COLUMBIA – Governor Henry McMaster announced today that South Carolina will join the states ending the practice of using Social Security survivor benefits belonging to children in foster care to help cover the cost of their care.
Under the practice commonly referred to as the “orphan tax,” Social Security benefits intended to provide financial support to children who have lost a parent can instead be used to reimburse the state for foster care expenses.
“When a child enters foster care, our responsibility is to protect that child and give them every opportunity to build a better future," said Gov. McMaster. “By ensuring these benefits stay with the children they were intended for, we can give them resources to help build that future.”
South Carolina’s decision follows a nationwide effort led by the Trump Administration to end the practice. In December 2025, the U.S. Department of Health and Human Services called on states to stop using Social Security survivor benefits to offset foster care costs. As of July 2026, 30 states had ended or substantially reformed the practice.
To make this change possible, the South Carolina Department of Social Services (SCDSS) will include $1.6 million in its budget request for the upcoming fiscal year to replace the Social Security survivor benefits currently used to offset foster care costs for 301 children in foster care.
“When these survivor benefits are conserved for children in foster care, they can be a very meaningful support for a child’s individual needs, and for those older youth who enter foster care it can ease their transition into young adulthood,” said SCDSS Director Tony Catone. “This change will give children in foster care greater stability and more resources as they build toward a brighter future. DSS is committed to strengthening the support we provide every child in our care, and we are proud to take this step to further that mission.”
Under South Carolina’s new approach, Social Security survivor benefits will remain available for the benefit of the child rather than being used to offset the state’s foster care expenses.
South Carolina continues to make improvements in child welfare, including reductions in entries into care, a strong ‘kin-first’ placement approach, and has made significant progress in safety, placement, and permanency metrics as part of the Michelle H. Federal Settlement Agreement. In May 2026, Gov. McMaster launched “A Home for Every Child,” an initiative focused on helping more children in foster care find safe, permanent homes.