Millions in Social Security money tied to foster children are now under review after federal officials warned that states may have taken funds that legally belonged to kids, not the system. Survivor benefits, disability payments, and SSI checks meant to follow the child were instead routed into state budgets to cover foster care costs already required by law.
That alert landed on the desks of governors in 39 states. The message was direct: current practices around Social Security benefits and foster care may break federal rules, and reimbursement is now on the table. For thousands of young people, this could finally mean access to money that should have been waiting for them all along.
Social Security benefits and foster care under scrutiny
Federal officials have made it clear that Social Security benefits paid to foster children are the child’s property. Not the state’s. When a child enters foster care and qualifies for benefits, those funds are supposed to support their needs and, when possible, be saved for their future.
In many states, child welfare agencies applied to become the child’s “representative payee.” That status allows an agency to manage the money, but not to redirect it for unrelated expenses. The role comes with a legal duty to act in the child’s best interest. The concern is that this line was crossed. Instead of preserving unused funds, states often used the benefits to offset foster care costs, effectively replacing state spending with a child’s own income.
The warning came from federal officials, including the Administration for Children and Families within the Department of Health and Human Services. Their message focused on compliance, not politics. They emphasized that foster care is a state responsibility. If a child’s Social Security or SSI benefits are not immediately needed for personal care, education, or medical needs, those funds should be conserved for later use.
This matters most when young people age out of foster care. Housing deposits, college expenses, transportation, and basic living costs often hit all at once. For many, these benefits could be the difference between stability and crisis.
Why reimbursement is now being discussed
Legal experts and child advocates argue that using children’s benefits to repay state foster care expenses amounts to foster youth paying for their own care. That care, by law, must be provided regardless of whether the child receives federal benefits. Earlier estimates suggest that, over time, states may have redirected hundreds of millions of dollars from foster children. If reimbursement is required, the financial exposure could be significant.
For former foster youth, the impact is personal. Many say they left care with no savings, no safety net, and no idea that benefits had ever been issued in their name.
States already changing course
Some states are not waiting. Idaho is often cited as a clear example of reform. The state stopped automatically using Social Security benefits to cover foster care costs and shifted toward preserving funds unless a child has unmet, specific needs. Federal officials have pointed to this approach as workable and lawful. Other states are now reviewing policies, especially as the possibility of repayment grows more real.
One former foster youth who has spoken publicly about the issue is NFL player Scott Matlock, who has described how access to every dollar matters when support systems disappear overnight.
What could happen next
If states are required to reimburse benefits, the outcome would not just be financial corrections. It would likely force permanent policy changes in how Social Security benefits are handled for foster children.
Key points now under review include:
- Whether states must return previously used funds
- How representative payees manage and document benefit use
- How savings are preserved for children approaching adulthood
For thousands of current and former foster youth, this moment could finally shift control of Social Security benefits back to where the law says it belongs: with the child. The broader goal is simple but overdue. Benefits issued in a child’s name should follow that child into adulthood, providing stability, options, and a fairer start.