Subcommittee approves rule change to license kinship foster and adoptive homes, citing federal change and $3.9M impact

The Health and Healthcare Industry Subcommittee on Wednesday approved Regulation 5296 to create a separate licensure pathway for kinship foster and adoptive homes, a change Department of Social Services staff said will let the state draw down federal funds and provide monthly board payments to relatives who care for children in foster care.

Ann Ragley, chief external affairs director at the South Carolina Department of Social Services, told the panel the regulation is being updated to reflect a federal rule change in September 2023 and to “to make less burdensome regulations on kids actually. On on kin, kinship placements for children that are in the foster care system.”

The regulation would let kinship caregivers who meet licensure requirements — including FBI fingerprint background checks and home inspections — receive the same monthly board payments available to licensed foster parents. Ragley said the agency estimates about 520 children currently live in unlicensed kin placements; the fiscal estimate shown to the committee ranged up to roughly $3.9 million to implement the change.

Ragley said the change would not be an unfunded mandate because adopting the regulation and a corresponding statutory change would allow the agency to “draw down some federal dollars,” describing the federal match as roughly two federal dollars for each state dollar spent. She added the $3.9 million number reflects a scenario in which all currently unlicensed kin placements participate and that the General Assembly sets the monthly board rates by proviso.

Committee members asked about eligibility and timing. Ragley said the new pathway would generally apply going forward and would not make payments retroactive except in limited cases where a court order specifies an earlier effective date. She also said payments could begin as soon as the month after licensure and payroll processes are initiated.

Members raised practical concerns about adequacy of the monthly board payment for caregivers on fixed incomes and the administrative workload of licensing potentially hundreds of additional homes; Ragley said the agency factored additional staff and administrative costs into its fiscal estimate and noted the House had funded portions of the agency’s budget request.

The subcommittee recorded no named mover or seconder for the motion on the regulation; members voted verbally and the chair announced, “The ayes have it and so is ordered.” The committee also noted that a related bill, S.415, was pending in the Senate and scheduled for committee action the following day.

Why it matters: The change creates a path for relatives to receive state-paid board payments and federal matching funds while retaining background checks and home inspections designed to protect children. The policy affects kin caregivers, children in foster care, and DSS licensing operations.

Votes at a glance: Regulation 5296 — approved by voice vote; mover/second not recorded in the transcript.