South Carolina will no longer allow the use of Social Security survivor benefits to offset the cost of foster care. Gov. Henry McMaster made the announcement Tuesday.
The practice is commonly referred to as the "orphan tax." It permits the use of Social Security benefits intended to support children who have lost a parent to instead be used to reimburse the state for foster care expenses. Now, these benefits will remain available for the benefit of the child.
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, 30 states had ended or substantially reformed the practice.
“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.”
There are currently more than 300 children in foster care in the state. To support the change, the South Carolina Department of Social Services will include $1.6 million in its budget request for the next fiscal year to help offset costs.