Vermont H0657: What Child Care Owners Should Know About Foster Care Changes

Most Vermont child care owners don't realize that a provision buried in H0657—An act relating to various programming and requirements within the Department for Children and Families—fundamentally changes how the state treats foster children's Social Security benefits. Understanding this shift matters if you work with DCF, accept state-placed children, or advise families navigating the system.

What Changed

Effective July 1, 2028, Vermont's Department for Children and Families is now prohibited from using a foster child's Social Security benefits to offset the state's cost of care. In plain terms: if a child in state custody receives Social Security benefits—whether survivor benefits, disability benefits, or other payments—those funds can no longer be claimed by DCF to reduce what the state spends on that child's care.

Instead, those benefits must be conserved or directed toward the child's unmet needs. This is a meaningful distinction. Previously, DCF could apply these benefits toward general care costs. Now, the money stays available for the child.

Who This Affects

This change primarily impacts:

• Licensed family child care homes and centers that contract with DCF or receive state-placed children
• Foster families who may see clearer guidance on how benefits are managed
• Children in state custody whose benefits are now protected from state cost-recovery

If you're a child care provider working directly with DCF on placement or reimbursement, this change may affect how the state calculates what it owes you for care, since the state's cost picture shifts when it can no longer offset expenses with children's benefits.

Why It Matters Now

The effective date is July 1, 2028—still ahead—but understanding the change now helps you:

• Anticipate how DCF reimbursement or cost-sharing may be calculated going forward
• Better advise families about how their child's benefits will be handled
• Plan for any operational adjustments if you work closely with state placements

The provision is codified in Section 3 of H0657, amending 33 V.S.A. § 4907(a), on page 3 of the bill.

What It Doesn't Do

It's worth noting: this bill does not impose new taxes, fees, mandates, or grants on small businesses. It's a policy change about how state funds and children's benefits are managed within DCF—not a new regulatory burden on providers themselves.

If you work in child care or family services and want a more detailed breakdown specific to your business model, plain-language resources are available to help you understand how this fits into your operations.

Source: H0657, An act relating to various programming and requirements within the Department for Children and Families, Sec. 3, 33 V.S.A. § 4907(a), effective July 1, 2028.