A Deeper Dive on California’s Proposed 2027 Tiered Rate Structure
As previously explored on the AFS blog, California is embarking on a groundbreaking transformation of its foster care funding model, known as the Tiered Rate Structure (TRS), set to begin on July 1, 2027.
Let’s go into more detail about how funding may change.
A Shift from Placements to People
For many years, the foster care system has operated under an interim rate structure that tied funding to the type of placement a child was in. For example, residential facilities often received higher rates than family-based settings, regardless of the child’s specific needs.
The upcoming 2027 changes upend this model. California is restructuring its rates so that funding follows the child, based on their unique, assessed level of needs and strengths, rather than where they live. This means that a youth can receive the same level of intensive financial support and services whether they are placed with a relative, a resource family, or in a therapeutic program.
How the New System Works
The Tiered Rate Structure is informed by the Child and Adolescent Needs and Strengths (CANS) assessment tool. This validated tool gathers information from the people most important to the child, including the child themselves, to understand their well-being and identify where action is most needed.
Based on these assessments, youth will be supported through a three-tier system:
- Tier 1: Focuses on the basic care and supervision needs of the majority of youth in care.
- Tier 2 , 3, and 3+: Provides additional layers of support for children with more complex behavioral health or medical needs.
Three Pillars of Funding
Under this new model, every child in foster care will have access to three specific funding components tailored to their tier:
- Care and Supervision: This is paid directly to the caregiver to cover daily necessities like food, clothing, and transportation.
- Strengths Building and Maintenance: In a first-of-its-kind move, California is investing in the joy and potential of our youth. The latest proposal is that this fund provides a certain amount per month (depending on the tier) specifically for enrichment activities such as sports, art classes, music, and other extracurricular interests.
- Immediate Needs: For youth in higher tiers, flexible funding will be available to provide urgent interventions and specialized therapy to help them heal from trauma and stabilize their placements.
Why These Changes Matter
By making it more financially feasible for families, including grandparents and other kin, to care for youth with complex needs, the state aims to reduce reliance on restrictive residential facilities.
Furthermore, these changes are a vital step toward addressing historical racial inequities and breaking cycles of intergenerational trauma. It empowers resource parents with the resources they need to create a custom healing journey for the children in their care.
Looking Ahead
While the transition to the permanent rate structure is at least over a year away, AFS is already working closely with state and county partners to prepare. We are also heartened by recent budget agreements that provide a “lifeline” to Foster Family Agencies (FFAs) through cost-of-living adjustments (COLAs), ensuring that agencies like ours can continue to recruit, train, and support the incredible families California relies on until the new system is fully live.
We remain committed to walking this path alongside our resource families and youth. As 2027 approaches, we will continue to provide updates and training to ensure our community is ready to embrace this more compassionate and efficient support system.
California is embarking on a groundbreaking transformation of its foster care funding model, known as the Tiered Rate Structure (TRS), set to begin on July 1, 2027.
This blog covers just one element of the proposed changes. We explored another component, High Fidelity Wraparound Services, in another blog post. And, stay tuned to the AFS blog for more information and insights on this important topic.
