States Confiscate Benefits of Foster Children

A recently released report indicates that $200 Million has been confiscated from foster children aging out of the system. The Children’s Advocacy Institute at the University of San Diego School of Law (CAI) and First Star have authored this report.

 

By the Numbers: “Each year, about 30,000 of the nation’s 500,000 foster children turn 18 and become legally emancipated. The rates of homelessness, educational failure and unemployment among these foster alumni far outstrip rates for other youths.”

Costs to Society: “The cost of young people aging out of the foster care system each year who can’t function properly on their own is approximately $5.7 billion, in the form of lost earnings (and thus lost tax revenues), criminal justice system expenditures, and government cash assistance and health programs. On an individual level, each foster youth who drops out of high school costs the public sector $209,100 over a lifetime due to lost wages and greater need for public support services.

”The system is failing foster children,” said Peter Samuelson, co-founder and Chairman of First Star. “The damage these children suffer by having no assets after foster care ends up costing society substantially more than the confiscation of their small funds. They depend entirely on the courts and state officials, and they have no place else to turn.””

Two Federal Bills: Two bills will be reintroduced in this Session.

The Foster Children Self-Support Act
This Bill was originally introduced in 2007 as HR1104 and died in the House Ways and Means Committee. Text can be found here. It was also introduced in 2010 as HR6192 and suffered the same fate as the 2007 bill.

“The Foster Children Self-Support Act would ensure that foster children are able to use their Social Security and Supplemental Security Income benefits to address their needs, improve their lives and create a basic safety net when they age out of foster care. Key provisions would:

• Restrict state agencies from using a child’s benefits as a general revenue source;
• Exclude conserved funds as well as personal earnings, inherited assets, and civil judgments from the $2,000 resource limit under the SSI program;
• Require that all foster children be screened for OASDI and SSI eligibility while in care, and require child welfare agencies to notify the child’s attorney and/or guardian;
• Develop and implement a “Plan for Achieving Self Support” that is specific to each child receiving Social Security benefits;
• Create an Individual Development Account (IDA) for each child receiving benefits, so that these Social Security assets would be conserved to assist the youth in obtaining housing, education, or job training after emancipation from foster care.”

The Foster Youth Financial Security Act

This Bill was originally introduced in 2010 as HR 6193 and died in the House Ways and Means Committee. No text is available.

“The Foster Youth Financial Security Act would require that states assist children in foster care in making the transition to independent living by redressing identity theft or credit fraud issues.

The legislation would:
• Ensure that youths transitioning out of care have basic documents and tools for achieving independence;
• Protect against identity theft and credit fraud by requiring that foster care agencies review the credit reports of all foster children, and take action to clear them if there is an inaccuracy, prior to leaving care;
• End the use of a child’s Social Security number as an identifier.

The bill would also ensure that youths leave foster care with the documents they need, and require agencies to help them apply for state benefits and financial aid, educate them about obtaining health and auto insurance, and provide them and any interested caretakers with financial literacy courses.”

Report: States Confiscate Benefits of Foster Children; Many Left Destitute as They “Age Out” of Care
[First Star press release 3/16/11]

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