Kentucky foster parents receive a tax-free daily reimbursement that comes out to roughly $723 to $855 per month for a child in standard care, with the exact amount tied to the child’s age and the foster parent’s approval level. Children with behavioral or medical needs bring higher rates, and the state pays separate reimbursements for things like an initial wardrobe, birthday and Christmas gifts, and graduation costs. Payments are issued monthly and are not counted as taxable income.
Standard Monthly Rates
Kentucky pays a daily per diem rather than a flat monthly check. Under the schedule effective January 1, 2024, the standard rates are:1JIT Kentucky. DCBS Reimbursement List
- Birth through age 11, basic approval: $24.10 per day, about $723 per month
- Birth through age 11, advanced approval: $26.40 per day, about $792 per month
- Age 12 and older, basic approval: $26.20 per day, about $786 per month
- Age 12 and older, advanced approval: $28.50 per day, about $855 per month
A “child-specific” foster home, meaning a home approved for one particular child, is paid at the basic foster home rate as of January 2024.2Kentucky Cabinet for Health and Family Services. PPTL 24-01 SOP 12.24 Per Diem Rates
These figures reflect the most recently published schedule. Rates are adjusted periodically, so confirm current amounts with your local Department for Community Based Services (DCBS) office.
What the Per Diem Is Meant to Cover
The daily rate is comprehensive by design. It covers housing, utilities, food, school supplies and fees, non-medical transportation, clothing, hair care, personal allowances, toiletries and first-aid supplies, routine babysitting, respite care, and recreational activities like sports, dance, band, church programs, camp, and school pictures.1JIT Kentucky. DCBS Reimbursement List
The state also sets minimum monthly amounts foster parents must spend from the per diem on clothing, personal spending money, and incidentals, with those minimums rising as the child gets older. Read the per diem as the budget itself, not extra income on top of expenses. Medical care sits outside the per diem: every child in foster care is covered by Medicaid through the Supporting Kentucky Youth (SKY) program, with no copays or deductibles for foster parents.3KY Thriving Families. Foster Youth
How Approval Level Changes the Pay
The gap between “basic” and “advanced” pay reflects training and experience. Every new foster parent starts at basic after completing pre-service training and initial approval. Moving to advanced requires two years of fostering experience plus 30 hours of additional training covering trauma-informed care, behavioral management, psychotropic medications, and sexual abuse awareness.4Kentucky Cabinet for Health and Family Services. Kentucky Foster Parent Handbook
In practical terms, moving from basic to advanced adds about $2 to $2.30 per day, or roughly $60 to $70 per month per child. A third level, “degreed,” is reserved for medically complex placements and requires a professional degree such as an RN or MD.
Higher Rates for Care Plus and Medically Complex Placements
Children with elevated behavioral, emotional, or developmental needs are placed in Care Plus homes. Children who need skilled daily care for significant medical conditions go into medically complex homes. Both tiers pay considerably more than standard care:1JIT Kentucky. DCBS Reimbursement List
Care Plus
- Basic approval: $42.40 per day, about $1,272 per month
- Advanced approval: $47.70 per day, about $1,431 per month
Medically Complex
- Basic approval: $42.40 per day, about $1,272 per month
- Advanced approval (two years of experience required): $47.70 per day, about $1,431 per month
- Degreed approval (RN, MD): $50.90 per day, about $1,527 per month
A “specialized medically complex” tier sits above the standard medically complex level for children with the most intensive care needs and carries the highest reimbursement rates in the system.
Reimbursements Outside the Daily Rate
Several one-time and recurring payments sit on top of the per diem:1JIT Kentucky. DCBS Reimbursement List
- Initial clothing allowance when a child arrives without adequate clothing, authorized by the field office social worker based on need
- Christmas gift reimbursement of $60 per child
- Birthday gift reimbursement of $25 per child
- Up to $650 for senior-year graduation expenses, including cap and gown, senior pictures, class ring, prom, yearbook, and class trips
- Lifebook materials: $70 in start-up funds during the first six months after removal, then $25 every six months for maintenance (a Lifebook is a scrapbook-style record that helps foster children preserve memories and personal history)
Kinship and Fictive Kin Placements
Relatives and fictive kin (close family friends with an established relationship to the child) who become licensed foster parents receive the same per diem as non-relative foster homes, starting at $24.10 per day for a younger child.5JIT Kentucky. Kentucky Kinship – DCBS
Kinship placements also receive a one-time placement support benefit of $350 per child, up to six children, which helps cover the cost of getting set up quickly when a placement happens on short notice. Kinship foster parents also have access to child care, respite care, medical coverage, and foster and adoptive mentors. Unlike other foster parents, relatives and fictive kin are not required to complete yearly ongoing training unless their home holds a Care Plus or medically complex designation.6Kentucky Cabinet for Health and Family Services. C9.16 Ongoing Training
Are Foster Care Payments Taxable?
No. Under federal law, qualified foster care payments made by a state or its agencies are excluded from gross income entirely.7Office of the Law Revision Counsel. 26 USC 131 – Certain Foster Care Payments That covers the standard per diem and “difficulty of care” payments for children with physical, mental, or emotional needs, which is how Kentucky’s Care Plus and medically complex rates are treated. You don’t report these payments on your tax return.
The exclusion is capped at 10 foster children under 19 and 5 who are 19 or older, which won’t affect most families. Foster parents can also claim a foster child as a dependent for tax credit purposes if the child lived in the home more than half the year. A newborn discharged from the hospital directly to a foster home during the year counts if the placement runs through December 31 without interruption.
When and How You Get Paid
Payments are issued monthly. Foster parents must submit an invoice by the 5th of each month to receive reimbursement.1JIT Kentucky. DCBS Reimbursement List The state strongly encourages setting up direct deposit before the first payment is issued; a Key Bank debit card is available as an alternative. Address changes and banking updates should go to your billing specialist right away to avoid delays. The KY TWIST Payments Portal, accessed through a Kentucky Online Gateway (KOG) account, lets you review and print payment statements online.