Understanding the Tiers Within the Proposed New Tiered Rate Structure

California is preparing for a “seismic shift” in how foster care supports are structured and funded. The new Tiered Foster Care Rate Structure, or TRS, is designed to move the state toward a more needs-based model of care. One where funding is connected to the needs and strengths of each child or nonminor dependent, rather than the type of placement they are in.

For many years, foster care funding has been closely tied to placement setting. This meant that higher levels of support were often associated with more intensive or institutional care environments. Under TRS, California is working to shift that approach, so children and youth can receive appropriate support in family-based and community-based settings whenever possible.

The new rate structure is expected to begin payments on July 1, 2027, or when the state’s required automation systems are ready, whichever occurs later. As implementation planning continues, understanding the tiers is an important first step in understanding how this new model may shape care for children, youth, families, caregivers, and providers.

The Core Philosophy: Support Should Follow the Child (Needs-Based Care)

At the center of TRS is a simple but important idea: children and youth should receive support based on who they are, what they need, and what will help them thrive.

The model is intended to help children remain connected to family, kin, Tribes, caregivers, and community whenever safely possible. By separating funding from placement type, TRS aims to make more intensive supports available in home-based settings, including relatives, resource families, and other family-like placements.

This approach reflects what many providers, caregivers, and advocates have long understood: children do best when care is individualized, relationships are supported, and services are coordinated around the whole child.

How Tiers are Determined

Under TRS, a child or nonminor dependent’s tier is determined through the Integrated Practice-Child and Adolescent Needs and Strengths assessment, commonly known as IP-CANS. The IP-CANS is a functional assessment tool that helps identify a young person’s needs, strengths, experiences, and areas where support may be needed.

For Native children, the process also includes consultation, engagement, or collaboration with the child’s Tribe so that Tribal and cultural perspectives are reflected in understanding the child’s needs, strengths, case planning, services, and supports.

The tiers are designed to group children and youth according to assessed levels of need and support. While implementation details continue to develop, the overall framework includes four primary tier categories:

• Tier 1 (74% of children and youth): Tier 1 is generally intended for children and nonminor dependents with lower assessed levels of need. Youth in this tier will receive care and supervision funding, along with Strengths Building Funding, to support stability, daily care, and positive development.While Tier 1 may represent a lower level of assessed need compared to other tiers, it does not mean a child has no needs. Every child in care deserves stability, connection, and support that helps them grow.
• Tier 2 (19% of children and youth): Tier 2 is designed for children and nonminor dependents with more moderate or actionable needs. Youth in this tier may require additional support beyond standard care and supervision.In addition to care and supervision and Strengths Building Funding, children and nonminor dependents in Tier 2 may be eligible for Immediate Needs Funding. This funding is intended to help address needs that could become more complex if support is delayed.
• Tier 3 (4.5% of children): Tier 3 applies to children ages 0–5 with higher assessed needs. This category recognizes that very young children may experience significant developmental, behavioral, relational, or trauma-related needs that require timely and coordinated support.For young children, early intervention can be especially important. Responsive care during the earliest years can support emotional regulation, attachment, developmental progress, and long-term well-being.
• Tier 3+ (2.5% of children and youth): Tier 3+ applies to youth ages 6 and older with the highest and most complex assessed levels of need. Youth in this tier may require intensive coordination, trauma-informed care, behavioral health support, caregiver support, and other individualized services.The intent is to help youth with complex needs receive a higher level of support without automatically requiring movement into more restrictive or institutional settings.

Three Innovative Funding Categories

TRS includes three major funding components that work together to support a more holistic, person-centered approach to care.

1. Care and Supervision

Care and Supervision funding supports the daily care needs of a child or nonminor dependent. This includes the foundational support caregivers and providers need to help meet a young person’s day-to-day needs in a safe and stable environment.

Under TRS, the Care and Supervision rate is connected to the child or youth’s assigned tier.

2. Strengths Building and Maintenance

Strengths Building Funding is a new and important part of the rate structure. It is intended to support a child or youth’s interests, development, positive experiences, and personal growth.

This component reflects a meaningful shift in thinking. Children in foster care should not only be supported in response to trauma or crisis. They should also have opportunities to build confidence, explore interests, develop skills, and experience the kinds of positive childhood and adolescent experiences that support long-term resilience.

3. Immediate Needs

Immediate Needs Funding is available for eligible children and nonminor dependents in Tiers 2, 3, and 3+. This component is intended to help address more urgent or complex needs through timely, coordinated support.

High Fidelity Wraparound is expected to be a central service model within the Immediate Needs framework. High Fidelity Wraparound brings together youth, families, caregivers, natural supports, professionals, and community partners to develop and implement individualized care plans.

This kind of team-based approach is especially important when a child or youth’s needs cross multiple systems, such as child welfare, behavioral health, education, juvenile justice, regional center services, or other community supports.

Why This Matters

The Tiered Foster Care Rate Structure represents more than a change in payment methodology. It reflects a broader effort to better align resources with the real needs of children, youth, and families.

When support follows the child, rather than the placement, it becomes possible to strengthen family-based care, support kinship and community connections, and provide more individualized services earlier. This can help reduce unnecessary disruptions, support caregiver stability, and create more opportunities for children and youth to remain connected to the people and communities that matter to them.

For organizations like AFS, this shift aligns closely with our commitment to trauma-informed, family-centered, culturally responsive, and community-based care. It also reinforces the importance of coordinated services that look at the whole child—not only their challenges, but also their strengths, relationships, culture, identity, and future.

The Path to Implementation

Although the legislative framework for TRS is in place, the state is still in an implementation and preparation phase. Important work remains, including:

• Automation: Updating state data systems to handle the new rate functionality.
• Workforce Training: Ensuring social workers are trained to use the CANS assessment with fidelity to accurately identify a child’s tier.
• Service Capacity: Conducting a landscape analysis to ensure there are enough High-Fidelity Wraparound providers to meet the demand.

California is working towards a child welfare approach where children and youth can receive appropriate support in family-based and community-based settings whenever possible.

As implementation moves forward, child welfare agencies, probation departments, providers, caregivers, advocates, and community partners will all play an important role in helping translate this new structure into meaningful support for children and families.

AFS will continue monitoring updates and sharing information as California moves toward implementation. At every stage, our focus remains the same: helping children, youth, and families access the right support at the right time, in ways that promote safety, healing, stability, connection, and hope.