But operations manager John Henderson said it was made clear to staff they were not to supply young people with cigarettes.
A Dunedin woman who fostered a teenage boy for several years said she complained to CYF after the boy was given cigarettes while living in a CYF group home in Dunedin.
The boy, who was then about 14, told her smoking was allowed in two homes he was in but not in a third.
He told her older boys or staff would buy cigarettes and distribute them to those who wanted them.
The boy had "smoked behind the bike sheds with his mates" from time to time before he went into the home, his foster mother said, but was a regular smoker after he came out.
Now aged 19, he was still a smoker.
Asked for a response, Mr Henderson said smoking by young people in CYF care was discouraged, and no smoking was allowed at all in secure residences or in care and protection homes.
Because of the time which had elapsed since the boy said he was given cigarettes by staff, Mr Henderson said he was unable to verify whether that had occurred.
The foster mother, who did not want to be named, raised the issue with the Otago Daily Times, saying if it was good enough for prisons to be smoke-free, CYF should also adopt the same policy.
Another foster parent told the newspaper that CYF staff had sometimes told him to let teenagers in his care smoke.
"For some of [the teenagers], smoking is the lesser of several evils. It is difficult to ban them from smoking, anyway. Some of them are pretty worldly wise."
He discouraged teenagers in his care from smoking at his home but had allowed one boy to smoke regularly after discussing it with the boy's social worker.
"He had violent tendencies and might have attacked us or something if we hadn't."
Mr Henderson said CYF's smoking policy was similar to that of the Corrections Department, in that there was "simply no smoking at all, regardless of age", in secure homes and care and protection facilities.
When young people who smoked were admitted to a secure residence, they were provided with support to help them to stop and given advice on the risks associated with smoking.
However, the reality was there were "occasional instances" where teenagers in non-secure homes or those placed with foster families were allowed to smoke, he said.
Staff and caregivers were expected to protect the health and safety of young people in their care, in the same way as any reasonable parent.
They were advised to keep the home smoke-free, to encourage young people not to smoke, and to use any programmes available to help them stop smoking, he said.
"Despite that, no matter how much we discourage young people from smoking, there are the occasional instances where, with a parent's permission, we allow a young person to smoke under very strict conditions.
"In this way, the carers can slowly work to reduce the amount a young person smokes without prompting a confrontation that means the placement breaks down."
