How Much Do Foster Parents Get Paid in Indiana?

The short answer: Indiana foster parents receive a daily per diem that ranges from $27.01 to $78.41 per child, depending on the child's age and the level of care they need. But the real answer is more layered than a single number, and misunderstanding how foster care payments work in Indiana is one of the most common reasons new families feel blindsided during their first placement.

Indiana's Department of Child Services (DCS) classifies foster care reimbursement as exactly that -- reimbursement, not income. The per diem is designed to cover the child's daily needs: food, clothing, shelter, transportation, and activities. DCS expects you to meet your own household expenses without relying on foster care payments, and your financial stability is verified during the licensing home study.

That said, the payment structure is detailed and includes several categories most prospective parents never hear about until after their first child is placed.

Indiana Foster Care Per Diem Rates: 2025-2026

DCS publishes updated per diem rates annually. The rates are tiered by both the child's age and the "category of supervision" -- essentially how intensive the child's care needs are. Here are the current rates:

Standard Foster Care

Foster Care with Services

Therapeutic Foster Care

Therapeutic Plus

For a standard placement of a 7-year-old, the monthly reimbursement works out to roughly $880-$920 in 2026. A therapeutic placement of a teenager can reach $1,600-$2,400 per month. The category of supervision is determined by DCS based on the child's assessed needs, not by the foster parent.

Beyond the Per Diem: Additional Allotments

The daily rate is not the only financial support available. Indiana provides several supplemental payments that many families overlook or fail to claim:

Initial Clothing Allotment. When a child is first placed in your home, you can receive up to $200 for clothing and personal items. This must be requested within the first 60 days of initial placement. Children often arrive with little more than what they are wearing, so this allotment matters.

Personal Allowance. After eight days of placement, each child is eligible for up to $300 per calendar year for hobbies, extracurricular activities, or personal items. This covers things like soccer registration, art supplies, or school dance tickets.

Special Occasion Allowance. DCS provides $50 for a child's birthday and $50 for the winter holiday season. These are separate from the personal allowance.

Travel Reimbursement. Foster parents who transport children to visits with biological parents, medical appointments, or court hearings can claim mileage reimbursement. The rate follows the state's standard mileage policy.

Respite Care Pay. If you provide respite care for another foster family's child, you are reimbursed at the daily per diem rate for that child's category of supervision.

How KidTraks Works (and Why It Matters)

All foster care payments in Indiana are processed through KidTraks, the state's financial and referral portal. This is where you submit invoices for per diem payments, clothing allotments, and other reimbursements.

KidTraks is the single biggest source of frustration for Indiana foster parents. The system is functional but unforgiving -- a minor formatting error on an invoice can result in rejection and weeks of delay. Common issues include:

• Submitting clothing allotment requests after the 60-day window
• Entering incorrect dates for placement changes
• Failing to document receipts for supplemental allotments
• Not understanding which category of supervision applies to a specific child

The first per diem payment typically takes 30 to 60 days after the child is placed. After that, payments should arrive on a regular monthly cycle -- but only if your invoices are submitted correctly and on time.

If you are licensing through a Licensed Child-Placing Agency (LCPA) rather than directly through DCS, your agency may handle some KidTraks submissions on your behalf. Ask about this during your orientation.

What the Per Diem Actually Covers

DCS expects the per diem to cover the following categories of expense for each child:

• Food and nutrition -- meals, snacks, dietary needs
• Clothing -- beyond the initial allotment, ongoing clothing needs come from the per diem
• Shelter -- a proportional share of housing costs (utilities, room space)
• Transportation -- routine transportation to school, activities, and appointments
• Personal care -- toiletries, haircuts, hygiene products
• Recreation -- age-appropriate activities and entertainment
• School supplies -- basic educational materials

Medical expenses, therapy, and specialized services are covered separately through Indiana Medicaid (known as Hoosier Healthwise for children in foster care). You should not be paying out of pocket for a foster child's medical or dental care.

Tax Implications for Indiana Foster Parents

Foster care per diem payments are generally not considered taxable income under IRS guidelines. The payments are classified as reimbursement for the care of a qualifying individual, and most foster families do not owe federal income tax on them. However, you may need to report the payments if they exceed certain thresholds, and tax rules can change.

Indiana foster parents may also qualify for the federal adoption tax credit if a foster placement transitions to adoption. Consult a tax professional familiar with foster care situations -- this is one area where generic tax advice often falls short.

Licensed vs. Unlicensed Kinship Care: The Pay Gap

If you are a relative who has taken in a family member's child through a DCS removal, the difference between becoming licensed and staying unlicensed is significant:

• Licensed kinship caregivers receive the full foster care per diem (same rates as any other licensed foster home)
• Unlicensed kinship caregivers may only receive limited assistance through the Kinship Indiana Support Services program, which pays substantially less

The licensing process for kinship caregivers follows an expedited track with immediate background checks and a home safety visit. If you are a relative considering whether the extra paperwork is worth it, the financial math is straightforward -- licensing can mean the difference between $200 and $900 per month.

Is Foster Parenting in Indiana Financially Viable?

The per diem is not designed to make you money. For most Indiana families, the foster care payments cover the direct costs of the child's care and leave little surplus. If you are fostering a teenager with standard needs, the $34.90 daily rate (2026) works out to roughly $1,060 per month -- which is close to what it actually costs to feed, clothe, and transport a teenager.

Where the math gets harder is childcare. Indiana's average cost of infant care exceeds $1,200 per month. If you are a working foster parent with a young placement, the per diem may not cover daycare, and the state's childcare voucher system has faced a waitlist of 35,000 families. DCS does prioritize foster families for voucher slots, but navigating this system requires persistence.

The Indiana Foster Care Licensing Guide breaks down the full financial picture -- including how to maximize every allotment, avoid KidTraks errors, and access childcare vouchers -- so you know exactly what to expect before your first placement arrives.

Planning for the Real Costs

Foster parenting in Indiana is financially manageable when you go in with clear expectations. The per diem covers the basics. The supplemental allotments help with the extras. But the system does not hand you a check and say "figure it out" -- every dollar requires documentation, correct submissions, and patience with government timelines.

Knowing the exact rates, understanding KidTraks, and claiming every allotment you are entitled to is the difference between feeling financially strained and feeling financially prepared. The families who struggle most are the ones who start with incomplete information about what they will actually receive and when.

If you are still in the research phase, the Indiana Foster Care Licensing Guide includes printable KidTraks checklists, allotment claim templates, and a month-by-month financial planning worksheet designed for Hoosier foster families.

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