California Child Welfare Agencies Under Fire for Pocketing Foster Kids’ Social Security Money

California Child Welfare Agencies

A California grandmother fights to retrieve $30,000 taken by San Diego County from her grandchildren’s survivor benefits. Counties take millions of dollars in federal benefits from foster children, says a lawmaker trying to stop it.

By Jeanne Kuang, CalMatters

In December 2019, a month after her son’s death, Patricia Baca contacted the federal government to provide for her surviving grandchildren.

The twins, just 3 at the time, had lived a difficult first few years of life. San Diego County had removed them from their parents’ custody that year due to allegations of drug and alcohol abuse and domestic violence in the home, Baca said. The brother and sister were in foster care with Baca when their father died in an accident. 

Hoping to secure the children a future nest egg, Baca filed for them to receive survivor’s benefits from the Social Security Administration for children whose parents have died. 

But it was the twins’ legal parent at the time — the San Diego County Health and Human Services Agency — that stepped in to receive their money. For the next two years, the county put their survivors’ benefits into its own coffers. Records show it was an effort topay itself back for having issued monthly checks to Baca to cover the children’s basic needs. 

According to county and federal records Baca showed to CalMatters, the money taken totaled nearly $15,000 per child. Baca said she received foster care checks of about $1,000 a month per child, meaning the county partially recouped its costs using the Social Security benefits.

The funds seizure is common among child welfare agencies in California and nationwide – and it’s legal. 

But forces are building to halt the practice, which advocates say has been in place for at least two decades. A growing number of states are banning it, and advocates are seeking to eliminate it in California through a court challenge and a bill set to be introduced in the state Legislature next week. 

Offsetting costs

San Diego County said it halted the practice last year and now saves foster youth’s benefits in reserve accounts for them. But it didn’t repay Baca’s grandchildren. She has lost two state administrative hearings trying to get the money paid back, with the county telling her it would not pay retroactively and the state’s Department of Social Services ruling it did not have jurisdiction. 

A county spokesperson declined to comment on Baca’s grandchildren’s case, citing confidentiality concerns.

The children are now 7. Baca and her husband, both retired, had hoped the money would help their grandchildren support themselves when they’re older.

“They’ve been traumatized, they’ve been taken from their family and now they’ve lost a parent,” she said in an interview, adding she would say to county and state officials: “This is their money, and you’re stealing it.”

Acting on behalf of foster youth in their care, agencies can apply for and receive children’s Social Security benefits. 

That can include survivor benefits or, more commonly, a disability benefit known as Supplemental Security Income (SSI). In rarer cases they also apply for veterans’ benefits earmarked for the children of those who died in military service.

Bystate law, counties must use the money in the child’s best interests. One allowable use is to “offset” the agencies’ costs for providing foster care. 

For youth in state custody who don’t qualify for such benefits, counties pay for foster care using existing funding — a mix of federal, state and local money.

Youth at risk

Opponents of the reimbursement practices say it’s an inappropriate use of money meant for the most vulnerable young people in state custody — those with disabilities and those who will age into adulthood without parental support.

Foster youth are at higher risk than other children of falling into poverty and homelessness in adulthood. A long-term study in California in 2020 found that a quarter of former foster youth were sleeping in shelters or temporarily unhoused after exiting foster care.

Advocates say often youth and their families don’t even know their county has applied for and taken their Social Security benefits. 

Assemblymember Isaac Bryan, a Culver City Democrat, is authoring a bill that would prohibit counties from using federal benefits to defray foster care costs. It also would direct child welfare agencies to use the money for the children directly, which could include preserving it for their futures.

The bill would apply to foster youth going forward, but it would not help those like Baca’s grandchildren who already had their benefits taken. 

Few of California’s roughly 50,000 foster kids get Social Security benefits, advocates say, but the state does not track how many have had their funds withheld by the counties.

Los Angeles County has the greatest share of the caseload, with custody of about a third of the state’s foster children. The county’s Department of Children and Family Services receives the benefits of about 600 children in its custody in any given month, a spokesperson told CalMatters last year. In 2021 the county took $5.4 million of children’s Supplemental Security Income or survivor benefits as reimbursements.

A funding stream

CalMatters also reported that Kern County in 2021 offset $313,000 of its foster care costs by taking benefits from 56 youth. And San Diego County in the 2021-2022 fiscal year took about $137,000 from 13 youth.

In total California’s child welfare system costs about $5 billion annually, according to the research center Child Trends. The amount taken from youth benefits as reimbursement makes up a fraction of that – as much as $39 million, Bryan’s office estimates. 

Bryan’s legislation, a placeholder that will be amended next week, has yet to be heard in a committee. Itcomes as other states and cities have already agreed to limit the seizure of foster youth’s benefits, including Illinois, Maryland, Connecticut and the cities of Philadelphia and Washington, D.C.

Hawaii last year stopped taking the benefits and opened bank accounts for foster youth who were receiving them. Washington state and Oregon are both weighing proposals this year to do so.

“They’ve been traumatized, they’ve been taken from their family and now they’ve lost a parent… This is their money, and you’re stealing it.”

PATRICIA BACA, FOSTER PARENT OF TWO GRANDCHILDREN

For years California’s advocates have pushed the state and counties to help foster youth apply for the federal benefits. While the children are under state and county care, county agencies have viewed the benefits as a funding stream. 

Many eligible youth do not know they can qualify, advocates say, and the application process is complex. California currently requires counties to screen foster youth for potential eligibility for Social Security assistance at the age of 16, but advocates say that leaves out many children who could be receiving it much earlier. 

Social Security ‘a potential lifeline’

Bryan’s bill would require counties to screen all youth for eligibility within two months of entering foster care. It also would require the county or state agencies to notify the youth’s family and attorneys when they apply for those benefits and to provide a regular accounting of the money received on a child’s behalf. 

Marisa Lopez-Scott, staff attorney at the Youth Law Center which is sponsoring Bryan’s bill, said this would help more children or their families continue receiving Social Security benefits even after leaving foster care. Those receiving supplemental security income could get it for the rest of their lives. 

“It is a potential lifeline,”  Lopez-Scott said.

Child welfare agencies should receive the money on behalf of foster youth only as a matter of last resort, according to federal regulations and state law.

Both list preferred alternatives: a child’s relative, an adult sibling or even a family friend who has demonstrated an interest in the child’s well-being.Child welfare agencies are last on the list.

But California counties have made themselves the recipients even when other relatives were available. 

Fiduciary duties

That’s what happened in Baca’s grandchildren’s case and in the case of another set of two children now suing San Diego County.

The children, two preteen sisters who have been in and out of foster care since they were 4 and 6, are now with an adoptive mother, Amy, who asked to be identified only by her first name to protect the children’s identity. 

The girls’ biological father died a few months before the second time the girls landed in foster care. Knowing their biological mother had been receiving survivor’s benefits on behalf of the children, Amy contacted the county and the Social Security Administration, to ensure another relative would get the girls’ benefits when they were in foster care. 

“The kids are going to need those eventually,” she said. “I thought the county would collect them but put them in trust for the kids.”

As their foster parent at the time, Amy wasn’t eligible to hold onto the benefits for the children. But she said the county never contacted the girls’ adult sibling or great aunt and instead applied to receive the money itself. The county collected it for about a year, stopping after the adoption went through. 

‘Most suitable payee’

Social Security spokesperson Patricia Raymond declined to comment on this case or Baca’s. She said that in cases where it must appoint someone to receive benefits on a child’s behalf,the agency “will investigate and appoint the most suitable payee.”

The Children’s Advocacy Institute, based at the University of San Diego law school, has sued the county for Amy’s adopted children’s benefits in San Diego County Superior Court. The suit accuses the county of violating its fiduciary duty toward the children, arguing that using the funds as reimbursement was not in the girls’ best interests.

San Diego County has not responded to the lawsuit in court and did not respond to a request for comment.

Amy and her husband now receive the benefits for the girls, ages 11 and 13. She said they use it for the children’s medical needs that the state doesn’t cover and they save the rest for college or other expenses when the girls turn 18.

Amy said she wants the county to pay back what it took – totalling just under $25,000 –  so she can add it to the girls’ fund.

“The ultimate goal for our family is to change policy,” Amy said. “We don’t want any other child to have to have this experience. These children, more than any, need this money.”

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