America’s Dirty Secret: 39 States Are Robbing Foster Kids Blind. The Feds Are Finally Calling Them Out, But Will Repayments Follow?

America tells itself a story about children.

We say that when a family collapses, when a parent dies, when abuse shatters a home, the state steps in as a last resort, not to replace love, but to keep a child safe until love can be found again. We say we do this because childhood is not a privilege, it is a responsibility. We say it so often that the words start to sound like truth.

Then the check arrives.

A child has lost a mother, or a father, or both. A child is disabled, or grieving, or simply trying to stay upright after the floor dropped out from under them. Social Security sends monthly benefits precisely because the loss is real, because the need is real, because someone worked, paid in, and the system promised that if tragedy came, their child would not be left with nothing. Survivors’ benefits are not a bonus. They are a lifeline with a paper trail of payroll taxes behind it, a small, steady acknowledgment that a dead parent’s labor still matters to the living child.

In too many places, the child welfare system has learned how to turn that lifeline into revenue.

Across 39 states, agencies tasked with protecting foster children have routinely positioned themselves as “representative payees,” taken control of those monthly Social Security payments, and used them to reimburse the state for foster care costs. They take money meant for a child’s future and call it “maintenance.” They take an entitlement rooted in loss and convert it into a budget line that helps the agency today.

It is hard to overstate what that means in practice, so do not picture a spreadsheet first. Picture a kid.

Picture a twelve year old boy whose parents are gone. His benefits are about $900 a month. That money could pay for counseling that actually happens, not just the kind that exists on a case plan. It could keep him in the sport that gives him structure. It could cover school clothes that fit, shoes that do not split open mid semester, a laptop for homework, a driver’s ed course, an emergency fund, a down payment on a room when he turns eighteen. It could sit in a protected account and grow into the first truly stabilizing thing this child has had in years.

Instead, the state often deposits the funds, then withdraws them, again and again, month after month, to offset costs it is already obligated to cover. The child does not receive a choice. The child often does not receive an explanation. The child simply loses.

By the time he ages out at eighteen, the math is unforgiving. The benefits that could have amounted to tens of thousands of dollars are gone. He steps into adulthood with a trash bag of belongings, a thin folder of paperwork, and a system that congratulates itself for “transition planning.” Then we act surprised when former foster youth face homelessness at horrifying rates, when unemployment is common, when the smallest setback becomes catastrophe. We call it a cycle, as if it were weather. We rarely call it what it is, a decision.

This is not an accidental byproduct of bureaucracy. It is a financial incentive embedded inside a moral enterprise.

Investigators and policy analysts have estimated that child welfare agencies divert roughly $170 million to $220 million a year from around 27,000 foster children receiving Social Security benefits. A widely cited figure places the 2018 total around $179 million across 38 states plus Washington, D.C. Even without perfect national accounting, the outline is clear. Tens of thousands of children. Hundreds of millions of dollars. Most of it taken from survivors’ benefits, sometimes from SSI, the last fragile support for youth with disabilities. This is a system that has learned how to search for eligible children and monetize their eligibility.

The cruelty is sharpened by a simple truth: foster care is already publicly funded. States receive federal and state dollars to provide food, shelter, supervision, and basic necessities. When a state uses a foster child’s Social Security benefit to reimburse itself for that same care, it is not “paying for the child.” It is charging the child for being taken. It is double dipping into a child’s tragedy because it is easier than asking lawmakers for more money, and quieter than raising taxes. It is a budget solution built on the backs of children who cannot vote, cannot hire lawyers, and often cannot even see their own financial records.

A decent society would treat that as an emergency. Many states have treated it as routine.

The legal cover has always been written in careful language. Social Security benefits are protected by federal law from attachment and garnishment, but regulations allow a representative payee to use funds for a beneficiary’s “current maintenance.” When the state becomes the payee, it interprets “maintenance” in the broadest way possible and points to its role as custodian. The conflict of interest is obvious. A fiduciary is supposed to act in the beneficiary’s best interest. Here, the fiduciary is also the bill collector.

In 2003, the U.S. Supreme Court decision in Washington State Department of Social and Health Services v. Guardianship Estate of Keffeler gave states a path to keep doing it. The Court held that the practice did not violate the anti garnishment statute because it was not a traditional seizure like a levy or an execution. The decision landed like a locked door. It told states, in effect, that if you take the money the right way, through payee status, you can call it care. You can take what a child owns and label it “support,” even when the support the child actually needs is exactly what you are stealing from their future.

After that, the practice spread, hardened, and hid behind procedure. Some states offered thin safeguards. Some required notice that came too late to matter. Some made it so hard to track the money that only litigation could force clarity. The worst part is how ordinary it became. Paperwork, deposits, withdrawals, monthly repetitions that feel invisible until the day a young adult asks, often for the first time, “Wasn’t there money for me?” and the answer arrives like a second abandonment.

There is a particular violence in taking a dead parent’s last protection and feeding it into the machinery that failed a child in the first place. It is one thing for the state to struggle with resources. It is another thing for the state to solve its resource problem by draining the accounts of children who already lost everything. This is not belt tightening. This is extraction.

And it echoes far beyond a single bank statement.

A foster youth with a preserved reserve can take a breath. They can afford a security deposit. They can keep a phone on so employers can reach them. They can pay for a certification, a bus pass, a car repair. A disabled teen can bridge gaps in care that public systems routinely leave open. That money can be the difference between stability and the street. Taking it does not merely make life harder. It engineers crisis, then pretends crisis is inevitable.

In recent years, the silence has started to crack. Advocates, youth attorneys, and investigative journalists have pressed states to stop appointing child welfare agencies as payees, to preserve benefits, to require notice, to put surplus funds in protected accounts that follow the child, not the agency. A growing number of states have moved to end or restrict the practice, not because the morality suddenly changed, but because sunlight finally hit the ledger.

Now federal officials have reportedly begun pressing governors to halt the diversion of benefits and to align child welfare practice with the basic idea that children’s entitlements belong to children. For the states, the easiest response is forward looking reform, a promise to stop taking money tomorrow. But for the young adults already emptied out, tomorrow is not justice. Tomorrow is an apology without restitution.

The question hanging over every “reform” announcement is the one that makes institutions nervous: who pays it back?

If a state drained a child’s survivors’ benefits for six years, if it converted that child’s loss into reimbursement, if it took tens of thousands of dollars and used it to pad budgets, then the moral math is simple. The money was never the state’s. It belonged to the child. Ending the practice does not erase the theft. It merely stops the bleeding while the victim is told to live with the scar.

This country has built an entire vocabulary to soften what it does to vulnerable people. We say “services” instead of surveillance. We say “placement” instead of removal. We say “maintenance” instead of taking. We say “transition” instead of pushing someone off a cliff.

Here is the plain version.

A child’s parent dies, or a child is disabled, and Social Security sends money meant to help that child survive, heal, and eventually stand on their own. The state takes custody, takes the money too, and spends it on itself. Then it releases the young adult into a world that is already stacked against them and calls that independence.

This is not a paperwork problem. It is a values problem.

If we mean what we say about protecting children, then the standard cannot be “stop eventually.” It has to be “stop now,” and “show the accounting,” and “repay what was taken,” and “punish the incentives that made this feel normal.” It has to be reform with receipts, not reform as public relations.

Because the ugliest part of this scandal is not just the money. It is the lesson it teaches a child in state care, a lesson delivered quietly, month by month, in withdrawals and omissions.

Even after everything that happened to you, even after the loss, even after the trauma, even after the state took you, we still found a way to take from you again.