New York City will stop collecting Social Security money from children in foster care

by Joseph Shapiro

Child welfare officials in New York City say they will stop collecting all of the Social Security checks from children in foster care and using that money to cover the costs of their care, altering a practice criticized by advocates for children. And those advocates say they hope New York's action becomes a model for agencies across the country.

Jess Dannhauser, commissioner of the Administration for Children's Services, New York City's child protection agency, says soon the Social Security money will be placed in savings accounts that children can access when they leave foster care–either when they return to family, are adopted or age-out of foster care between ages 18 and 24.

"This is their money," Dannhauser says, "and they deserve to use it as they see fit."

NPR and The Marshall Project reported last year on the common practice of taking the Social Security checks of foster youth. Child welfare agencies, in 49 states and the District of Columbia, take the benefit checks.

Some agencies, like in New York City, have staff, or even hire private companies, to figure out which kids to sign up for that revenue, then cash the checks, often without telling the child in foster care or their family.

Child welfare agencies justify the practice as a way to reimburse themselves for the food, shelter and other things that foster care provides. But other children in foster care are not expected to pay for this service–which is required by state and federal laws–with their own resources.

Children get Social Security checks because they are entitled to them, by law, because they or a parent are disabled or because a parent has died. It's estimated that 10 to 20 percent of children in foster care are eligible for these benefits.

Melanie Perez was 12 years old when she went into foster care. She left foster care once, when she was 18, to try to make it on her own. But returned when she was 19.

"For me, I don't have my parent. My Mom (is) deceased," she said. "When I left here at 18, I didn't have a penny in my bag."

Not having money, especially in a place as expensive as New York City, is one reason she returned to foster care, Perez said.

Now 21 and the mother of a one-year-old daughter, she knows that eventually she'll need to leave foster care for good. In New York City, she can stay with her daughter until she finds a stable place to live.

A few years ago, when Perez was first leaving foster care, she was told that, because of her various disabilities, Social Security had been sending her a monthly benefit check. It totaled several hundred dollars a month.

But the city foster care agency was cashing it.

"It's not OK for them to take something that is not theirs," said Perez.

"I want to use the money to take care of my child," she says of her benefits check. "So it will help me be independent. It will help me pay some of my college tuitions, hopefully."

Dannhauser says that's exactly why his agency is changing its policy. This summer, it will start putting those Social Security checks into savings accounts for the youth.

Dannhauser says the agency will teach youth in foster care how to save. The money then can be used, he says, to pay for an apartment, for college or technical school or for other things someone leaving foster care needs to succeed. "Those resources can mean the difference between a really rocky start to that transition or one that they really have a foundation to launch from," he said.

Because they deal with poverty, interrupted education and trauma, children in foster care face long odds when they leave care. They have elevated rates of unemployment, homelessness and time in jail or prison. By one estimate, only 3 to 4 percent will graduate from a four-year college.

After the NPR and Marshall Project stories last year, advocates for children–including Lawyers for Children, which represents Perez–tried to find out if New York City was among the places that took Social Security benefits from children in foster care. They discovered that ACS had employees who signed up youth for those checks – but that the agency was considering a change to that practice.

Dannhauser took over ACS in January, appointed by New York's new mayor, Eric Adams. The policy change on Social Security was announced by his predecessor, David Hansell, as he left office in late December. Hansell called setting aside those Social Security benefits "the right thing to do."

For a child who gets benefits because they've been orphaned, the Social Security "survivors benefits" that get set aside will add up to several thousand dollars a year.

For a child who is disabled or has a disabled parent, the plan is to put aside two thousand dollars. That's the federal "asset limit" for someone who receives those Social Security benefits, called Supplemental Security Income (SSI)

Unlike SSI benefits, there is no limit on how much a child can keep if they receive benefits because a parent has died.

Amy Harfeld, national policy director for the Children's Advocacy Institute, says there are ways New York could set up special accounts and save more than the two thousand dollars of SSI benefits. It takes time and staff and legal work, though.

Maryland is the one state that currently puts some of that Social Security money into savings accounts–starting when a foster youth is 14. It also sets up accounts so that more than $2,000 can be saved.

Still, Harfeld says New York City's move is ground-breaking and one that she hopes other state, county and city welfare agencies will follow. "What New York City is doing is courageous," she argues, "because they've basically said: We have been doing this thing that is unethical and that doesn't serve the kids that we are the legal parents of. And so even though we've become accustomed to taking this money, it's not the right thing to do. And we're going to stop doing it."

In Philadelphia, City Councilmember Helen Gym is expected to introduce legislation this month to stop the practice, after the Philadelphia Inquirer reported in December that the city took $5 million in benefits from children in foster care between 2016 to 2020.

Currently, there is legislation pending in Nebraska, Texas, Minnesota and Illinois to stop taking Social Security benefit checks from children in foster care.