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Friday, October 5, 2012

Child Welfare: Social Security and Supplemental Security Income (SSI) Benefits for Children in Foster Care

Umar Moulta-Ali
Analyst in Disability Policy

Adrienne L. Fernandes-Alcantara
Specialist in Social Policy

Emilie Stoltzfus
Specialist in Social Policy

Of the more than 400,000 children in foster care on a given day, as many as 24,000 (about 6%) receive Supplemental Security Income (SSI) or other Social Security benefits. Some research suggests that a greater number of children in foster care might be eligible for SSI benefits if this assistance was sought. SSI benefits are available under Title XVI of the Social Security Act for certain disabled children from families with low incomes and minimal assets. Other Social Security benefits may be paid under Title II of the act to the children of workers who have retired, become disabled, or died.

Federal regulations require that in most cases the Social Security Administration (SSA) select and assign a representative payee—an individual, organization, or government entity—that manages SSI and Social Security payments for children, including those in foster care. Nearly all states designated as the representative payee for a foster child use the child’s benefits to support the child in foster care. In Washington State Department of Social and Health Services v. Guardianship Estate of Keffeler (hereafter Keffeler), the Supreme Court held that the process used by the state of Washington to keep the Social Security benefits received as a child’s representative payee was not prohibited by the Social Security Act. The Court also concluded that the use of funds for reimbursement for foster care services was consistent with the act’s provisions that such funds be spent for the “use and benefit of the beneficiary” and within the regulatory definition of “current maintenance” (i.e., food, clothing, shelter, medical care, and personal comfort items).

Although the Keffeler decision supports states’ practice of using SSI and other Social Security benefits for reimbursement of foster care, some child advocates assert that by using these benefits to reimburse the cost of foster care, the state agency denies the child beneficiaries funding that rightly belongs to them. Advocates also raise concern that child welfare agencies are often automatically assigned as the representative payee for foster children. On the other hand, child welfare agencies and advocates argue that if states were not able to use benefits to pay for a child’s foster care, they would stop screening children to determine their eligibility for these Social Security programs. They further raise the concern that if a foster child’s SSI benefits were allowed to accumulate in a savings account, the child would soon surpass the “means test” for SSI and would lose eligibility for the benefits.

Changes governing how child welfare agencies are assigned as representative payees or how they use the Social Security benefits of foster children would require congressional action. For example, Congress could permit or require states that act as representative payees to “pass through” some or all benefits to eligible foster children and those children could receive a portion of the benefits while in care and/or upon leaving care. Congress could also make changes to the selection of representative payees so that certain individuals, such as the child’s attorney, would have the opportunity to serve as the payee.

Legislation has been introduced that would prohibit using SSI or Title II Social Security benefits to reimburse a state for foster care maintenance payments; require state child welfare agencies to screen foster children for benefits; and for any foster child already receiving benefits, it would also require the state to develop a plan to “conserve benefits not necessary for the immediate needs of the child” to enable the child to “achieve self-support after leaving foster care.” 

Date of Report: September 26, 2012
Number of Pages: 36
Order Number: RL33855
Price: $29.95

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