Request for Information: Use and Conservation of Social Security Benefits and Supplemental Security Income (SSI) Payments That Representative Payees Receive for Beneficiaries Residing in Foster Care

SUPPLEMENTARY INFORMATION:

Some children in foster care are eligible for various types of Federal benefit payments. Among the Federal payments that may be available to children in foster care are Social Security benefits and Supplemental Security Income (SSI) payments. Because of the importance of these Federal benefits received by members of this vulnerable population, we address these benefits and their operation specifically in this RFI. While the scope of this RFI is limited to Social Security benefits and SSI payments, we recognize that this issue is broader than just those Federal benefits paid by SSA.

Children can become eligible for Social Security benefits because of the disability, retirement, or death of a parent, and can become eligible for SSI because of their own disability. Whether these children receive benefits during their stay in foster care, and how benefits are managed on their behalf if they do receive them, have emerged as complex policy and operational issues in recent years. This RFI seeks to better understand relevant policy issues to inform HHS's and SSA's joint consideration of how to meet the goals of the respective foster care and Social Security programs to promote positive outcomes for children. This notice first describes what we understand about this population of children and the policy and operational issues related to their Federal benefits, and it then invites the public to answer specific questions to help inform our next steps. To achieve our goals, we seek to receive responses from a host of interested partners, including States, Tribes, grantees, and community providers, and we also strongly encourage responses from respondents with lived experience of SSA benefits, youth, parents, relatives, caregivers, foster and adoptive parents, advocacy and philanthropic organizations, and anyone else with an interest in this issue area.

Profile of SSA Beneficiary Children in Foster Care

SSA provides benefits to about 27,000 children in foster care (5.3% of all children in foster care). These children receive benefits from one or both of the following programs:

1. SSI, for which children may qualify if their medical conditions meet the statutory definition of disability, as well as certain financial requirements, or,

2. Social Security, for which children may qualify based on the disability, retirement, or death of an insured parent.

Among children in foster care who receive SSA benefits, about half receive Social Security (typically after the death of a parent) and about half receive SSI. A small percentage of children in foster care receive both Social Security and SSI concurrently.

Some children enter foster care already receiving SSA benefits. Others begin receiving benefits after their foster care placement. A typical child in foster care spends less than two years in care. About one-third of children exiting foster care in FY 2022 spent less than a year in care, and about 63 percent spent less than two years in care.

About nine percent of youth who exited foster care in FY 2022 did so by aging out, meaning the youth reached an age where they are no longer eligible for foster care services. Youth typically age out of foster care between the ages of 18 and 21 years, depending on the State. Many of these youth exit foster care with limited resources to support themselves during this significant transition. Former foster youth are at increased risk of homelessness, early parenthood, and substance abuse. Extended foster care is available in most States to help meet housing, education, medical, and other needs of youth up to age 21 at State discretion, who would otherwise have aged out of foster care. Children who received SSA benefits are about as likely as other children to have emancipation ( i.e. aging out) or extended foster care as their case plan goal.

Aging out of foster care poses additional challenges for receipt of SSA benefits. All children receiving SSI face an eligibility redetermination at age 18. If they are in foster care, child welfare agencies can assist with completing the redetermination process. Children who do not receive SSI, particularly those who are ineligible because of receipt of Federal foster care payments that end at age 18, may apply for SSI under a special application procedure for transition-age foster youth. When the child meets certain requirements, SSA will accept an SSI application up to 180 days before foster care payments are to end. Many SSI recipient children have their SSI payments ceased at age 18 because they have not established that they continue to meet the SSI eligibility criteria (either the adult disability criteria or the SSI financial criteria). Like children who age out of foster care, children whose SSI payments cease at age 18 face many significant challenges. These challenges can include unstable housing, homelessness, and difficulty with employment and educational attainment. Often as a result of such instability, they are twice as likely to be charged with income-generating crimes than they are to maintain steady employment.

The demographics of children in foster care differ somewhat between SSA beneficiary and nonbeneficiary children. The median age of a child entering foster care in FY 2022 was six years old. However, children in foster care receiving Social Security benefits and SSI payments are older, on average, than those not receiving benefits. Nearly half of SSA beneficiary children in foster care have a disability, compared to about a quarter of children in foster care not receiving benefits—likely due to the fact that SSI eligibility is based on having a qualifying disability. Finally, children in foster care are disproportionately non-White. However, those receiving Social Security or SSI are more likely than average to be White and less likely to be Hispanic than other foster youth.

Importance of SSA Benefits for Children in Foster Care

Receiving SSA benefits is very important and a critical resource to all eligible children and their families. The death of a parent can have lasting effects on family stability, financial standing, and children's well-being. Families raising children with disabilities face higher costs, more demands on their time, and more insecurity than families not caring for a child with a disability. SSA benefits are valuable, averaging $1,104 per month for Social Security child survivors and $821 for child SSI recipients in August 2024. The income that SSA benefits provide can stabilize family finances and help meet children's material needs.

Potential eligibility among children in foster care appears to be higher than average, according to research that estimated more than 20% of children in foster care have health conditions that likely make them eligible for SSI. Children whose parents die are also more likely to be placed in foster care and may be eligible for SSA benefits. Despite higher-than-average potential eligibility, the rate of children in foster care receiving SSA benefits is only a little higher than the overall rate. In addition, the rate of SSA benefit receipt among children in foster care varies dramatically by State, with five States reporting that between 13% and 24% receive benefits while nine States reported that less than two percent receive SSA benefits.

Child welfare agencies can play an important role in ensuring that eligible children receive SSA benefits. By law, agencies must provide reasonable efforts to prevent foster care placements and facilitate reunification or permanency—but they have significant flexibility in how to meet this requirement for families. We know that access to economic and concrete supports—for example, Supplemental Nutrition Assistance (SNAP) benefits, child care, and SSA benefits, when applicable—can help keep families together.

If children are placed in foster care, many child welfare agencies screen children for potential eligibility for Social Security benefits and SSI payments as part of their case planning activities. States also consider eligibility for and use of other funding sources to meet children's needs, including Title IV-E funds for children from low-income families and State funds. The decision whether to seek SSI payments on behalf of a child who also qualifies for Title IV-E foster care payments is complicated by the fact the Social Security Act requires that the SSI payment amount be reduced and receiving Title IV-E foster care payments could even affect a child's SSI eligibility.

The presence of economic and concrete supports, such as monthly SSA benefits, can also speed children's reunification with their families. Income from SSA benefits can also enhance economic stability for children who achieve permanency with other caregivers. Children receiving Social Security survivors benefits who are adopted may also continue to receive benefits.

Representative Payees for Children in Foster Care

SSA generally appoints a representative payee (payee) to manage the benefits of a minor child. A payee is a person or organization appointed by SSA to receive and manage the Social Security benefits or SSI payments on behalf of a beneficiary or recipient. When SSA selects a payee, the agency's primary concern is to choose someone who will best serve the child's interest. For most child beneficiaries, their parents serve as payees. However, when parents are not willing, able, or suitable to serve as payees—as is more often the case for children in foster care—SSA must turn to alternatives.

SSA regulations establish a preferred order of selection for payees. For child beneficiaries, the preferred order is:

(1) A natural or adoptive parent with custody or a legal guardian;

(2) A natural or adoptive parent who does not have custody of the beneficiary, but is contributing toward the beneficiary's support and is demonstrating strong concern for the beneficiary's well being;

(3) A natural or adoptive parent who does not have custody of the beneficiary and is not contributing toward his or her support but is demonstrating strong concern for the beneficiary's well being;

(4) A relative or stepparent who has custody of the beneficiary;

(5) A relative who does not have custody of the beneficiary but is contributing toward the beneficiary's support and is demonstrating concern for the beneficiary's well being;

(6) A relative or close friend who does not have custody of the beneficiary but is demonstrating concern for the beneficiary's well being; and

(7) An authorized social agency or custodial institution.

This order is flexible, and SSA rules allow for selecting a payee lower on the preference list when it would be in the beneficiary's best interest. SSA policy is to not automatically select the child welfare agency as the payee for a child in foster care. Appointment of a payee is an individualized determination to identify and select the person or organization who will serve the best interest of the child. A child welfare agency is sometimes the legal guardian of a child in foster care—making the agency the first choice as payee. However, we will appoint a willing and able relative or friend who will serve the child better if one is available. SSA is not always able to identify a suitable alternative to the child welfare agency. Currently, nearly three-quarters of SSA beneficiary children in foster care have a child welfare agency as their payee.

Children's payees must use SSA benefits for the use and benefit of the children, in ways that the payee determines, under SSA's rules, to be in the child's best interests. Payees must first use the benefits for the child's current maintenance, which includes food, shelter, clothing, medical care, and personal comfort items. For children in foster care, the rules permit child welfare agencies or other payees to use children's SSA benefits to pay for monthly foster care maintenance payments. Child welfare agencies also use SSA benefits to meet children's other needs, such as education, medical, or discretionary expenses. After meeting the child's immediate or foreseeable needs, all payees are required to conserve any benefits for their future use, such as by saving or investing those funds. When a child beneficiary in foster care has a payee who is someone other than the child welfare agency, it is that payee who must use the benefits for the child's current and foreseeable needs, and conserve any remainder.

In 2023, SSA paid approximately $190 million in Social Security benefits and SSI payments to children in foster care who have a child welfare agency as their payee. In this same year, all 50 States and the District of Columbia conserved some portion of the SSA benefits that they received, with the percentage by State ranging from less than one percent to 31 percent. On average, child welfare agencies conserved 12 percent of SSA benefits paid to children in foster care. The percentage of child beneficiaries in foster care who had some funds conserved on their behalf ranged by State between one percent and 81 percent. On average, child welfare agencies conserved SSA benefits for 36 percent of child beneficiaries in foster care.

Conserving SSI payments for children in foster care can pose challenges. SSI has a resource limit of $2,000, which could include funds in a child's savings account or investments. SSI recipients who exceed the resource limit are suspended and eventually terminated from program participation if their savings remain above the limit for over a year. They (or their payees on their behalf) must repay any benefits paid while they were over the limit. The Achieving a Better Life Experience (ABLE) Act of 2014 allows States to create programs with tax-advantaged savings accounts for eligible people with disabilities; funds held in ABLE accounts up to and including $100,000 do not count toward the SSI resource limits. Account owners may receive tax advantages when funds from an ABLE account are used to pay for a broad set of “qualified disability expenses,” including housing, transportation, health, and basic living expenses. Additionally, special needs trusts may also contain funds that do not count toward the SSI resource limit.

Generally, if there is a change in payee, the former payee must return any conserved funds to SSA to be reissued to the successor payee. If the child stops receiving benefits or no longer needs a payee (typically when they turn 18), the payee must return any conserved funds, including any earned interest, to SSA to be reissued to the beneficiary or recipient. On a case-by-case basis, SSA may permit the former payee to transfer any conserved funds directly to the successor payee or the beneficiary or recipient.

All payees have reporting responsibilities. They must report any changes that could affect the beneficiary's eligibility or benefit amount and any change that would affect the payee's suitability to serve (such as a change in custody). SSA requires certain payees, including child welfare agencies, to report annually on who made the decisions on how benefits were spent or saved, how the payee used the benefits, how much of the benefits were saved, and how those savings were invested. A payee's answers may cause SSA to further investigate the payee or initiate a site review. Protection and Advocacy agencies in each State conduct payee site reviews, which include a face-to-face meeting with the payee, an examination of the payee's financial records and supporting documentation.

State Policy and Federal Technical Assistance

Some State legislatures and child welfare agencies have recently changed their policies for SSA beneficiary children in foster care, such as requiring child welfare agencies to screen and apply for Social Security and SSI benefits on behalf of children placed in foster care and requirements to conserve some or all benefits for the children's later use. SSA and the Children's Bureau have worked together to provide guidance and technical assistance to child welfare agencies as they consider and make these changes. However, advocates and policymakers continue to consider whether and how additional changes and clarifications to the policies and practices regarding Social Security benefits and SSI payments when child welfare agencies are payees could improve service to and outcomes for children in foster care.

Request for Information

This request is to gather information for our internal planning purposes only and should not be construed as a solicitation or as an obligation on our part or on the part of any participating Federal agencies. We seek to learn more from people with experience with foster care, such as current and former foster youth, foster parents, adoptive parents, and parents whose children were referred to child welfare. We also invite comments and suggestions from State and local child welfare agencies, Tribal Nations, community-based and other non-profit organizations, researchers, and other interested members of the public. Responses to this request will inform our decisions about possible future policy changes or additional guidance.

We ask respondents to address the following questions, where possible, considering the context discussed in this document. You do not need to address every question and should focus on those that relate to your lived experience, expertise or perspectives. To the extent possible, please clearly indicate which question(s) you address in your response.

Application

• For children who have contact with the child welfare system but who are not in foster care, what opportunities or challenges exist for child welfare agencies to assist with screening children for SSA benefit eligibility and applying for benefits?
• What opportunities or challenges exist for child welfare agencies to apply for SSA benefits on behalf of children in foster care or living away from their parents with other caregivers? Are there differences depending on whether the child or their family are eligible for other public benefits, such as preventative child welfare services, TANF, SNAP, or title IV-E foster care payments?

SSA Benefit Use and Conservation

• Current SSA rules allow payees, including child welfare agencies, who serve children in foster care to use SSA benefits to pay for the child's current needs, including the cost of monthly foster care maintenance payments. Payees must conserve SSA benefits for future use only after meeting all of the child's current and foreseeable needs. How effectively do these rules contribute to the ability of child welfare agencies to serve children in foster care? Are there differences depending on whether the child receives Social Security benefits or SSI payments?
• Please describe if it would be beneficial to offer additional guidance or clarification related to when Social Security benefits or SSI payments must be conserved by payees, including, as applicable, child welfare agencies, or expand on what kinds of factors should be considered in a conservation decision.
• For child welfare agencies that serve as payees for children in foster care, how do you make decisions about the use and conservation of the children's SSA benefits? What do you do with SSA benefits that are not used as part of the monthly foster care maintenance payment?
• For child welfare agencies that serve as payees for children in foster care, a child may be eligible to receive benefits from various sources, including Federal, State, and local. What are the benefits in using SSA benefits before or after other sources of funding to cover the costs of the child's foster care maintenance?
• For child welfare agencies, if you were required to conserve SSA benefits on behalf of eligible children in foster care, would that affect the agency's decision about whether to screen or apply for SSA benefits on behalf of a child?
• What would be the implications or challenges if child welfare agencies are restricted from using SSA benefits for foster care maintenance and required to conserve SSA benefits?
• For child welfare agencies that serve as payees for children in foster care, do you conserve any amount of the children's SSA benefits for future use? If not, why not? If you do, how do you determine how much to conserve? Do you hold the funds, such as in a savings account or a trust account? Do you use Achieving a Better Life Experience (ABLE) accounts or special needs trusts to conserve funds? What are the benefits of and impediments to using ABLE accounts or special needs trusts? Does the decision on whether to conserve benefits depend on the type of benefit provided to the child (e.g., Social Security, SSI, foster care maintenance payments, etc.)?
• For current and former foster youth, what current needs would be met if you had access to your conserved SSA benefits? Are there examples of current needs that are not commonly met by the monthly foster care maintenance payments? If so, which needs?

General

• Are there other aspects of HHS's or SSA's programs where guidance, technical assistance, or information can be offered or improved to better support children in foster care or otherwise in contact with the child welfare system?

Guidance for Submitting Documents

We ask that each respondent include the name and address of his or her institution or affiliation, if any, and the name, title, mailing and email addresses, and telephone number of a contact person for his or her institution or affiliation, if any.

[FR Doc. 2024-25462 Filed 10-31-24; 8:45 am]

BILLING CODE 4191-02-P