Following a directive last month from a top Trump official, a growing number of states have pared back rules that have long allowed child welfare agencies to seize foster youths’ Social Security and survivor benefits — a practice critics say essentially charges kids for their time in foster care.
“Child welfare agencies cannot operate on the backs of the children they exist to serve,” said Amy Harfeld, policy director of the San Diego-based Children’s Advocacy Institute and a longtime proponent of such reforms. “At this point, this issue is undeniable, but some states really do need guidance and leadership from D.C.”
On Tuesday, Nebraska Gov. Jim Pillen signed an executive order that bars the state from seizing survivor benefits from foster youth to cover the costs of their placement. Legislation introduced in Mississippi this month takes similar steps.
In California, a bill authored by Assemblymember Isaac Bryan would “ensure that all federal Social Security Administration benefits are used in the best interest of a foster youth, or conserved for the youth to access once they have exited the system.”
And in Washington — one of the first states to publicly debate these policy changes — legislation introduced this month would bar the Department of Children, Youth and Families from withholding federal Supplemental Security Income benefits from foster youth ages 18 to 21. It does not prohibit the agency from taking the funds designated for younger kids, however.
If signed into law, state Sen. Emily Alvarado said dozens of young adults each year could avoid unemployment, homelessness and even incarceration.
“My hope is that this is the first step of many to make sure that we end the practice and preserve benefits and financial resources for young people,” Alvarado told fellow lawmakers earlier this month. The state’s current practice, she added, “is legal — but it’s not right, and we should change the policy.”
The moves follow admonishments from the nation’s top child welfare official. On Dec. 11, newly named Assistant Secretary for the Administration for Children and Families Alex Adams sent a letter to 39 governors, urging them to end what he called “the orphan tax.”
“I will actively and expeditiously work to curb this abusive practice to ensure vulnerable youth have the resources they need to succeed,” Adams wrote. In an interview with The Imprint last month, he further described that strategy, saying he would begin “a little bit more on the honey side of the house, but maybe work up to the vinegar side.”
Harfeld said Adams’ letter pressured states that hadn’t taken action.
“What he is doing at the federal level serves to validate the enormous number of states that have already acted on this decisively, and serves as a call to action for the states who, for one reason or another, are slow to act,” she said.
As of 2025, 10 states and local governments have barred child welfare agencies from seizing the benefits, and another 18 have enacted partial reforms, according to the Children’s Advocacy Institute’s database. At least a dozen states are weighing new laws, with more expected this year.
The seizure of foster youth’s benefits was first exposed by a 2021 Marshall Project and National Public Radio investigation that found $165 million collected in one year alone.
Under federal law, foster youth are eligible for federal benefits under the Social Security Administration, including Supplemental Security Income benefits, survivor benefits, and disability benefits. For years, state child welfare agencies have used the monthly payments intended for individual foster youth to reimburse their general operating budgets.
Opponents of the practice believe a “representative payee” — who can be a relative, family friend or a child welfare agency — should administer the funds for a child’s extra needs in foster care, like special classes or services they wouldn’t otherwise receive. Advocates such as Harfeld have proposed putting the money in a savings account for when young adults age out of the system.
Roughly 5% of all foster youth are entitled to Supplemental Security Income benefits due to their own disability; others receive Social Security benefits because of the death of a parent, according to a 2021 Congressional Research Service report — and payments are typically in the $1,100-a-month range.
The need to create savings accounts for foster youth is an urgent one for many children’s advocates, in large part because of the shaky futures they too often face when leaving the system. Researchers who have long tracked this issue report that one in four become homeless, struggle to complete educational degrees and are more likely to become parents at a younger age than peers in the general population.
In a 2022 op-ed for The Imprint, Ian Marx wrote that had he had access to survivor’s benefits from his deceased mother’s time in the Navy, he might have been able to attend high school trips with the debate team and extracurricular sports. When he left the system, he would have had secure, safe housing and stable transportation.
“The financial security my mother meant to be my legacy after her proud service slipped right by me and into the hands of my new legal parent — the foster care agency — who was ultimately more concerned about its bottom line than my best interests,” Marx wrote.
Not everybody agrees that foster youth should receive this money. In an opinion piece for the New York-based City Journal, University of North Carolina researcher Emily Putnam-Hornstein and American Enterprise Institute senior fellow Naomi Schaefer Riley argue that the policy Adams calls for will lead to fraud.
They say Social Security benefits were never meant to be used as trust funds and that if left to individuals, the money could end up in the hands of adults whose behavior led to the removal of their children. Ultimately, there is “no guarantee that the conserved money will be used for their children’s needs,” the two write.
California Gov. Gavin Newsom vetoed a bill that would have barred counties from collecting both Social Security survivor and disability benefits from foster youth in 2023. His argument at the time was the cost. A year later, a narrower bill covering only survivors benefits was signed into law with the support of dozens of dependency court judges.
But an attempt last year to extend the ban to youth owed disability payments was unsuccessful. The current bill is nearly identical to last year’s legislation. And it faces considerable hurdles: California is facing an $18 billion dollar deficit, and a recent legislative analysis found the proposed law could require California to spend “tens of millions of dollars.” A May vote will determine whether the bill will be heard in the state Senate.
Jeremy Loudenback is a senior reporter for The Imprint. The Imprint is a partner of The Intersection and CVJC.