In Michigan, foster parents receive a daily reimbursement from the state rather than a salary. As of October 1, 2024, the base rate is $22.35 per day for children ages 0 through 12 and $26.69 per day for teenagers ages 13 through 18, set by the Michigan Department of Health and Human Services (MDHHS) under Policy FOM 905-3.1Michigan Department of Health and Human Services. FOM 905-3 Foster Care Rates Those base rates can climb substantially once a child’s behavioral, medical, or emotional needs are factored in, and clothing, birthday, holiday, and respite payments come on top.
The Base Daily Rate
MDHHS pays foster care maintenance on a biweekly schedule. The current daily rates work out to:
- Ages 0–12: $22.35 per day, or $312.90 per biweekly pay period
- Ages 13–18: $26.69 per day, or $373.66 per biweekly pay period
Across a full 30-day month, that comes to roughly $670.50 for a younger child and about $800.70 for a teenager. Each daily rate is built from three pieces: room and board, personal incidentals and allowance, and clothing. Inside the $22.35 rate for younger children, for example, $16.96 covers room and board, $3.68 covers personal incidentals, and $1.71 covers daily clothing costs.1Michigan Department of Health and Human Services. FOM 905-3 Foster Care Rates
The rates apply the same way whether the caregiver is a licensed relative (kinship) foster parent or a non-relative. Federal law requires licensed or approved relative foster homes to receive the same payment as non-relative foster homes.2State of Michigan Department of Health and Human Services. FOM 903-03 Payment for Foster Family/Relative Care
Extra Pay for Higher-Needs Children
Children with greater behavioral, medical, or emotional needs qualify for additional daily pay through Michigan’s Difficulty of Care (DOC) system. A caseworker scores the child on form DHS-0470, and that score sets one of four supplemental levels added to the base rate:1Michigan Department of Health and Human Services. FOM 905-3 Foster Care Rates
- Level I (score 11–50): $5.00 per day
- Level II (score 51–90): $10.00 per day
- Level III (score 91–170): $15.00 per day
- Level IV (score above 170): a negotiated rate of up to $150.00 per day
A foster parent caring for a 10-year-old at DOC Level III would receive $22.35 plus $15.00, or $37.35 per day, roughly $1,120 per month. Level IV, reserved for the most intensive needs, can push the daily total much higher. Caseworkers reassess DOC levels periodically so the payment tracks the child’s current needs.
Serious Emotional Disturbance Waiver
For a child diagnosed with a serious emotional disturbance who might otherwise need inpatient psychiatric care, Michigan offers a separate daily supplement through the Serious Emotional Disturbance Waiver (SEDW). It funds home and community-based services as an alternative to hospitalization.3Michigan Department of Health and Human Services. Serious Emotional Disturbance Waiver Job Aid The daily amounts, added on top of the standard maintenance rate:2State of Michigan Department of Health and Human Services. FOM 903-03 Payment for Foster Family/Relative Care
- Ages 0–12: $32.76 per day, for a combined total of $55.11 per day
- Ages 13–18: $29.41 per day, for a combined total of $56.10 per day
For a younger child, that combined rate comes to about $1,653 per month, more than double the standard maintenance alone. Eligibility runs through the child’s Community Mental Health Services Program, and SEDW services start only once the child is placed in a community setting, not while in a residential facility.3Michigan Department of Health and Human Services. Serious Emotional Disturbance Waiver Job Aid
Clothing, Birthday, and Holiday Payments
Michigan pays a semi-annual clothing allowance on top of the small daily clothing amount already built into the maintenance rate. As of October 2024:4Michigan Department of Health and Human Services. FOB 2024-017 Fiscal Year 2025 Foster Care Rates
- Ages 0–12: $157 twice per year, or $314 annually
- Ages 13–18: $172 twice per year, or $344 annually
A $25.00 birthday allowance goes out during the child’s birth month, and a $50.00 holiday allowance is paid once per year. Both are disbursed automatically through the standard payment system once the placement is confirmed in the state database.
Payments for Young Adults Ages 18 to 21
Michigan’s Young Adult Voluntary Foster Care Act lets youth who turn 18 stay in foster care through age 21 if they choose.5Michigan Legislature. Young Adult Voluntary Foster Care Act, Act 225 of 2011 To stay eligible, the young adult generally needs to be enrolled in school or a training program, employed, or have a documented medical condition that limits participation in those activities.
Caregivers housing a young adult in this program continue to receive the age 13–18 daily rate of $26.69, plus any DOC supplement that applies.
Respite and Childcare Help
Foster parents can use up to 12 days of respite care per quarter for each eligible child, choosing either a licensed or unlicensed respite provider. The provider is paid by the state under a separate MDHHS policy (FOM 903-09).6Michigan Department of Health and Human Services. SRM 109 Respite Services and Engagement
Foster parents who work outside the home can apply for childcare payment help through Michigan’s Child Development and Care (CDC) program using the MI Bridges portal.7State of Michigan. Child Care Assistance Foster care payments the child receives generally do not count against household income for that subsidy.
How and When the Money Arrives
Payments are made by Electronic Funds Transfer directly to the foster parent’s bank account. Enrollment goes through the MDHHS provider payment system.8State of Michigan. Child and Adult Provider Payments Deposits arrive biweekly on the department’s published tentative check dates.1Michigan Department of Health and Human Services. FOM 905-3 Foster Care Rates
Because everything is calculated daily, the exact deposit reflects the number of days the child was in the home during that pay period. Placements that start or end mid-cycle prorate automatically. Keep your own records of placement dates and payments received.
Are These Payments Taxed?
Under federal law, qualified foster care payments, including both the daily maintenance rate and DOC supplements, are excluded from gross income and not subject to federal income tax.9Office of the Law Revision Counsel. 26 USC 131 Certain Foster Care Payments Michigan follows the same rule, and the Michigan Department of Treasury confirms foster care payments are generally not subject to Michigan income tax either.10State of Michigan Treasury. Is Foster Care Income Taxable?
There are narrow situations where a foster parent may receive a W-2 or 1099 for certain payments, and those amounts would be taxable to the extent they show up in adjusted gross income.11Michigan Department of Health and Human Services. FOM 903-01 Payment Overview – Children’s Foster Care Manual The federal exclusion also has caps: for foster individuals who have turned 19, only payments for up to five such individuals per home can be excluded, and Difficulty of Care payments have a separate cap of ten individuals under age 19 and five age 19 or older.9Office of the Law Revision Counsel. 26 USC 131 Certain Foster Care Payments MDHHS recommends checking with a tax advisor for anything specific to your household.
Working foster parents may also qualify for the federal Earned Income Tax Credit by claiming a foster child as a qualifying child, provided the child was placed by a government agency, tribal government, tax-exempt licensed organization, or court order, and lived with you more than half of the tax year. Because maintenance payments are excluded from gross income, they do not count as earned income for the EITC calculation, but wages and self-employment income do.12Internal Revenue Service. Qualifying Child Rules