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


Publication Date: February 2007

Publisher: Library of Congress. Congressional Research Service


Research Area: Population and demographics; Social conditions



Supplemental Security Income (SSI) benefits are available under Title XVI of the Social Security Act for certain children with disabilities if their families have low incomes and minimal assets. Social Security benefits may be paid under Title II of the act to the children of workers who have retired, become disabled, or died. An estimated 30,000 children receive SSI or other Social Security benefits while in foster care.

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 as a funding stream for child welfare spending. 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).

While the Keffeler decision supports states' practice of using SSI and other Social Security benefits for reimbursement of foster care, some child advocates remain concerned that this practice is misguided. They assert that by using a child's SSI or other Social Security benefits to reimburse the cost of foster care, the state agency is denying these children funding that rightly belongs to them. Advocates also raise concern that child welfare agencies are often automatically assigned as the representative payee for children in foster care. On the other hand, child welfare agencies and other advocates argue that if states were not able to use benefits to pay for a child's foster care room and board, then states would simply stop screening children to determine their eligibility for these Social Security programs. They further argue that if child SSI beneficiaries were given all of their benefits while in care, they would accumulate assets in the form of savings and would be above the maximum resource level needed to maintain eligibility for the SSI program.

Changes governing how child welfare agencies are assigned as representative payees or how they use benefits to fund foster care under Title II and Title XVI would require congressional action. Some child welfare advocates support changes to the process for selecting representative payees, as well as increases in the asset limits for foster youth receiving SSI. They have also proposed changes to allow youth to retain a portion of their benefits. Two states -- California and New Mexico -- have recently proposed legislation to screen all youth for eligibility to give qualified foster youth some of their SSI or other Social Security benefits. This report will be updated periodically as legislative activity occurs.