This paper examines the role that public policy and practice play in supporting the efforts of natural, adoptive, and foster families who have children and youth with disabilities in keeping their families intact. Obstacles and barriers to implementing the philosophy of permanence planning, especially for children and youth with disabilities, are discussed. The paper: (1) describes programs sponsored by various state and private agencies that have overcome these barriers; (2) reviews Illinois expenditures in family support, showing that there is a need to increase fiscal and program effort; (3) discusses services for children and youth who are removed or placed out of their natural homes, but for whom adoption, foster care, or other alternatives to institutional care have not been made available; (4) contends that the state's extensive use of out-of-home placements not only works against the goals of permanence planning, but diminishes the state's ability to fund supports and services that would enhance the ability of families to keep children at home; (5) outlines concerns related to the risk of child abuse in out-of-home placements versus the risk of abuse in family homes; and (6) offers excerpts from state reports on government-funded residential facilities that provide residential services and active treatment for persons under 22 years of age. Fifteen recommendations for Illinois policy development are presented. Appendices contain an annotated bibliography, a list of licensed children's facilities, and descriptions of deficiencies cited in surveys of state facilities. (Contains 48 references.) (JDD)