TRENTON, N.J. — Gov. Phil Murphy has signed legislation formally requiring New Jersey to conserve federal benefits received by children in foster care, ending the long-standing practice of using those funds to offset the cost of their care.
The law mandates that federal benefits received by youth in out-of-home placement through the Division of Child Protection and Permanency remain with the child, except when necessary to maintain benefit eligibility. It also codifies an existing Department of Children and Families policy to stop using a child’s federal benefits to pay for foster care costs.
“With today’s bill signing, we are codifying our state’s policy of ensuring federal benefits remain in the hands of the children they belong to,” Murphy said. “This measure helps ensures that children are treated fairly when they exit the child welfare system.”
Federal law requires child welfare agencies to apply as representative payees for children who receive Social Security or other federal benefits upon entering foster care. Those benefits have historically been allowed to cover foster care expenses, a practice New Jersey began reassessing in recent years.
“Beginning in 2022, DCF proactively began exploring how these federal regulations were impacting youth and families. Many families become involved with our child welfare system due to issues related to or compounded by poverty,” said DCF Commissioner Christine Norbut Beyer. “Our goal at DCF is to build strong families, and we do that through the provision of services and supports, setting up youth to succeed upon exiting care with a stronger financial foundation. We are thankful for the partnership of Senate Majority Leader Ruiz and Assemblywoman Haider to ensure that this practice continues.”
Under the new law, New Jersey becomes the 12th state to enact legislation protecting foster children’s federal benefits. State officials said DCF will continue exploring ways to conserve additional benefits without affecting eligibility.
“Protecting children is the core mission of child welfare, and that extends to protecting the financial well-being of children in the foster care system,” said Alex J. Adams, assistant secretary for the Administration for Children and Families at the U.S. Department of Health and Human Services. “We are grateful for the leadership of Governor Murphy in resolving the issue of state’s intercepting federal benefits from foster children, which will improve the lives of many children and ensure they have an opportunity to succeed. New Jersey is setting the standard that we hope the 38 other states still diverting benefits will follow.”
The legislation follows a multi-year effort by DCF that included public listening tours, outreach to families and youth with lived experience, and research into best practices nationwide. In June 2024, the department stopped using youth benefits for care costs, and in March 2025 began enrolling eligible youth in Achieving a Better Life Experience accounts, which allow greater savings without affecting income eligibility.
State officials cited early positive outcomes, including an instance in which an 18-year-old foster youth was able to use conserved benefits to purchase a used car needed for school and work.
Prime sponsors of the legislation, S3153/A4543, include Senate Majority Leader M. Teresa Ruiz, Sen. Joe Cryan, and Assemblywomen Shama Haider, Shanique Speight and Shavonda Sumter.
“Last year, a grandmother shared with me how her grandchild was financially harmed by a State policy that used the child’s federal benefits for the cost of their care,” Ruiz said. “That conversation stayed with me and made painfully clear how this policy puts up barriers at the very moment young people need support the most. When we protect a child’s benefits, we’re not just changing a rule — we’re giving them a real chance to find stable housing, continue their education, and cover basic needs as they transition out of care. Passing S-3153 is about giving young people who have already faced far too much adversity a fair and dignified start.”
“Many exit the foster care system into homelessness with only a duffel bag to their name. Dedicating these benefits for future use can mean the difference between life on the street and life with stability, security, and opportunity,” Cryan said. “This law will help ensure former foster kids receive the benefits that are rightfully theirs so they can begin their adult lives with confidence.”
“This law puts children first by ensuring that federal benefits intended to support them are used for their well-being, not to offset State costs,” Haider said.
“Children in out-of-home placement already face enormous disruption and uncertainty,” Speight said. “Protecting their federal benefits helps ensure those funds remain a lifeline for their needs today and a foundation for their independence tomorrow.”
“This legislation affirms fairness and dignity for children in foster care,” Sumter said. “By safeguarding their benefits, we are ensuring these resources remain with the young people they were intended to support, giving them a real opportunity to succeed as they move into adulthood.”
Public officials and advocacy groups also praised the measure.
“Today’s bill signing affirms a simple but critical principle: federal benefits intended for children should be used to support those children and not to reimburse the State for the cost of their care,” said Public Defender Jennifer Sellitti.
“The New Jersey State Bar Association is grateful for the Governor’s signing of A4543 (Haider)/S3153 (Ruiz) as an important measure to protect the assets of children in the care and custody of the Division of Child Protection and Permanency,” said New Jersey State Bar Association President Christine A. Amalfe.
“This legislation has the potential to dramatically improve the lives of children removed from their homes due to abuse or neglect, helping to put them on a path toward a more stable and secure future,” said Liza M. Kirschenbaum, associate director of Court Appointed Special Advocates of New Jersey.
“Advocates for Children of New Jersey applauds Governor Murphy for signing S-3153/A-4543 and thanks the bill’s prime sponsors and co-sponsors for their leadership and steadfast advocacy on behalf of New Jersey’s children and families,” said Mary Coogan, president and CEO of Advocates for Children of New Jersey.
