A decision made during the administration of Donald Trump could have strong financial and political implications in the United States. The federal government has warned 39 states that they must protect Social Security benefits for children in foster care and that if they do not, They could be forced to return millions of dollars used improperly. The measure challenges a widespread practice that affects thousands of minors.
As reported The Economic TimesOn December 11, the Administration for Children and Families (ACF), part of the Department of Health and Human Services (HHS), sent a letter to the governors of 39 states.
In that document, the agency demanded that it be ensured that Social Security and Supplemental Security Income (SSI) benefits intended for children in state care actually go to them and not to state coffers.
Although Social Security is typically associated with retirees, Thousands of minors in foster care receive these paymentsin many cases as a survivor benefit after the death of a parent.
However, the ACF warned that many state child welfare agencies are withholding this money and using it to cover the costs of the foster care system itself, rather than reserving it for children.
“Every dollar of a benefit earned belongs to these young people, not to government agencies or bureaucrats,” said Alex J. Adams, deputy secretary of the ACF, as reported Daily Express USA. “Protecting children is the fundamental responsibility of child welfare, and in all our efforts, their well-being will be our top priority.”
The numbers illustrate the problem. According to a Social Security Advisory Board report published in September 2025, some are 27,000 children in foster families receive social benefits or SSI, which represents more than 5% of the total number of minors in the country subject to this regime. The ACF believes this is one of the most vulnerable groups served by the system.
Accordingly AP NewsMany states use these benefits to save millions of dollars in publicly funded child care costs. In 2018, states seized at least $179 million belonging to children in foster care and then distributed it among state priorities without any direct connection to their well-being, a fact cited by Senator Elizabeth Warren.
Warren brought the issue to Congress in March 2024 when she questioned then-Social Security Commissioner Martin O’Malley and called for a federal ban on the practice. The senator denounced that several states systematically examine the children in their care Identify potential beneficiaries and then forward the money towards state budgets, loudly Daily Express USA.
Some states began reversing this policy. Idaho, for example, ended welfare withholding during Adams’ previous tenure at the Department of Health and Human Services. In total, Eleven states already have rules that prevent Social Security diversion of minors.
Now the ACF and the Social Security Administration are trying to expand this criterion to the rest of the country. If the federal lawsuit is successful, 39 states could reportedly face an obligation to repay millions of dollars and fundamentally change how they manage the money allocated to children in foster care. The Economic Times.
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