Why It Matters
Indiana will no longer reimburse itself for foster care costs by diverting federal survivor benefits meant for children in state custody. The policy change preserves an average of nearly $800 per month for each eligible child until they turn 18, ensuring funds remain available when they exit the system.
The state becomes the 20th to join a federal initiative aimed at reducing foster care placements and expanding available homes.
What Happened
Governor Mike Braun issued an executive order Wednesday directing the Department of Child Services to stop using federal survivor benefits to offset the state’s costs of caring for foster children. The agency had been diverting these funds—which come from Social Security Administration, Veterans Affairs, and Railroad Retirement Board programs—to reimburse Indiana for care expenses.
Under the new policy, DCS will screen all children currently in or entering state custody to determine eligibility for survivor benefits. The agency must notify children, legal representatives, and caseworkers of any benefit applications and their outcomes. DCS will manage the funds and provide annual accountings, with money released when young people leave state custody unless they request earlier distribution.
The directive takes effect immediately but does not apply retroactively to benefits already diverted.
By the Numbers
Approximately 342 children in Indiana’s foster system currently receive survivor benefits. The total annual cost to the state of preserving these funds is $3.2 million. The average monthly benefit per child is nearly $800, paid until age 18.
What They’re Saying
According to reports of the announcement, Braun said the benefits “belong to children, not the government.” He framed the order as ensuring dollars intended for children support their futures.
Alex Adams, U.S. assistant secretary of administration for children and families, called the change “extraordinary,” adding that too many states “tax orphans, in the most literal sense.”
Federal Partnership
Indiana signed a proclamation joining the federal “a home for every child” initiative, which seeks to decrease foster care entries and increase available foster homes. Adams said participating states receive reduced reporting requirements in exchange for submitting monthly data on the ratio of foster homes to children.
States can redirect time previously spent on lengthy compliance reports toward efforts to improve child welfare outcomes. The Administration for Children and Families plans to announce performance bonuses Thursday for states with the best and most improved ratios.
What’s Next
Federal officials are pushing additional states to join the initiative by June 30. States meeting that deadline will begin reporting data by October 1, when the administration plans to launch a public website comparing monthly state updates.
Indiana’s Department of Child Services will establish procedures for managing and distributing the preserved benefits according to the new executive order guidelines.