States and Congress should protect—not steal—foster children’s Social Security benefits

May is foster care awareness month. Federal and state leaders are right to focus attention on the most at-risk children in our society. Their top priority should be to take clear and firm steps to end state and local child welfare agencies' theft of foster children’s Social Security benefits.

Children placed in foster care face many challenges. From the circumstances that resulted in their placement in state care to the instability of growing up without the support of a traditional family, foster children face uncertain futures. For example, former foster youth are more likely to end up homeless and the Department of Health and Human Services (HHS) warns that foster children are also more likely to fall victim to human trafficking.

Helping children in foster care has been a longstanding federal policy priority. Altogether, the federal government spends about $12 billion on foster care and related child welfare programs, including more than $6 billion in payments through the Social Security Administration to fund states’ foster care expenses.

In the past, Congress passed laws and created programs to help foster youth with the challenging transition to adulthood. For example, a 2008 law attempted to help youth aging out of the foster care system by increasing the age at which benefits and foster care may be provided to age 21. Through the federal Chaffee foster care program, HHS provides more than $180 million annually in vouchers for former foster youth to access education, job training, and other services to help them with their transition to independence

But in other ways, federal and state policymakers contribute to the uncertain futures that some foster children face.  

Between 40,000–80,000 foster children are entitled to Social Security disability or survivor benefits. They are owed these benefits if their parent dies after paying taxes into the Social Security system or if they have a disability and qualify for the Supplemental Security Income program.

These funds can provide critical financial assistance for a child living in foster care. For example, eligible children can receive $800 per month or more in disability benefits. These monthly payments could be used to help foster children overcome their difficult life circumstances, pursue better educational opportunities, or to create a nest egg for when they must leave foster care as adults.

But, in many states, child welfare agencies routinely apply for and take foster children’s Social Security benefits and use that money to offset the tax dollars that the state would otherwise spend on their care. According to the Congressional Research Service, 38 states and the District of Columbia seized about $180 million in foster children's Social Security benefits in 2018.  (To see if your state has been taking foster children’s benefits, check out the Marshall Project’s website tracking state collections as of 2018.) A 2021 Government Accountability Office review of available data of Social Security benefits awarded to foster children found that state child welfare agencies were collecting the money in 81 percent of the cases.

Thankfully, some state and local lawmakers are ending this practice. The Children’s Advocacy Institute at the University of San Diego has been advocating for protecting foster children’s benefits and tracking reforms around the country. The institute reports that new laws and policies have been adopted in Nebraska, Connecticut, California, Oregon, New York City, Philadelphia, Los Angeles, and the District of Columbia. States considering new legislation or policies this year include Texas, Hawaii, Minnesota, Alaska, Massachusetts, Arizona, and Washington.

But Congress could end this practice once and for all. Last year, Rep. Danny Davis (D., Ill.) introduced the “Protecting Foster Youth Resources to Promote Self-Sufficiency Act.” The bill would expressly prohibit state child welfare agencies from taking foster children’s benefits to pay for their care.

Allowing foster children to receive federal benefits owed to them would provide critical funding assistance during the foster child’s difficult transition to adulthood, but also may lower government costs over the long term. Each former foster youth who succumbs to a bad life outcome will increase costs to society in other ways, as much as $300,000  according to one estimate. Increasing the number of former foster youth who successfully achieve independence would improve their lives and reduce other social services costs in the future.

There is a lot more that policymakers should do to help youth aging out of foster care, such as providing fostering independence accounts to pay for living expenses and providing education savings accounts for tutoring and enrichment. But protecting their Social Security benefits is a good place to start.