Foster parents in Texas get paid a daily reimbursement that depends on the level of care a child needs. Under the state’s new Texas Child-Centered Care (T3C) rate system, the pass-through payment to a foster family starts at $46.90 per day (about $1,407 a month) for basic care and climbs to $139.58 per day (about $4,187 a month) for treatment-level foster family care. On top of the daily rate, the child receives Medicaid through STAR Health, the payments are excluded from your federal taxable income, and eligible foster youth qualify for a Texas tuition waiver and federal education vouchers.
How the Daily Rate Is Set
The Texas Department of Family and Protective Services (DFPS) assigns each child a service package based on assessed needs. A child who needs only basic supervision falls into the lowest-paying tier. A child with serious behavioral health needs, a developmental disability, complex medical needs, or a trafficking history qualifies for a package with a much higher daily rate.
Texas is in the middle of replacing its older Level of Care system with T3C. The transition began in January 2025 and is expected to run through August 2027, so some homes are already on T3C rates while others still receive legacy payments.1Department of Family and Protective Services. Texas Child-Centered Care (T3C) Transitioning Your Child Placing Agency (CPA) or local DFPS office can tell you which rate applies to a placement.
One thing to understand up front: the total daily rate the state pays is split between the CPA and the foster family. The portion you actually receive is called the pass-through. For basic care, the full methodological rate is $83.29, of which the CPA keeps $36.39 to fund case management, training, respite coordination, and compliance work, and the foster family receives $46.90.
Current T3C Daily Pass-Through Rates
These are the daily amounts a foster family receives under T3C for each primary service package:2Texas Department of Family and Protective Services. Texas Child-Centered Care (T3C) Foster Care Methodological Rates
- Basic Foster Family Home Support: $46.90 per day
- Substance Use Support: $59.57 per day
- Mental and Behavioral Health Support: $59.57 per day
- Short-Term Assessment Support: $73.18 per day
- Sexual Aggression/Sex Offender Support: $90.78 per day
- Intellectual/Developmental Disability or Autism Support: $90.78 per day
- Complex Medical or Medically Fragile Support: $93.27 per day
- Human Trafficking Victim/Survivor Support: $100.21 per day
- Treatment Foster Family Care Support: $139.58 per day
Monthly, that runs from roughly $1,407 to $4,187 depending on the package. Certain children also qualify for add-on payments. Transition Support Services for Youth and Young Adults adds $26.12 per day, and Pregnant and Parenting Youth Support adds $26.28 per day to the foster home’s pass-through.2Texas Department of Family and Protective Services. Texas Child-Centered Care (T3C) Foster Care Methodological Rates
Legacy Rates During the Transition
Families still on the older Level of Care system receive lower daily rates that have not changed since September 2017:3Cornell Law Institute. 40 Tex Admin Code 700-1753 – Rate-Setting Methodology for 24-Hour Residential Child-Care Reimbursements
- Basic: $27.07 per day
- Moderate: $47.37 per day
- Specialized: $57.86 per day
- Intense: $92.43 per day
The stagnation of those rates was part of the legislature’s reason for authorizing T3C. If you are on legacy rates, expect to move to T3C before the rollout closes in 2027. At the basic level, the shift raises the daily payment from $27.07 to $46.90.1Department of Family and Protective Services. Texas Child-Centered Care (T3C) Transitioning
When the Payment Arrives
DFPS processes foster care invoices on the 3rd of the month after care was provided, and payments are mailed no later than the 15th of that month. If the 15th falls on a weekend or holiday, the payment goes out on the preceding business day.4Department of Family and Protective Services. 1560 Managing Children’s Funds Care provided in March, then, is paid in April.
The lag has practical consequences. When a child is first placed, you won’t see a reimbursement until the following month, and the processing schedule can push the wait to several weeks. Foster parents working through a CPA may see a different method or timing, so confirm the details with your agency. Either way, plan on covering the child’s first few weeks yourself.
Healthcare Is Covered Separately
Children in DFPS conservatorship get Medicaid through the STAR Health managed care program. STAR Health covers doctor and dentist visits, prescriptions, hospital care, vision and hearing, lab work, specialist referrals, mental health treatment, and care for pre-existing conditions. It also includes a 24/7 nurse hotline and the Health Passport electronic health record.5Texas Health and Human Services. STAR Health
In practice, foster parents pay nothing out of pocket for a child’s medical, dental, or behavioral health care. Therapy, medication, and specialty treatment do not come out of the daily stipend.
The Payments Are Not Taxable Income
Foster care payments from a state or its agencies are excluded from your gross income under federal law, so you do not report the daily reimbursement (or difficulty-of-care payments for higher-needs children) as taxable income.6Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments
A foster child who meets the IRS definition of a qualifying child can also qualify you for the Child Tax Credit, worth up to $2,200 for 2025 with up to $1,700 refundable. The child must be under 17, live with you for more than half the year, and be claimed as your dependent.7Internal Revenue Service. Tax Benefits for Parents and Families The 2026 amount may change under scheduled federal adjustments, so check current IRS guidance for the filing year that applies to you.
If you pay for childcare so you can work, foster children in your home can count toward the Child and Dependent Care Credit, which covers up to 35% of qualifying expenses (capped at $3,000 for one child and $6,000 for two or more).8Internal Revenue Service. Publication 503 (2025) Child and Dependent Care Expenses Foster parents who go on to adopt a child from care can claim the Adoption Tax Credit, worth up to $17,280 per eligible child for 2025 and partially refundable up to $5,000.7Internal Revenue Service. Tax Benefits for Parents and Families
Education Benefits for the Child
Texas Tuition and Fee Waiver
Texas waives tuition and mandatory fees at state-supported colleges and universities for eligible current and former foster youth. A young person qualifies if they were in DFPS conservatorship on the day before their 18th birthday, or on their 14th birthday if eligible for adoption on or after that date, among other qualifying scenarios.9Department of Family and Protective Services. State College Tuition Waiver
The student must enroll before turning 27. Youth adopted from DFPS care who have an adoption assistance agreement face no age limit for enrollment. The waiver does not cover room, board, or books.
Education and Training Vouchers
The federal Education and Training Voucher (ETV) program provides grants of up to $5,000 per academic year to current and former foster youth in postsecondary education or vocational training.10Office of the Law Revision Counsel. 42 USC 677 – John H Chafee Foster Care Program for Successful Transition to Adulthood In Texas, DFPS administers the program through BCFS Health and Human Services. ETV funds can cover the full cost of attendance, including room, board, books, supplies, and personal expenses; when the tuition waiver already handles tuition, the ETV money stretches further toward those other costs.11Texas Children’s Commission. Frequently Asked Questions About the Education and Training Voucher ETV awards do not have to be repaid.
One boundary worth naming: fostering in Texas is not intended to be a source of household income. The daily rate is a reimbursement for the cost of caring for a child, and the tax exclusion, healthcare coverage, and education benefits all sit inside that same purpose. The financial picture is real, and for higher-needs placements it is substantial, but it is calibrated to the child’s care rather than to the parent’s earnings.