Foster Youth Earned Benefits Protection for Success Act

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Policy Status

  • Type: Model Policy
  • Status: Draft
  • Date Introduced: July 24, 2026

Task Forces

  • Health and Human Services

    • Tags

  • 2026 Annual Meeting

    • Summary

    Under federal law, youth in foster care due to their parent’s death, are eligible for Social Security survivor benefits, which represent the contribution their parents made to Social Security through their income. For years, state child welfare agencies have used the monthly payments intended for individual foster youth to reimburse their general operating budgets. This model policy prohibits that practice and ensures that the benefits earned by the parents of foster children are preserved for those youth and not used to balance state budgets.   
    Draft

    Foster Youth Earned Benefits Protection for Success Act

    Section 1. Determination of Eligibility and Application  

    • (A) For all children in the care and custody of the department of child safety, the department shall determine within sixty days after entry into care whether each child is receiving or eligible for earned federal benefits administered by the social security administration or the department of veterans affairs, including survivors’ or dependent benefits.  
    • (B) If the department determines that a child is eligible or may be eligible for such earned benefits, the department shall apply for the benefits on behalf of the child in accordance with federal law.  

    Section 2. Representative Payee  

    • (A) If a child is already receiving earned federal benefits before entering the department’s care, or if the department applies for benefits on behalf of the child, the department shall, in consultation with the child and the child’s attorney, identify an appropriate representative payee consistent with 20 Code of Federal Regulations sections 404.2021 and 416.621, and shall apply to become the representative payee only if no other suitable candidate is available.  
    • (B) If the department is appointed to serve as the representative payee, the department:  
      1. Shall not use any of the child’s earned federal benefits, savings, or assets to pay for or reimburse the department or this state for any cost of the child’s care, maintenance, supervision, or services.  
      2. May use the child’s earned benefits only for unmet needs of the child that are beyond those the department is obligated or agrees to pay.  
      3. Shall establish and maintain an account to conserve the child’s earned benefits in the child’s best interest and consistent with federal and state asset and resource limits. Acceptable account types include: 
        • (a) A special needs trust.[Text Wrapping Break](b) A pooled special needs trust.[Text Wrapping Break](c) An Achieving a Better Life Experience (ABLE) account established pursuant to 26 United States Code § 529A.[Text Wrapping Break](d) Any other account or trust vehicle determined not to interfere with eligibility for public benefits.  
      4. Shall provide an annual accounting of the use, application, or conservation of the child’s earned benefits to the child, the child’s attorney, and, if parental rights have not been terminated, to the child’s parents or guardians.  
      5. Shall periodically review whether another qualified person or entity could serve as representative payee in the child’s best interest and, if so, shall assist in transferring that role.  

    Section 3. Notice and Appeals  

    • (A) The department shall provide written notice to the child, the child’s parents (unless parental rights have been terminated), the child’s guardian, the child’s current placement, and the child’s attorney of any application for benefits, decision, appeal, or appellate determination related to the child’s earned benefits.  
    • (B) If benefits are denied, the department shall consult with the child’s attorney and appeal the denial if it is in the child’s best interests.  

    Section 4. Annual Review of Eligibility  

    The department shall review each case annually to determine whether a child in care has become newly eligible for earned federal benefits after the department’s initial determination.  

    Section 5. Success Sequence Milestone Disbursement Program  

    • (A) The department shall develop and implement a Success Sequence Savings and Disbursement Plan for each child with conserved earned benefits.  
    • (B) Under the plan, a child may access a portion of conserved benefits upon completion of specific milestones that promote independence and financial readiness, including but not limited to:  
      1. Obtaining a driver’s license or state identification card.  
      2. Graduating from high school or receiving a recognized equivalent.  
      3. Enrolling in a postsecondary education, vocational training, or apprenticeship program.  
      4. Maintaining verified employment for at least six consecutive months.  
      5. Completing a department-approved financial literacy or savings-readiness program. 
    • (C) The department shall determine reasonable disbursement thresholds and amounts for each milestone to promote long-term savings while rewarding progress toward self-sufficiency.   
    • (D) The department shall ensure that all youth participating in the program have access to financial literacy instruction and counseling to support effective use of milestone payments and long-term asset building.    

    Section 6. Disbursement upon Exit from Care  

    Upon termination of the department’s custody or legal responsibility for the child, the department shall release any remaining conserved funds as follows:  

    1. To the child, if the child is at least eighteen years of age or emancipated.  
    2. To the person responsible for the child, if the child remains a minor and is not emancipated.  

    Section 7. Rulemaking Authority  

    The department may adopt rules consistent with federal law to implement this act, including rules governing account management, milestone disbursements, reporting, financial literacy education, and oversight.