Gov. Greg Gianforte announced Montana will end the “orphan tax” — the longstanding practice of diverting Social Security survivor benefits from children in foster care to cover the cost of their state care — following a federal directive earlier this year calling on states to end the practice.
For more than two decades, the Montana Department of Public Health and Human Services collected federal survivor benefits — earned through a deceased parent’s lifetime Social Security contributions — into a state special revenue account to offset foster care costs. Gianforte said his November budget proposal will include language to preserve those benefits for foster youth starting July 1, 2027, as children transition out of state care.
“No child in foster care should have the government raid the benefits they deserve,” Gianforte said. “Montana is proud to join the momentum to put an end to this outdated practice, and my budget will ensure these benefits stay with the children who earned them.”
The orphan tax has drawn growing national attention. States took $179 million in foster youth Social Security benefits in 2018 alone, according to advocacy groups. The Trump administration’s federal child welfare officials issued the first-ever federal directive telling states to end the practice in January 2026, and the number of states still following it has dropped sharply since — from 39 states as of December 2025 to fewer than 20 today.
“Thanks to the leadership of Governor Gianforte, Montana is ending the ‘orphan tax’ and protecting the best interests of children in foster care,” said Alex Adams, assistant secretary of the Administration for Children and Families at HHS. “Preserving survivor benefits for Montana’s foster youth stands to provide these young people with a financial foundation that can change the trajectory of their lives as they transition out of state care and into adulthood.”
The announcement is part of a broader push by Gianforte’s administration on foster care. Montana joined the federal “A Home for Every Child” initiative in June to improve foster home availability, strengthen kinship care and reduce administrative burdens in child welfare. The governor also announced Montana’s participation in First Lady Melania Trump’s initiative to expand access to Trump Accounts for children aging out of the foster care system.
Since Gianforte took office in 2021, the number of Montana children in foster care has fallen from 3,236 to 1,706 as of June 30, 2026 — a 47% decrease.