Maryland's practice of shoring up its foster care budget by appropriating the Social Security survivor benefits of the children in its care is questionable and merits close scrutiny by legislators. Maryland is hardly alone in taking this step, and prohibiting it would present financial and logistical hurdles. But there is a strong case to be made that it is unfair to the children the state is supposed to be caring for.
The state has an obligation to care for children who are abused or neglected, and the children are not expected to pay the state back. Maryland regulations do allow the Department of Human Resources to seize a child's assets, such as property or a life insurance policy, but it does not do so. An exception is the Social Security survivor benefit, which is paid to minor children when a breadwinning parent dies. The state has been applying for those benefits in the names of foster children whose parent or parents have died — collecting on average about $2.5 million a year, which goes into the agency's overall foster care budget, not to the specific benefit of the children in question. The state has also hired a consultant to help it maximize this "revenue," with an expectation that it could boost its take to as much as $9.2 million a year.
Advocates have long questioned this practice, and now state Sen. Jamie Raskin and Del. Kathleen M. Dumais, both Montgomery County Democrats, are sponsoring legislation that would prohibit the state from using any of a child's assets — Social Security or otherwise — as reimbursement for the cost of his or her care. Instead, it calls for the money to be used to pay for specialized services not otherwise provided by DHR or establishing an account for the child so that he or she may receive the funds upon leaving foster care. The bill also codifies a requirement made in a recent Court of Appeals decision that the state notify a child through his or her attorney of any applications for federal benefits and of the results of those applications.
DHR opposes the legislation, and its concerns are not trivial. If the state did not collect these funds, the overall budget for foster care would be reduced. Either the state would have to kick in more general funds (not an easy thing to accomplish at a time of budgetary stress) or the level of support for all foster children would be reduced. And setting up the necessary trusts or accounts to pay for specialized services would be logistically difficult and costly in its own right — state legislative analysts estimate that merely screening and reviewing children for eligibility would cost in excess of a half-million dollars per year. Fundamentally, DHR Secretary Ted Dallas has argued, the agency's practices are fair and reasonable because all of the money goes toward caring for the children, just as it would if they were being cared for by a surviving parent or other relative.
Where that argument falls down, though, is that the care DHR provides through the foster system is a universal benefit that all children are entitled to by right. Social Security survivor payments are an individual, earned benefit. Generally speaking, children are only eligible for them if their parents have a sufficient work history, and the amount of the benefit varies depending on how much the parents earned. The Social Security Administration's publications refer to survivor benefits as being akin to life insurance and note that "When a parent becomes disabled or dies, Social Security benefits help stabilize the family's financial future." Even though the Supreme Court has upheld the legality of using survivors' benefits to shore up a state's foster care budget, the practice fails to live up to Social Security's promise because the children whose parents earned that benefit are in no way better off than those whose parents didn't.
We sympathize with DHR's position. From their perspective, this legislation amounts to a requirement that the state diminish its ability to care for the majority of the children in the system in order to benefit a relative few. But state officials also need to recognize that there is also something unfair about what they are doing. They are appropriating the resources of a few — in most cases, the only legacy their parents have left for them — for a purpose that does not directly benefit them. That may be legal, but it isn't right.
Finding a balance between the competing interests at stake in this issue is likely not something the General Assembly can accomplish in the days left in this legislative session. The matter should be studied to determine the fairest, least burdensome way to transition to a system that preserves the assets of these children. But a the very least, this debate should convince DHR to shelve the idea of expanding this practice, lest it turn a $2.5 million problem into a $9.2 million one.
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