Should foster kids know when the state uses their benefits?

The Nesbett Courthouse in downtown Anchorage.

Some foster kids are eligible to receive Social Security benefits, but the kids and their families don’t always know the money is available. Instead, the state applies for the benefits and puts the funds toward paying for foster care services. Now a lawsuit is asking if the state needs to notify families and guardians before it starts taking the money.

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About 160 foster kids in Alaska are entitled to social security benefits because they have a disability or one of their parents have died. But most of the time, the money doesn’t go to the individual child, it goes straight to the state.

“What smells bad about this is the state seems to be trying to gain federal money that it isn’t necessarily entitled to,” Superior Court Judge William Morse said while listening to oral arguments in the case in late February.

“It seems like you are trying to take money from a child,” Morse told the attorney for the state.

The US Supreme Court ruled that it is legal for state agencies to receive federal benefits on behalf of foster children and use the money to pay for the kids’ care while they are in custody. The question is – can they legally do it in Alaska without providing any notice?

If a child’s guardian ad litem or attorney knew the child could get between $700 and $2,000 per month in federal benefits, they could try to find a relative or another person to be a private payee. Then, the money wouldn’t go toward the care the child is already entitled to from the state.

“You could be use these social security monies for tutoring, for therapy,” Attorney Jim Davis argued before the judge. “To do the things in life that your kids probably do and my kids probably do – go to the state fair, go to Alyeska, have an iPhone.”

Davis is representing foster children who are eligible for benefits. In some cases, the money could be set aside in a trust to be used for education or medical needs when the child ages out of foster care.

Assistant attorney general Leah Farzin argued the state is not required to notify anyone about the potential benefits and providing notice would be a burden.

“We’re opposed because there’s no obligation to do so,” Farzin told the judge. “The state is not doing anything wrong. And therefore, the state being ordered to do something to correct a problem that doesn’t exist is unfair.”

“To who?” Morse asked.

“To the state,” Farzin replied.

“It’s unfair to you to have to add a paragraph to the GAL (guardian ad litem) appointment order?”

Judge Morse said notifying people would not be a burden on the state, and could speed up the application process for the benefits by reducing the amount of research the Social Security Administration needs to do before designating a payee. That would get money to the kids faster.

The state contracts with a private company for about $10,000 per year to apply for benefits on behalf of the children.

Farzin also argued that using a child’s federal benefits to pay for their time in foster care frees up more state resources for all of the children who are in custody.

“When the state is the payee, all foster children get more resources,” Farzin said.

But Judge Morse questioned if this is fair to the child who is entitled to the money.

“The child loses money if the state is the payee when there could have been a private payee,” Morse said.

According to the Office of Children’s Services, if the state spends less on a child’s monthly care than it receives in benefits, it returns the extra money to the Social Security Administration. The SSA holds the money until a new payee is assigned to the child.

The judge has up to six months to issue a ruling.