Years after promised reforms, advocates complain the city still unfairly keeps the cash to “offset” the cost of foster care.
When Julian reentered the foster care system at 16 years old, he was blind in both eyes. He needed a special “smart” cane with a motion sensor and GPS, resources to travel on accessible public transit and a mobility instructor to help him learn how to safely cross the street.
But in an interview this month with his attorney, he said his appeals to caregivers, group home staff and social workers seemed to go unheard.
“It took going to court for a year or so back and forth just to get them to pay for the cane that I needed,” Julian said, speaking to The Imprint on the condition that his last name not be used.
He is now 20, and living primarily on food stamps and cash assistance. But over the four years he spent in foster care, he and his attorney believe he had received as much as $45,000 in federal disability benefits that he had no knowledge of or direct access to. Instead, he and his attorney say, the child welfare agency kept the funds to fund pay for its services — a common practice nationwide that is now under increasing scrutiny.
“It’s just frustrating to see that time wasted,” Julian said. “I could have had a lot more resources.”
Children whose parents have died or who have a mental or physical disability are eligible for monthly payments from the Social Security Administration. Disability benefits average upwards of $600 per month, while survivors’ benefits are substantially higher. Child welfare agencies such as New York City’s Administration for Children’s Services (ACS) typically screen all foster youth for eligibility.
But when the money is received from the federal government — rather than being saved and invested, or made available to the children for the extra care and comfort they may need while growing up in the system or as adults — the funds are often squirreled away by local governments to pay for foster children’s care and custody. The practice was publicly exposed in 2021 by a National Public Radio and Marshall Project investigation.
New York City began revising its policies shortly thereafter. In changes approved by Commissioner Jess Dannhauser, the agency began placing some federal benefits in savings accounts that foster youth could access after they leave the system. The revisions, which closed for public comment this month, also include ways the agency would “maximize allowable savings” from a foster child’s social security benefits.
But the recently proposed policy changes have met strong resistance from children’s lawyers and child welfare experts, who point to several central concerns. In public comments obtained by The Imprint, some called parts of the draft policy “shameful” and “disingenuous.”
Among the concerns: Although the city agency proposes to preserve for kids the benefits foster youth receive when their parent dies, the benefits of certain disabled foster youth would continue to be folded into the city’s overall budget for foster care. The policy also states the agency would automatically apply to become the “representative payee” for the child, and limit total payments to disabled youth to $2,000, using any funds received thereafter to “offset the cost of foster care.”
Critics want the city to commit to placing the money in federally approved specialized savings accounts, which bypasses the federal cap of $2,000 and allows children to legally save up to $102,000.
“They are acting very disingenuously and are harming the children whose funds they’re taking.”
— University of Baltimore law professor Daniel Hatcher
“To ACS, this is a revenue stream. But to each individual child, this is the difference between being able to get a wheelchair in the future and dealing with housing instability or not being able to afford and support their children through childcare,” said attorney Anna Blondell, who works for Legal Aid and is part of Julian’s legal team. “It shouldn’t be on the backs of disabled and orphan children.”
A national expert also weighed in.
“This policy doesn’t accomplish what they promised they would do,” said Daniel Hatcher, a University of Baltimore law professor who has tracked the issue nationally. “They are acting very disingenuously and are harming the children whose funds they’re taking.”
Certain children who receive their own disability payments become ineligible for federal Title IV-E funds that help pay for foster care. The child welfare agency argues it must draw on these payments, or risk losing funding that they estimate to be $10 million annually. Per the draft policy, those children’s disability benefits would be suspended, so that the agency can collect and keep the Title IV-E benefits instead.
In an emailed statement to The Imprint, agency spokesperson Marisa Kaufman said the agency is still reviewing the comments and may update the draft policy before it’s finalized. She also pointed to previous policy changes that set New York City apart from other local governments when it comes to federal survivor benefits, or SSI.
“ACS is one of the only jurisdictions in the country — and the only one in New York State — conserving these benefits for children in foster care,” Kaufman said. “Because of New York City’s commitment to children and youth, we now conserve money for young people eligible for SSI to receive it when they leave foster care.”
National outcry
Controversy surrounding this issue extends well beyond New York City.
Even Martin O’Malley, the commissioner of the federal Social Services Agency (SSA) has expressed concerns.
“We should do what we must so that when that kid ages out of foster care, having had benefits, that they’re not just given a pat on the back and their clothes in a plastic bag when they turn 18,” Malley said at a Senate Finance Committee hearing in March.
A new 143-page analysis by the Children’s Advocacy Institute in California, located at the University of San Diego, ranked states by their performance on preserving social security benefits for foster youth who are the children of veterans, survivors of deceased parents and the disabled.
“ACS is one of the only jurisdictions in the country — and the only one in New York State — conserving these benefits for children in foster care.”
— Administration for Children’s Services spokesperson Marisa Kaufman
Among the considerations for the ranking system were transparency on how the funds were spent, whether parents were notified about a child’s finances, and whether states have pursued legislation to improve the preservation of foster children’s benefits. Only two states received A grades: Arizona and the District of Columbia, which have enacted “clear, unambiguous” policies to prevent child welfare agencies from using a child’s federal benefits for their own expenses.
Despite New York City’s more forgiving policy when it comes to foster youth with deceased parents, New York State as a whole received an F grade from the institute, along with 13 other states.
“Our foster care agencies and SSA are violating their legal and moral duty to do right by these most vulnerable children and center the child’s best interests at all times,” Amy Harfeld, the institute’s national policy director, said in a press release. “These funds amount to nothing but a rounding error for most state budgets, but would be life-changing for impacted youth.”
The New York State Office of Children and Family Services did not respond to The Imprint’s repeated requests for comment.
But former foster youth Melanie Perez, a 23-year-old from Yonkers, was quick to express her outrage at children forcibly separated from their families having to subsidize their own care.
“They didn’t ask to be here,” said Perez, who entered the system at age 12 and said she was owed past disability benefits that were taken from her for more than six years. She is now working with a lawyer to recoup the funds, but meeting resistance.
Learning of the payments she could have received was all the more agonizing in light of her path since leaving foster care: At age 19, she became homeless and later couldn’t afford basic necessities for her new baby.
“I couldn’t take care of myself. I couldn’t feed myself. I couldn’t put clothes on myself, buy medication, toiletries or hygiene products,” she said. “It’s not fair that they keep taking our income.”
Survivors’ benefits
Children who age out of foster care typically face dire circumstances, including poverty, homelessness and unemployment. Benefits accrued while they grew up in foster care have the potential to change lives, former foster youth interviewed for this story said — nest eggs amounting to tens of thousands of dollars in savings for their futures.
Foster youth who spoke to The Imprint stated the importance of having control over their money, or having a trusted adult they are close to be named as a payee — rather than the child welfare agency that has not earned their trust. That aligns with federal regulations that recommend close kin or biological and foster parents be named as a child’s representative payee.
Impacted youth also stressed the importance of accessing a portion of the funds while they are still in foster care if needed — money that could be a lifeline for those like Julian who are placed in neglectful foster homes.
An April 22 NBC report detailed how much the New York City agency has come to rely on such payments. From 2011 to 2022, the Administration for Children’s Services diverted almost $19 million from children whose parents had died to “offset” the cost of their foster care, the outlet reported. Although the policy has since been revised, there are currently no plans to reimburse foster youth who had survivors’ benefits taken by the agency prior to 2022.
“I couldn’t feed myself. I couldn’t put clothes on myself, buy medication, toiletries or hygiene products. It’s not fair that they keep taking our income.”
— former foster youth Melanie Perez
The Imprint spoke with Alyssa Snow, an adoptive mother from the Bronx whose 15-year-old daughter was awarded monthly social security payments after her birth mother died. Snow said she was unaware of the payments at the time, and that the city agency collected the girl’s benefits as a “designated payee” without her consent for three years — including after her daughter left foster care.
“They developed this brilliant yet criminal policy of taking these benefits to subsidize foster care,” Snow said. “I was just blown away.”
She knows they’re among the lucky ones — Snow had the knowledge and ability to advocate for her daughter, and the city agency promised to return the money they kept collecting after her child was discharged. But they have refused to return her survivor’s benefits that she is owed from 2020-2022, which Snow said amounts to roughly $21,000.
That money, she said, is part of her daughter’s legacy, and if added to an interest-earning account she has already set up, could help with graduate school, a deposit on a house, or a trip to China to learn about her roots.
“It’s stealing from them,” she said. “And for them to create protocols and systems going forward and to not acknowledge this, it’s immoral.”
Amid the growing attention, Blondell, Julian’s attorney, hopes New York City will listen to youth and their advocates, and revise the draft policy so that disabled foster youth can keep their benefits.
“We are really hopeful because it is so important for that population,” she said. “To be economically stable, to break intergenerational cycles of poverty, to be able to use the federal benefits as they were intended.”
