerly AFDC), Supplemental Security Income (SSI, as opposed to Social Security received on the account of a parent), Food Stamps, Section 8 housing allowanced, and general assistance grants are not income.

The question has arisen whether adoption assistance benefits come within this rubric. Adoption subsidies are provided as part of a joint federal and state plan to promote and subsidize the adoption of children with special needs. The federal plan, codified at 42 United States Code § 670 et seq. (1994 and Supp.1999), was passed in 1980 as part of the Adoption Assistance and Child Welfare Act. Essentially, the program provides federal reimbursements to states that pay benefits to parents who adopt children with special needs. 2 Joan H. Hollinger, Adoption Law and Practice § 9.02 (Supp. 2003). Every state now has an adoption assistance program, and, because the statutory provisions governing the federal program are in Title IV-E of the Social Security Act, the benefits are typically called “IV-E benefits.”

The North American Council on Adoptable Children states on its web page that adoption subsidies were never intended to be used as bargaining chips between divorcing parents. Rather, the subsidies are the “entitlement of the adopted children, not the parents.” As such, the payments should follow the children and be used strictly for the benefit of the children, not as income for a parent. The web-page also notes that the Internal Revenue Service has stated that Title IV-E adoption subsidies are exempt for purposes of taxation. Rev. Rul. 74-153, 1974-1 C.B. 20.

Based on these factors, in the states that have considered the question, the answer has been that adoption assistance benefits are not income to either parent, and cannot be considered income in the child support calculation. Hamblen v. Hamblen, 54 P.3d 371 (Ariz. Ct. App. 2002); In re Paternity of M.L.B., 633 N.E.2d 1028 (Ind. Ct. App. 1994); Strandberg v. Strandberg, 664 N.W.2d 887 (Minn. Ct. App. 2003); County of Ramsey v. Wilson, 526 N.W.2d 384 (Minn. Ct. App.1995); A.E. v. J.I.E., 179 Misc. 2d 63, 686 N.Y.S.2d 613 (Sup. Ct. 1999).

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