Millions of dollars meant for kids in foster care may soon be returned to them. Governors in 39 states have been alerted by federal officials to the fact that Social Security benefits meant for foster children were used to pay for state foster care expenses, despite the fact that the child is legally entitled to these benefits. The funds at issue include Social Security survivor benefits, disability payments, and Supplemental Security Income (SSI). In many cases, state child welfare agencies applied to become the child’s “representative payee,” which allowed them to manage the money.
Critics say that instead of saving these benefits for a child’s long-term needs, some states used the cash to pay for services they are already required to provide. Now, those states may be required to reimburse the benefits and change their policies going forward.
For thousands of current and former foster youth, this could mean access to money that supports education, housing, health care, or basic living costs as they enter adulthood.
The rules, the warnings, and the reality
At the heart of the issue is legal ownership. The law states that Social Security and SSI benefits paid to foster children are theirs. When states become the child’s “representative payee,” they are supposed to act in the child’s best interest, which means using funds for immediate needs and conserving the rest.
However, governors have been formally informed by federal authorities—including the Administration for Children and Families within the U.S. Department of Health and Human Services—that current practices in 39 states could be violating the purpose and spirit of Social Security regulations.
Any money that a foster child doesn’t need immediately for care, should be saved for their future.And for young people in foster care, these funds can be a lifesaver when they get to adulthood and need to pay rent, stay in school, or cover medical care.
Advocates say using children’s benefits to “reimburse” state costs is equivalent, in practice, to foster kids paying for their care—care the state is obligated to pay for, to begin with. The warnings raise the possibility that states will fix their policies and repay benefits that were previously diverted.
Real lives at stake
According to earlier estimates, many states may have stolen hundreds of millions of dollars in Social Security and SSI benefits from foster children over time. Now, states may be subject to significant liabilities if reimbursement is necessary. But in this case, thousands of foster children, may at last receive money intended for them all along—savings that can support their initial transitions into adulthood.
Some jurisdictions have already changed course. Idaho, for example, ended the practice of routinely diverting Social Security benefits for foster care minors. Now they demand that those funds be used only for unmet needs and that they be preserved for the child’s future whenever possible. Federal authorities have pointed out these reforms as a model for changes at the national level.
Former foster children claim that the loss of benefits had a long-lasting impact on their transition to adulthood; among them is NFL player Scott Matlock, who has openly discussed the importance of ensuring foster children receive every dollar to which they are entitled.
What could change next
More states could start following Idaho’s model, and guarantee that decisions are made with the child’s best interests in mind. But while this changes arrive, children’s benefits would finally be used as intended if states are compelled to reimburse foster children and reform their systems.
The goal is that foster children own these advantages—that are already supposed to be theirs—so they can grow up with more opportunities, security, dignity, and support.