James Wood’s mother struggled with addiction, and he often found himself adrift, not knowing what day or month it was. “I didn’t understand how time worked,” he said.
When James was 14, his mother died of pneumonia, and he entered California’s foster care system. As a minor with a deceased parent and a disability, James was entitled to federal benefits, totaling $780 a month, some of which his mother had accrued during the years that she worked as a nurse.
But James never received the benefits. The government got the money instead, according to James and his adoptive father, Wayne Stidham.
It’s a longstanding practice for many states or counties to apply for the federal benefits of foster children, often without their knowledge, and then use the money to cover some of the costs of their care, according to legal advocates for children and congressional researchers.
Each year, roughly 27,000 foster children are entitled to these benefits because they have either lost a parent or have a disability. There are currently about 390,000 children in foster care in the United States.
“It’s wrong,” said James, who is now 16 and lives in Grass Valley, Calif., located in the foothills of the Sierra Nevada mountains. “Foster kids could make plans for that money.”
The benefits, the advocates say, should be set aside to provide additional resources for the child like summer camp or art classes. And when the child leaves foster care, they say, the money could be used to pay for college or for a security deposit to rent an apartment.
Some state and county officials say the federal funds are being used to benefit the children and that if money is left over, the child receives the funds upon aging out of foster care.
A spokeswoman for the health and human services department of Placer County, Calif., which oversaw James’s foster care, declined to comment on his situation, but said the county is required by the state to apply for the federal funds and use them for the “benefit of that individual child, which includes food, shelter, clothing, medical care and personal comfort items.”
But this practice, which was been previously brought to light by advocates at Children’s Advocacy Institute and journalists at The Marshall Project and NPR, is increasingly being questioned in courts, in Congress and by officials in the Biden administration. Many states have also been changing their laws to ensure that at least some of the children’s money is conserved.
“We see state agencies trying to fund themselves off the backs of the very children they are supposed to serve,” said Amy Harfeld, national policy director of the Children’s Advocacy Institute, which works to improve quality of life and protections for foster care youth. “It is outrageous.”
In a statement, the Social Security Administration said this week that a child’s federal benefits must be spent on their “current needs and maintenance” and that if there was money left over, the state “must conserve the remaining funds for the child’s future use.”
The agency added that it had recently issued a letter reminding state foster systems “how to use and conserve S.S.A. benefits and to offer them assistance in complying with our requirements.”
Ms. Harfeld, who started pushing to change these practices 15 years ago, said that in many cases, the money never gets conserved by states.
She added that children whose federal benefits are collected by the state receive the same foster care services as those who do not receive the benefit.
“There is no such thing as foster care plus,” Ms. Harfeld said. “The only distinction is that some children are being charged for their care while all the other kids are having their care paid for by the state.”
The practice reflects the scattershot ways that states have historically paid for foster care. In the 19th century, a mix of private and religious groups and some state agencies provided boarding services for the care of foster children.
Even as foster care came to be managed by state and county governments in the 20th century, federal policymakers were reluctant to allocate too much money to these systems for fear that some people might become foster parents simply for the money, said Catherine Rymph, a dean and professor at the University of Missouri, who wrote a book on the history of foster care.
That has left a system that in many places is stretched, Ms. Rymph said. “It is so poorly funded, states will claw back whatever money they can.”
But children say their money — particularly benefits from a deceased parent — shouldn’t be used to backstop the system. When Anthony Jackson was 12, his mother died of a heart attack in a motel room where he and his siblings had been living.
He regarded his mother as a “powerhouse,” a fixture in her St. Paul, Minn., neighborhood who drove a city-run shuttle transporting older people to doctor’s appointments and to the grocery store. While she worked, she paid into Social Security, which would entitle her children to survivor benefits.
After his mother died, Mr. Jackson, now 20, bounced between different relatives before being placed in foster care in 2017.
While in foster care, Mr. Jackson learned from his former girlfriend’s mother that children with a deceased parent can be entitled to survivor benefits. But when he inquired with the Social Security office, Mr. Jackson was told that the state was receiving the benefits on his behalf.
“That was something that was hers, and I didn’t receive it,’’ Mr. Jackson said.
He said the money could have helped him attend an art school in Savannah, Ga., that he was interested in but couldn’t afford. Mr. Jackson attended college locally in St. Paul, but is no longer enrolled.
In a statement, the Minnesota Department of Human Services said when the foster care system applies for benefits on behalf of a child, the money is not “used to fund the state’s child welfare system broadly.” The statement also noted that a new state law passed this year says that the money can “only be used for the care of the child.” The state will also require that children be notified if the state is receiving federal benefits on their behalf.
Across the country, the tide is shifting. More than a dozen states, counties and cities have established new rules or approved legislation requiring that at least some of the benefits be conserved for the children. There are also bills that have been introduced in more than a dozen other states that would mandate conserving the money or require children to be notified about their benefits.
In a series of congressional hearings in March, Martin O’Malley, commissioner of the Social Security Administration, suggested the agency may need more than the current set of rules to ensure states will set aside and conserve some of the benefits.
At one of the hearings, Senator Elizabeth Warren, a Massachusetts Democrat, said she “nearly fell out of my chair” when she was told of this practice.
“Seizing the benefits that go to some of our most vulnerable children just to finance other parts of state government just isn’t right,” she told Mr. O’Malley.
In a 2021 report, the Congressional Research Service said that in 2018, states had used $179 million of federal benefits that were owed to about 27,000 foster children, which is a relatively small amount out of overall funding for foster care.
James Wood remembers his mother, who died when he was 14, giving him three pieces of advice: Don’t use drugs; don’t follow the same path she did; and start making career plans by freshman year of high school. “It really stuck with me,” he said.
James, who is in the ninth grade and was adopted last November, decided to pursue a career in law enforcement. He is going to honor his mother’s wishes and wants the government to honor the intent of survivor benefits.
“If you ask anyone, I think it is very disrespectful to promise someone something and take it away,” James told a state legislative committee in Sacramento last month. “Especially when it’s a kid with a deceased parent.”