When a child enters foster care, they sometimes receive Social Security survivor benefits (because a parent died) or veterans' survivor benefits. Historically, Idaho — like most states — would intercept those checks and use the money to offset the state's cost of providing foster care. The child never saw a cent.
Critics call this the "orphan tax" because the state was effectively taxing the deaths of foster children's parents to fund its own program costs. These children age out of foster care with no savings from benefits that were legally theirs.
H 558 prohibits this practice. DHW must now apply these federal benefits for the child's genuine unmet needs and preserve remaining balances for their future use.
The Idaho Freedom Foundation scored H 558 negatively, arguing that children in state custody are already fully funded by taxpayers — making the federal survivor benefits a "double-payment" for the same obligation. The NO votes tracked closely with IFF-aligned members who opposed the bill on fiscal grounds.
Supporters countered that these are benefits the children earned through a parent's death or service — not state funds — and that using them to reimburse the state is a betrayal of the children the system is supposed to protect.