Trump admin signs up 30th state to eradicate‘orphan tax’ on foster kids — as New York continues to buck Melania’s plea

The Trump administration has persuaded a 30th state to stop using the “orphan tax” after Melania Trump pushed a program that helps set up children in the foster care system for success later in life.

New York, however, is one of 20 states that continue the practice of taking a foster child’s Social Security survivor or disability benefits to reimburse themselves for the cost of the child’s care, leaving them penniless when they age out of the system. 

Those funds, which can add up to thousands of dollars, could be the difference between success and poverty for children when they go out into the world. 

Melania Trump’s Fostering the Future program has helped ease the “orphan tax” REUTERS

Alex Admas, the assistant secretary of the Administration for Children and Families (ACF), told The Post that survivor benefits mean “the difference between success or not.”

“It’s a down payment on a house. It’s years of apartment rent. It’s higher education. It meant so much to those kids and so little to the state,” he said.

When a parent dies after having worked and paid into Social Security, their child is entitled to a monthly survivor benefit. But for those orphans who end up in foster care, many states intercept those funds, in what’s been dubbed the “orphan tax.”

Critics call the practice “double billing,” as state and federal law already require the state to pay for foster care. States have taken $179 million from foster kids’ Social Security in a single year, the End the Orphan Tax group estimates.

Survivor benefits usually average about $1,100 per month – money that can add up to help foster children jump-start their education or have safe housing.

“If a child’s in foster care for two or three years, you can see that it adds up to some real resources for them,” Admas noted.

The Trump administration has been urging states to end the practice. On Wednesday, Oklahoma became the latest state to disavow the tax.

“Every child deserves the opportunity to pursue the American Dream and build a brighter future, regardless of the circumstances they were born into,” said Oklahoma Gov. J. Kevin Stitt. 

Of the 20 states holding out, some have expressed interest in ending the tax and the ACF, which is part of the Department of Health and Human Services, anticipates seeing the list shrink further in the coming months. A simple executive order from a governor can stop the practice. 

“Thirty states have chosen fairness over bureaucracy by protecting the Social Security survivor benefits that belong to foster children, and I commend their leadership,” said HHS Secretary Robert F. Kennedy, Jr. 

“When a parent dies, those benefits are meant to help their child — not reimburse the government. Every state should protect these children instead of taking what their families earned, and HHS will keep pressing until they do.”

Gov. Kathy Hochul’s office did not respond to a request for comment on why New York still uses the tax.

New York City, however, does ensure orphans receive their survivor benefits. In 2021, the city decided that those benefits should be given to orphans when they leave foster care and opened bank accounts for those children. 

New York is one of 20 states that takes a child’s survivor benefits puhimec – stock.adobe.com

Many states disavowed the tax after Melania Trump arranged for children in foster care to be part of the Trump Savings Accounts in a program called Fostering the Future Accounts.

Admas said the first lady’s work “turbocharged” their efforts.

“We’ve seen just a flurry of activity of states both pledging to create accounts for their foster youth, and then simultaneously pledge that they will end the orphan tax and place survivors’ benefits in those accounts,” he noted.

“So certainly, if you think about younger children, those could be investment vehicles that could grow to some real resources when those kids turn 18.”

Nearly every child who goes into foster care is impoverished and almost all leave foster care broke.

Nearly 65% of youth who age out of the system experience poverty by age 23, The Imprint found.

The Trump accounts also eased the worry of some state officials, who were concerned about how 18-year-olds may spend large sums of money suddenly handed to them.

“The Fostering the Future Accounts, in this case, are very elegant solutions because it operates where it’s not necessarily a checking account for day-to-day expenses,” Admas noted. 

“It’s for those major life milestones: education, down payment on house, retirement. So it can provide some of that protection to ensure that when youth turn 18, they’re set up on a pathway towards financial independence.”

The first lady has said helping children in foster care is a “moral imperative” for the nation.