Hundreds of Foster Children in California Have Social Security Benefits Misused by Government

A new report reveals that several states across the United States are diverting federal welfare meant for foster children.

According to CalMatters, in just 2021, hundreds of children in California lost $5.4 million in disability and survivor benefits. The children served by the Department of Children and Family Services in Los Angeles County lost this money, indicating that this issue may be more widespread.

When foster children turn 18, they are entitled to receive this money. However, a new report from the Child Advocacy Institute (CAI) at the University of San Diego School of Law shows that states continue to redirect federal welfare intended for foster children, leading to many foster youths falling into poverty as adults.

CAI stated that it is the responsibility of each state to cover the caregiving costs for foster children, but states often apply for federal benefits on behalf of these children, using the funds to offset foster care expenses.

The majority of states diverting foster children’s welfare funds do so in secret, without notifying the foster children or their guardians, according to the CAI report.

This issue is deeply concerning. In the CAI report, 44 states received failing grades in handling foster children’s welfare. Only Arizona and Washington D.C. received an A grade. New Mexico and Oregon received a B, while Illinois, Maryland, and Washington state received a C. All other states scored an F, including California.

California proposed a law to protect the economic welfare of foster children, but it was ultimately vetoed by Governor Gavin Newsom.

CAI noted that federal law requires foster care agencies to prioritize the best interests of the children; the Social Security Administration mandates that all benefits must be used to meet unmet needs or for future savings in consultation with the children. However, states often apply for benefits and deposit checks into their own accounts.

CAI estimates that between 40,000 and 80,000 foster children are eligible for federal benefits, with potential annual amounts exceeding $11,000, which could provide financial security when the children turn 18 or serve as a college savings fund. However, foster children often have little to no savings as adults.

Amy Harfeld, National Policy Director at CAI, stated that foster children are not a source of income. They are children who have experienced trauma and need dedicated adults by their side for their well-being. While these funds may be a small fraction of most states’ budgets, they can be life-changing for the young people affected.

Currently, less than 3% of foster children ultimately earn a bachelor’s degree, and one-third of those who remain in the foster care system after turning 17 end up homeless.

Over half of the states in the U.S. are currently undergoing foster care welfare reforms, and Congress has introduced a bill to prevent states from using children’s federal welfare for their own purposes. However, the initial proposal was rejected, and Congress is still working on developing a bipartisan-supported bill.