Kentucky kinship-care regulations draw concern over funding, timing and federal eligibility

The Department for Community Based Services on Tuesday presented administrative rules to implement Senate Bill 151, the 2024 law expanding kinship-care options, but caregivers and several lawmakers urged changes they say are needed to preserve federal funding and protect caregivers.

Commissioner Lisa Dennis told the subcommittee the regulation "puts everything in place for implementation once that funding is in fact allocated," and that the department has reached out to federal partners about funding availability. "We have the response in writing," Wesley Duke, general counsel for the cabinet, said, adding the cabinet believes federal funds are not available now and that the cabinet will share correspondence with the committee.

Norma Hatfield, president of the Kinship Families Coalition of Kentucky and a grandmother raising two grandchildren, urged the committee not to approve the regulation as drafted. She said the proposal shifts the start of a 120-day window from "placement" to "temporary custody," which she warned could cause families to waive federal fund eligibility before they can give informed consent. "This is not a decision taken away from a caregiver. It is a decision that protects the state and protects the kids," Hatfield said, arguing the current draft would forfeit possible federal matching dollars and inflate the state's projected price tag.

Hatfield pointed to the cabinet's financial estimate included with the rule package — a $14,700,000 price tag under the department's proposed design — and said that, with a federal match, the state's share could fall substantially. "Structured to preserve federal eligibility, we can drop that down to Kentucky share of 4.3 [million], assuming the same numbers," she said.

Republican committee members expressed frustration that two years have passed since the statutory change. One lawmaker said the regulation appeared to insert conditional language tied to future budget appropriation, a placement the law’s sponsors had not expected. "A bill that passed out of the general assembly unanimously" in 2024, the lawmaker said, "shouldn't be two years later with regulations that put conditions back in the way."

The cabinet told the committee it has an on-the-record response from federal partners that federal funds are not currently available and said it will provide that correspondence to the committee. Committee members asked the cabinet to continue working closely with the legislature on fiscal implications and implementation timelines as budget deliberations continue.

The committee did not adopt the regulation in final form during the meeting; members debated a deficiency motion and requested the cabinet share its written communications with federal partners before further action.

What happens next: committee members requested the cabinet provide its written federal correspondence and additional fiscal detail. The item was left with further committee follow-up tied to the budget process.