The Create Accountable Respectful Environments for Children Act (CARE Act) amends part E of title IV of the Social Security Act to address shortages of appropriate foster homes. It creates an option for placing a foster child in cottage family homes and makes such homes eligible for foster care maintenance payments.
The bill also preserves state flexibility in how these homes are treated for funding and oversight, and adds a detailed definition of cottage family homes with safeguards to support siblings, trauma-informed care, and a family-style setting.
Key elements include a formal definition of cottage family homes, criteria intended to sustain family ties (including regular contact with the child’s family and siblings), and a commitment to a trauma-informed approach, age-appropriate activities, and safety safeguards (such as limits on bedroom occupancy and restrained practices). It also requires the Secretary to recognize cottage homes in state plans and clarifies that states may treat cottage homes similarly to traditional foster homes for purposes of funding and oversight.
The effective date is upon enactment, with a potential transition period if state legislation is needed to implement the changes.
At a Glance
What It Does
Adds cottage family homes as an eligible placement option under the foster care funding framework and requires state plans to recognize them. It also defines cottage family homes with a set of safeguards and sets allowances for maintenance payments.
Who It Affects
State child welfare agencies, licensed foster care providers, and families; foster children (especially those who could benefit from smaller, home-like environments and sibling placement).
Why It Matters
Addresses shortages in traditional foster placements by expanding options while prioritizing safety, trauma-informed care, and sibling connections, potentially improving placement stability and child well-being.
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What This Bill Actually Does
The CARE Act directly broadens the universe of places a foster child can be placed by adding cottage family homes as an eligible option under the federal foster care funding program. To qualify, cottage family homes must be licensed or approved by the state and meet a defined set of standards designed to keep the setting family-like and safe.
The new definition requires these homes to support ongoing connections to the child’s siblings and family, provide age-appropriate activities, and employ trauma-informed care practices.
The bill places a strong emphasis on keeping siblings together when possible. It envisions cottage homes that function like a single-family residence, with no more than two children per bedroom, and staff or live-in parents who follow a reasonable and prudent standard.
It also requires mechanisms for children to raise concerns and for the program to continuously solicit feedback from kids about the quality of care. In addition, the CARE Act preserves state flexibility: the secretary may not block a state’s decision to treat a cottage family home as a foster home if that serves the child’s best interests, and states can determine how to implement these homes within their existing plans.For funding and payments, the bill extends eligibility for foster care maintenance payments to cottage family homes, aligning financial support with these new placement options.
It also sets a transitional path for implementation, including an effective date tied to enactment and a potential six-month delay if state legislation is required beyond federal action. Overall, the legislation aims to reduce the shortage of suitable foster homes, improve the placement stability of children, and support families and siblings by expanding a safe, home-like option.
The Five Things You Need to Know
The bill adds cottage family homes as an eligible foster placement.
Foster care maintenance payments are extended to cottage family homes.
A detailed, multi-part definition of cottage family homes is established (licensing, trauma-informed care, sibling placement, activities, safety, etc.).
The Secretary must recognize cottage homes in state plans and must respect state flexibility.
Effective date is upon enactment with a possible 6-month delay if state law is required to implement the changes.
Section-by-Section Breakdown
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Placement of foster children in cottage family homes
Section 2(a) expands the set of approved foster placements to include cottage family homes by inserting “or a cottage family home” into existing terminology (471(a)(37)). Section 2(b) extends eligibility for foster care maintenance payments to cottage family homes by inserting the cottage family home phrase before “with a parent” in 472(a)(2)(C). Together, these changes create a funded, formal pathway for placing children in cottage settings when appropriate.
Definition and safeguards for cottage family homes
Section 2(c) defines a cottage family home and sets explicit criteria, including licensing/approval by the state, support for sibling connections, capacity limits (no more than two children per bedroom except where best interests dictate otherwise), and the use of trauma-informed care. The definition also requires opportunities for age-appropriate activities, systems for children to report concerns, continuous quality improvement based on youth input, live-in caregivers under a reasonable and prudent standard, and avoidance of seclusion or restraints (except as policy allows short-term use to prevent injury). These provisions are intended to ensure a home-like, supportive environment while maintaining safety and oversight.
State flexibility and recognizing cottage homes
Section 2(c)(B) preserves state flexibility by prohibiting the Secretary from blocking, limiting, or penalizing a state’s determination to treat a cottage family home as a foster home or to designate an entity as a cottage family care home, so long as doing so serves the child’s best interests. This preserves state autonomy to implement the cottage home model within existing state plans and funding structures.
Payments, transition, and effective date
Section 2(d) clarifies that cottage family homes are eligible for foster care maintenance payments but does not impose a separate or time-limited payment model beyond the general schedule for foster care payments. Section 2(e) establishes the Act’s effective date and provides a transition period if state legislation is required for implementation, delaying some requirements for up to six months after enactment.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Foster children, especially those who benefit from stable sibling placements and a home-like environment with trauma-informed care
- Licensed child care agencies and foster providers operating cottage homes under a clear regulatory framework
- State and local child welfare agencies that gain additional placement options to meet safety, bonding, and permanency goals
- Parents and families seeking to maintain connection with a child through regular contact and shared activities
- Advocacy groups and community organizations focused on child well-being and protection
Who Bears the Cost
- State governments may incur costs related to licensing, monitoring, and training to establish cottage homes
- Foster care agencies may face upfront costs to establish cottage homes and implement new reporting and quality improvement processes
- Courts, inspectors, and regulatory bodies may need to allocate resources for oversight of the new placement type
- Federal and state budgetary pressures from expanded maintenance payments to cottage homes
- Localities with varying capacity to license and supervise cottage family homes may experience transitional challenges
Key Issues
The Core Tension
Balancing the push to expand safe, family-like foster placements with the need for uniform safeguards, adequate funding, and reliable implementation across diverse states is the bill’s central dilemma. The cottage homes model promises improved sibling placement and consistent care, but it introduces complexity in licensing, oversight, and funding that must be managed to prevent variability in care quality.
The CARE Act introduces a potentially transformative expansion of foster care placements, but it also raises tensions that require attention. By creating a cottage family home category, it invites more small, home-like settings into the foster system, which could improve stability and reduce disruption for siblings.
However, it also adds new licensing, oversight, and reporting requirements for state agencies and providers, potentially increasing administrative burdens and costs during the transition. The emphasis on a trauma-informed approach, continuous quality improvement, and child feedback is a strength, but implementing consistent standards across states and providers may prove challenging.
The interaction with existing funding streams and the pace at which states can align their plans will be critical to achieving the intended benefits.
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