Academic journal article Policy & Practice of Public Human Services

Funding for Children in Foster Care: The Keffeler Case

Academic journal article Policy & Practice of Public Human Services

Funding for Children in Foster Care: The Keffeler Case

Article excerpt

"At its own expense, the State of Washington provides foster care to certain children removed from their parents' custody, and it also receives and manages social security benefits for many of the children involved, as permitted under the Social Security Act and regulations. The question here is whether the state's use of social security benefits to reimburse itself for some of its initial expenditures violates a provision of the Social Security Act protecting benefits from 'execution, levy, attachment, garnishment, or other legal process.' We hold that it does not."

Justice David Souter

In February; the U.S. Supreme Court announced its decision in a case that did not make national headlines. Yet its potential impact on the practice of public child welfare agencies and the children in their care is significant.

The case, Washington State Department of Social and Health Services et al. v. Guardianship Estate of Danny Keffeler, concerned whether a state agency; such as Washington State's Department of Social and Health Services (DSHS), appointed by the commissioner of Social Security as a representative payee to administer the social security benefits of children in state foster care, may use those benefits to provide for the children's current care, maintenance, and special needs, consistent with their best interests. Reaching a unanimous decision, the Supreme Court has determined this practice does not violate the Social Security Act's anti-alienation provision (Section 407(a) of the act), which prohibits any creditor's efforts to attach social security benefits to pay for a beneficiary's debts.

The case had the potential to affect the manner in which all 50 states, the District of Columbia, and U.S. territories administer the social security benefits of many children in foster care and could result in states being held liable for billions of dollars of social security funds they have used to pay for the cost of foster care for children receiving social security benefits. To illustrate the magnitude of the issue, according to the most recent data from the U.S. Department of Health and Human Services, the number of children in foster care was 556,000 as of September 2000. Estimates of how many of these children have disabilities that would qualify them for social security benefits range from 13 percent to 40 percent.

The case was an appeal of a 5-3 Washington State Supreme Court decision, (1) which held that DSHS, serving as a child's representative payee, violates the Social Security Act's "anti--alienation" provision when it applies the child's social security funds to the cost of the child's current care in foster care. The Washington Court held that DSHS was acting as a creditor and had a conflict of interest as the representative payee when it used the child's benefits to cover the cost of foster care. It stated that "despite DSHS's status as representative payee, it performs the role of creditor when it takes the foster child's [benefits] to reimburse itself for moneys spent on the child."

Historical Perspective

Since the Supreme Court's decision in Sullivan v. Zebly, more than 10 years ago, many child welfare agencies have actively tried to identify children who might be eligible for Social Security Income (SSJ) benefits under Title XVI of the Social Security Act, as well as benefits under the Old Age, Survivors and Disability Insurance Program under Title II of the Social Security Act. In addition, advocates have also encouraged state child welfare agencies to identify and apply for these benefits for foster children.

Since then, states have, in varying degrees, applied for these benefits on behalf of foster children who appear to qualify, served as "representative payees," and used the children's social security benefits to pay for the cost of maintaining the children in foster care, including providing for their special needs. Over the years, however, there have been some concerns raised by advocates regarding both state agencies decisions whether to apply for SSI for foster children, and their conduct when they manage children's SSI benefits. …

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