Foster kids put in a financial hole

Amber was in and out of Atlanta area foster homes throughout her teen years. Shortly after she turned 18, she began receiving Social Security death benefit checks, which she had been entitled to for years. She had no idea why she started receiving them, because she had no idea she was eligible.

That’s because the state of Georgia had been intercepting these checks to reimburse itself for the cost of Amber’s foster care, a practice currently allowable under law. When the state discovered the federal government had begun sending these checks directly to Amber, it came after her, demanding she surrender all of the money to them to pay for services she continued to receive or risk being forced out of the only stable foster home she had known.

It took several legal aid attorneys and social workers to convince the state that it should let Amber keep half the benefits. So after being abused and neglected by her birth parents and shifted from home to home during her formative teen years, Amber wound up sharing the cost of her own foster care. If all her Social Security benefits had been set aside for her from the beginning, instead of being confiscated by the state, Amber would have had a better shot at transitioning out of foster care and into self-sufficiency.

States are grabbing close to $200 million annually in Social Security survivor and disability benefits that foster children are entitled to. Frequently, states apply for these benefits without even telling the kids they’re eligible, then keep the funds. For the states, this money is relatively insignificant, but for the kids it can be a lifeline — funds to get started in life with their own apartment, pay for college tuition or buy a car for getting to work.

Rather than create financially independent young adults who can stand on their own when they age out of the system, this Dickensian practice creates impoverished youths who frequently end up needing publicly supported shelter, job training, medical care, clothes and other basic necessities.

In addition, foster children increasingly are becoming the victims of identity theft because their personal information passes through many hands, increasing the chances that someone will open an account in their name or use their Social Security number. Many foster children leave care with ruined credit histories — saddled with defaulted car loans, mortgages and credit cards they never had.

A new report from the Children’s Advocacy Institute at the University of San Diego School of Law and First Star, “The Fleecing of Foster Children: How We Confiscate Their Assets and Undermine Their Financial Security,” highlights these counterproductive practices and advocates for federal legislation to protect the 30,000 teenagers a year who age out of foster care.

Two bills in Congress would give these kids a better chance at self-sufficiency.

The Foster Youth Self-Support Act would ensure that states determine if foster kids are eligible for benefits and then use the funds for their needs rather than as a source of revenue. By safeguarding benefits, the state would create a basic safety net for children when they age out of care. The bill also would require agencies to create “Individual Development Accounts” as part of a plan for each child receiving benefits to secure housing, education or job training.

The Foster Youth Financial Security Act would end the use of Social Security numbers as an identifier and require that all foster children have their credit histories cleared of inaccuracies before leaving state care.

In the current budgetary climate, it’s important to note that these bills carry few real costs, and in fact, would result in long-term savings. Yet, the changes will make it much easier for foster kids to get on their feet financially and become productive members of society. States would forgo the miniscule amounts of money they are grabbing from foster kids but recoup the funds many times over when these kids get jobs, pay taxes, and stay out of trouble.

Restoring sanity to a system that trips up kids such as Amber will inject true family values into foster care agencies that need to be reminded whose interests they represent.

Kirsten Lynette Widner is the director of policy and advocacy at the Barton Child Law and Policy Center at Emory University School of Law in Atlanta.