Letting kids in foster care keep their own money: Is CWLA softening its opposition?

            The world of child welfare is filled with ugly little side streets and dark alleys – practices that may not affect huge numbers of children, relatively speaking, but which add insult to the injuries endured by some of the children already harmed by the foster care system.

            One of those dark alleys involves a practice that seems hard to believe: There are about 30,000 foster children eligible for some form of Social Security, usually disability of survivors benefits.  But, as is explained in this previous post, child welfare agencies typically swoop in and grab the money for themselves, so they can keep funding their foster care systems.  As I said last year, it’s worse than stealing candy from a baby.  But it’s perfectly legal.

            Up to now, the giant trade association for child welfare agencies, the Child Welfare League of America, has wanted to keep it that way.  After all, why should foster children get their own money when it can go to one of those oh-so-worthy CWLA member agencies instead?  So when Rep. Pete Stark (D-California) first introduced legislation to ban this practice, CWLA opposed it.  So did the Children’s Defense Fund, which has no interest in defending foster children against having their own money taken from them.  CDF is far more concerned that somewhere, somehow there might be a child welfare agency that has a little less money to use to throw children into foster care.

            That greedy stance is all the more amazing since while this money can make a huge difference to the individual foster children, it represents well under one percent of what government spends on child welfare every year.  That’s just one reason CDF really should change its slogan to “no dollar left behind.”

            Rep. Stark announced yesterday he is again introducing legislation to ban this practice. And judging by what longtime CWLA official Linda Spears told the Associated Press, they just might be modifying their position.  Said Spears:

            “In tough economic times, the states are between a rock and a hard place — they can’t afford services beyond the basic necessities. But the young person is there saying, ‘What about me?’ ... There’s so much in foster care that makes young people feel they’re not in charge of their lives, and that could be changed to give kids more say.”

            This is rather like saying “On the one hand you were mugged.  On the other hand, the mugger said he really needed the money.”  And it’s disingenuous since CWLA condoned this practice before the recession hit.  In fact, I’ve never known them to oppose this practice, no matter what the state of the economy,

            Still by CWLA standards, this may be progress.  Or it may be a calculation that the bill won’t pass, and they can remain neutral while still being sure the foster children won’t see their own money.

            Meanwhile Prof. Daniel Hatcher of the University of Baltimore continues to pursue his lawsuit challenging the practice in Maryland.  This greatly upset Judith Schagrin, assistant director for children’s services with the Baltimore County social services department.  She told AP that “States are not in fact maliciously stealing children’s money.”

            We didn’t say it was malicious.

Worse than stealing candy from a baby

            It sounds like something out of a bad melodrama:

            A child is placed in foster care, but before he can be reunited, his parents die.  As with many other children in that situation, he is entitled to Social Security “survivors” benefits.  But, being a child, the checks can’t simply be sent to him.

            Were the child living with, say, a grandparent or an uncle, that adult guardian would receive the checks and be responsible for spending it on the child’s behalf.  They might well put it away for the child’s college or some other future expense.

            But when the child is in foster care it is common for state and local child welfare agencies to rush forward and say to the Social Security Administration, in effect: “Just send the money to us.  Of course you can trust us.  After all, we’re a child welfare agency.”

            The agency then loots the money, sending it straight into its general fund to help pay to throw some other child into foster care – or for anything else it wants to do.

            Not only does this happen, it’s actually the norm for the relatively small proportion of foster children who qualify either for survivors or disability benefits from Social Security.

            And, believe it or not, under some circumstances, at least some of this cash grab is legal – the U.S. Supreme Court said so.

            In 2007, Rep. Pete Stark (D-California) introduced legislation to try to stop child welfare agencies from stealing foster children’s money.  But he ran into a wall of opposition from the foster-care industrial complex. 

The Child Welfare League of America opposed anything that would take money from its member agencies.  And the Children’s Defense Fund, whose slogan should be “leave no dollar behind” opposed it, too, apparently on the theory that the child welfare system does such a wonderful job on behalf of all foster children that it would be a shame if it lost any of its desperately-needed money – even the money that comes from foster children being forced to subsidize the system.

            But there are many reasons why this practice probably is not just unconscionable, immoral, and just plain evil, but also illegal.  And some of those grounds are the basis for a lawsuit from Baltimore.  The University of Baltimore Civil Advocacy Clinic is co-counsel for a former foster child suing the Baltimore County Department of Social Services.  Their press release tells the story well:

CHILD WELFARE AGENCY SUED OVER TAKING FOSTER CHILDREN’S ASSETS

BALTIMORE, MARYLAND, October 11, 2010 – The Baltimore County Department of Social Services (BCDSS) has secretly taken the only asset left to an orphaned foster child by his deceased father. 

In a lawsuit filed by the University of Baltimore Civil Advocacy Clinic and a Washington D.C. law firm, Alex M. alleges that BCDSS and the Maryland Department of Human Resources secretly applied for Social Security Old-Age, Survivors, and Disability Insurance benefits (“survivor benefits”) on Alex’s behalf when his father died, and took the money for the state’s fiscal self-interests rather than for Alex’s benefit.  Alex appealed a judge’s dismissal of the lawsuit, and an appellate brief has just been filed on his behalf in the Maryland Court of Special Appeals.

Alex was taken into foster care at age 12 when his mother died, and his father died soon after.  Alex never knew his father left him with an entitlement to survivor benefits, because BCDSS never told him.  BCDSS never told Alex it applied for the benefits, never told him it sought to become his representative payee to gain fiduciary power over the funds, and never told him it was routing his money into state revenue.  In fact, notices were sent by the Social Security Administration, intended to ensure Alex was aware of BCDSS’s actions, but they were received by BCDSS itself – and the agency never shared the notices with Alex.  Alex’s complaint alleges that while BDCDSS was taking his money, he was shuffled between over 20 different placements and was not provided adequate care by the agency – and he left foster care penniless. 

The agency sought to dismiss the lawsuit by arguing Alex’s claim should have been filed within one year of when the agency began taking his funds, although Alex had no knowledge of the agency’s actions.  Also, the agency argued that its practices of taking foster children’s assets are appropriate to reimburse state costs – although foster children have no statutory obligation to pay for their own care.  

An appellate brief has just been filed on Alex’s behalf by Professor Daniel L. Hatcher, who teaches in the University of Baltimore Civil Advocacy Clinic, and an amicus brief has been filed in support of Alex’s appeal on behalf of Maryland and national child advocacy organizations.  According to Hatcher, who also published a law review article and has testified before Congress regarding this practice, “the actions of BCDSS are unfortunately similar to those of foster care agencies across the country – converting foster children’s assets into state revenue, rather than using the funds to actually help the children.”

The lawsuit, and now the appeal, argue that BCDSS’s actions are unconstitutional, violate the Social Security Act, and violate the agency’s inherent fiduciary duty to serve the best interests of foster children.

Daniel L. Hatcher is an associate professor of law at the University of Baltimore, and he teaches in the Law School’s Civil Advocacy Clinic, in which law students and their faculty supervisors help low-income individuals and community organizations that could not otherwise afford legal representation.  The appellate brief and other court papers are available on request, and Hatcher’s law review article on this subject is available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=942007