By Jill Bauer
Every year, 1,600 youth age out of foster care in Michigan. While most children of intact families can expect continued financial and emotional support, kids who age out of foster care find themselves, on their own, overnight.
Legal Services of South Central Michigan (LSSCM) houses a “IVE” program that focuses on ancillary or preventative legal needs for families impacted by the child welfare system or who are at risk of impact if their legal needs are not addressed. One of the populations we receive referrals for is youth who are aging out of foster care or who have already aged out. A common issue is how their Social Security benefits are impacted by being in foster care.
Youth who age out of the foster care system often reach adulthood with few resources. They are some of our most vulnerable citizens, often turning eighteen without a personal network, financial literacy and the necessary support, guidance, knowledge, and counseling that many people who were raised by their birth families might take for granted.
The first barrier to success is often very practical, though. They need a stable income so that they can maintain housing. Some opt into independent living programs that provide small monthly stipends to help ease the transition from foster care into total financial self-sufficiency. These same youth may be qualified to receive Social Security benefits, either due to a disability or because they can receive survivor benefits from a parent. Historically, any Social Security benefits that a foster child is entitled to have has been collected by the Michigan Department of Health and Human Services (MDHHS). Sometimes the foster child or adult who has aged out of foster care is not aware that their Social Security benefits exist. Current rules and procedures have not required MDHHS to inform children of the existence of these financial resources and, for the most part, the children have not directly received any of their Social Security benefits.
The justification for this practice has been that the child’s resources should be used to reimburse the state for the cost of the child’s care. Once a foster youth ages out of the foster care system, the independent living stipend they receive is routinely hundreds of dollars less per month than their Social Security income. Youth who qualify for Social Security benefits have historically paid all of their benefits into a foster care system that is required to support them regardless of their personal resources. Potentially, they have paid for their own care (and possibly someone else’s when their personal resources exceed the amount being spent on them), but there has been no mechanism in place to sequester any portion of a youth’s money for their benefit. The result is that foster youth who have resources are required to pay for their own foster care, while children who do not have resources are completely supported by the state. One youth commented that if he knew he was paying for his terrible foster care experiences, he would have asked for a refund.
If a child has been approved for Social Security benefits, this means that the Social Security Administration has determined that a child either needs the extra resources due to a disability, or the parent created an entitlement for the child by creating the requisite work record. These monies belong to these children, not the state that has an obligation to provide their care whether they have an income or not. It is unjust for the benefits to be taken away from the children.
If you represent a child of any age who is in foster care, find out if they are receiving Social Security benefits. If they are not, but you think they should be, it is relatively easy to apply over the phone. If your client already receives social security benefits or is approved while you represent them, there are some things that you can do to improve your client’s financial situation. It is possible to have your client’s representative payee changed from MDHHS to a responsible individual who will conserve the funds for the benefit of the youth. The representative payee could be a family member, fictive kin or even you, the attorney. This approach is the best way to ensure that your client’s social security monthly payments are not used to pay for their foster care. They will, instead, be available to pay for necessary extras that foster care does not cover or will be conserved to provide funds for young adulthood. For example, a youth receiving SSI benefits could accrue $11,604 this year if the benefits are preserved. Just a couple of years of unspent benefits could provide a car, an apartment security deposit, and other needs that cannot be met by Social Security or an Independent living stipend alone.
If your client has reached an age where they are receiving an independent living stipend, it is common for the Social Security Administration to incorrectly treat such funds as income and use them to offset Social Security benefits. It reduces the monthly amount that the youth receives and causes uncertainty around how much reliable income they will receive to sustain lease obligations and other survival expenses.
The incorrect designation of these benefits as “unexcludable” income can be successfully challenged. Social Security does not offset payment amounts with other types of unearned income provided as public benefits, such as food assistance. By the same reasoning, independent living stipends are government-sourced benefits that fall into a category of unearned income that is distributed to aid socially disadvantaged children who have been subjected to abuse and neglect. As such, they should be excluded from Social Security benefits calculations – much like food assistance.
Receiving both independent living stipends and Social Security benefits can provide a financial cushion for youth who have aged out of foster care and are only able to rely on their own resources as they enter adulthood. Optimizing the combination of these benefits can make a difference between being stable and housed or being homeless.
Foster children start their adult lives disadvantaged in multiple ways. If you have the opportunity to preserve and improve their income stream to ease their transition to living independently as an adult, you can make a huge difference.
If you need a memo outlining the basis for excluding independent living stipends from Social Security benefit calculations, feel free to reach out to me at jbauer@lsscm.org.
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Jill Bauer is a staff attorney at Legal Services of South Central Michigan. Bauer can be reached at jbauer@lsscm.org. The column is reprinted with permission from the Washtenaw County Bar Association newsletter Res Ipsa Loquitur.
Every year, 1,600 youth age out of foster care in Michigan. While most children of intact families can expect continued financial and emotional support, kids who age out of foster care find themselves, on their own, overnight.
Legal Services of South Central Michigan (LSSCM) houses a “IVE” program that focuses on ancillary or preventative legal needs for families impacted by the child welfare system or who are at risk of impact if their legal needs are not addressed. One of the populations we receive referrals for is youth who are aging out of foster care or who have already aged out. A common issue is how their Social Security benefits are impacted by being in foster care.
Youth who age out of the foster care system often reach adulthood with few resources. They are some of our most vulnerable citizens, often turning eighteen without a personal network, financial literacy and the necessary support, guidance, knowledge, and counseling that many people who were raised by their birth families might take for granted.
The first barrier to success is often very practical, though. They need a stable income so that they can maintain housing. Some opt into independent living programs that provide small monthly stipends to help ease the transition from foster care into total financial self-sufficiency. These same youth may be qualified to receive Social Security benefits, either due to a disability or because they can receive survivor benefits from a parent. Historically, any Social Security benefits that a foster child is entitled to have has been collected by the Michigan Department of Health and Human Services (MDHHS). Sometimes the foster child or adult who has aged out of foster care is not aware that their Social Security benefits exist. Current rules and procedures have not required MDHHS to inform children of the existence of these financial resources and, for the most part, the children have not directly received any of their Social Security benefits.
The justification for this practice has been that the child’s resources should be used to reimburse the state for the cost of the child’s care. Once a foster youth ages out of the foster care system, the independent living stipend they receive is routinely hundreds of dollars less per month than their Social Security income. Youth who qualify for Social Security benefits have historically paid all of their benefits into a foster care system that is required to support them regardless of their personal resources. Potentially, they have paid for their own care (and possibly someone else’s when their personal resources exceed the amount being spent on them), but there has been no mechanism in place to sequester any portion of a youth’s money for their benefit. The result is that foster youth who have resources are required to pay for their own foster care, while children who do not have resources are completely supported by the state. One youth commented that if he knew he was paying for his terrible foster care experiences, he would have asked for a refund.
If a child has been approved for Social Security benefits, this means that the Social Security Administration has determined that a child either needs the extra resources due to a disability, or the parent created an entitlement for the child by creating the requisite work record. These monies belong to these children, not the state that has an obligation to provide their care whether they have an income or not. It is unjust for the benefits to be taken away from the children.
If you represent a child of any age who is in foster care, find out if they are receiving Social Security benefits. If they are not, but you think they should be, it is relatively easy to apply over the phone. If your client already receives social security benefits or is approved while you represent them, there are some things that you can do to improve your client’s financial situation. It is possible to have your client’s representative payee changed from MDHHS to a responsible individual who will conserve the funds for the benefit of the youth. The representative payee could be a family member, fictive kin or even you, the attorney. This approach is the best way to ensure that your client’s social security monthly payments are not used to pay for their foster care. They will, instead, be available to pay for necessary extras that foster care does not cover or will be conserved to provide funds for young adulthood. For example, a youth receiving SSI benefits could accrue $11,604 this year if the benefits are preserved. Just a couple of years of unspent benefits could provide a car, an apartment security deposit, and other needs that cannot be met by Social Security or an Independent living stipend alone.
If your client has reached an age where they are receiving an independent living stipend, it is common for the Social Security Administration to incorrectly treat such funds as income and use them to offset Social Security benefits. It reduces the monthly amount that the youth receives and causes uncertainty around how much reliable income they will receive to sustain lease obligations and other survival expenses.
The incorrect designation of these benefits as “unexcludable” income can be successfully challenged. Social Security does not offset payment amounts with other types of unearned income provided as public benefits, such as food assistance. By the same reasoning, independent living stipends are government-sourced benefits that fall into a category of unearned income that is distributed to aid socially disadvantaged children who have been subjected to abuse and neglect. As such, they should be excluded from Social Security benefits calculations – much like food assistance.
Receiving both independent living stipends and Social Security benefits can provide a financial cushion for youth who have aged out of foster care and are only able to rely on their own resources as they enter adulthood. Optimizing the combination of these benefits can make a difference between being stable and housed or being homeless.
Foster children start their adult lives disadvantaged in multiple ways. If you have the opportunity to preserve and improve their income stream to ease their transition to living independently as an adult, you can make a huge difference.
If you need a memo outlining the basis for excluding independent living stipends from Social Security benefit calculations, feel free to reach out to me at jbauer@lsscm.org.
—————
Jill Bauer is a staff attorney at Legal Services of South Central Michigan. Bauer can be reached at jbauer@lsscm.org. The column is reprinted with permission from the Washtenaw County Bar Association newsletter Res Ipsa Loquitur.
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