Indiana Governor Orders Foster Children to Keep Federal Survivor Benefits
Why It Matters
Indiana Gov. Mike Braun has signed an executive order directing the state’s Department of Child Services to stop using federal survivor benefits paid to foster children to offset the government’s costs of caring for those children. The order, signed Wednesday at the Statehouse, takes effect immediately and applies to an estimated 342 children currently receiving such benefits.
The policy change means federal payments from programs including Social Security Administration, Veterans Affairs, and Railroad Retirement Board will now be preserved for the children themselves — rather than redirected to reimburse the state.
What Happened
Prior to the order, Indiana’s Department of Child Services had been drawing on survivor benefits — typically averaging nearly $800 per month per child — to cover some of the state’s foster care costs. Critics of the practice argued children aged out of the system with little or nothing from benefits that had been earned on their behalf.
“Survival benefits belong to children, not the government,” Braun told reporters at a news conference. “This executive order is about making sure dollars intended for a child are protected and used to support that child’s future.”
Under the new directive, DCS must screen every child currently in care or entering state custody to determine eligibility for survivor benefits. The department will be required to notify the child, their legal representative, and their caseworker whenever a benefits application is filed and when a determination is made. DCS will manage the accumulated funds and provide each child with an annual accounting. By default, funds will be released to young people when they exit state custody, in line with federal regulations.
The order is not retroactive, meaning children who have already aged out of the system will not receive reimbursement for benefits previously diverted.
By the Numbers
- 342 — estimated number of Indiana foster children currently receiving federal survivor benefits
- ~$800/month — average benefit amount per child, paid until age 18
- $3.2 million — annual cost to the state of no longer diverting those funds
- 20th — Indiana’s rank among states now participating in the federal “A Home for Every Child” initiative
- June 30 — federal deadline for additional states to join the initiative and qualify for performance bonuses
Federal Partnership
The announcement coincided with Indiana becoming the 20th state to join the federal “A Home for Every Child” initiative, a program administered by the Administration for Children and Families aimed at reducing the number of children entering foster care and expanding the pool of available foster homes.
Alex Adams, the U.S. Assistant Secretary for Administration for Children and Families, attended the Statehouse event and signed a joint proclamation alongside Braun. Adams praised the survivor benefits policy as “extraordinary,” adding, “Too many states tax orphans, in the most literal sense.”
Adams also outlined regulatory relief for states that join the initiative, saying Indiana’s DCS would no longer be required to submit lengthy federal compliance reports. Instead, the state will provide monthly data on the ratio of foster homes to children in care — a streamlined accountability model Adams said frees up caseworker time for work that directly improves child outcomes.
Adams indicated that federal officials plan to announce performance bonuses Thursday for states with the best and most-improved foster-home-to-child ratios. He expressed hope of crossing the threshold of more than half of all states joining before a June 30 deadline. States that meet that deadline would begin reporting data by October 1, with a federal comparison website targeting the same launch date.
What’s Next
With the executive order now in effect, DCS will need to establish new internal procedures for benefit screening, notification, fund management, and distribution requests from children still in state custody. The $3.2 million annual gap left by the policy change will need to be addressed through state appropriations or budget adjustments.
On the federal side, Thursday’s bonus announcement could prompt additional states to join the foster care initiative ahead of the June 30 cutoff. Braun’s action on survivor benefits may also put pressure on other governors to examine whether their states maintain similar diversion practices. Braun has taken several executive actions in recent weeks, including moves on state tax policy that drew attention across Indiana.
Meanwhile, Indiana’s political landscape continues to shift following recent legislative battles over redistricting, adding context to the governor’s use of executive authority to advance policy outside the legislative process.