Young people will have more support as they age out of Michigan’s foster care system thanks to a new law spearheaded by state Rep. Kathy Schmaltz that ensures resources intended for foster children are preserved to help them build stable, independent futures.

House Bill 4750, introduced by Schmaltz (R-Jackson) and Senate Bill 18, introduced by Sen. Jeff Irwin (D-Ann Arbor) address concerns raised by reports detailing the state’s practice of collecting federal benefits awarded to foster children and using those funds to help pay for the cost of care. After working to advance the legislation through the House and Senate, Schmaltz has now secured final approval of the plan with the governor’s signature.

“When I learned that money intended to help foster children was being used to reimburse the state, I knew we needed to fix it,” said Schmaltz, R-Jackson. “These young people have already faced challenges most of us can’t imagine. I worked on this to make sure the resources meant for them are available to help them build a stable future and pursue their goals as they enter adulthood.”

Under previous practice, federal benefits awarded to children in Michigan’s foster care system — including Veterans Administration benefits, Supplemental Security Income, and Social Security benefits — were collected by the state and used to reimburse the cost of care.

The new law requires a significant portion of those benefits to be preserved for the child’s future needs. For children ages 14 and older, at least 50% of benefits must be set aside. The law also provides financial literacy education for young people in foster care and ensures they are notified about any federal benefits the state applies for and collects on their behalf.

“Many foster children enter adulthood without a financial safety net, family support, or the resources that other young adults can rely on,” Schmaltz said. “This law helps change that. Whether a young person wants to attend college, secure housing, start a career, or simply build some financial stability, these dollars should be available to support their future instead of being absorbed into the state budget.”

According to Kids Count data, 33% of Michigan foster youth aging out of the system experience homelessness between the ages of 19 and 21.

Schmaltz said the new law will help provide young people with a stronger foundation as they transition into independent adulthood.

“Government should never stand between a child and benefits that were intended to help secure that child’s future,” Schmaltz said. “This reform is about fairness, accountability, and doing right by some of the most vulnerable young people in our state. I’m grateful to everyone who helped bring attention to this issue and supported this effort from start to finish. Together, we’re giving foster youth a better opportunity to succeed and thrive.”