ACS took $18.8M from kids in foster care, legal aid society seeks justice

May 14, 2024 Robert Abruzzese, Courthouse Editor

Brooklyn Family Court, where critical discussions about the welfare of the city's most vulnerable children are addressed. Brooklyn Eagle photo by Robert Abruzzese

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The Legal Aid Society submitted testimony to the City Council Committee on Children and Youth on Thursday, accusing the New York City Administration for Children’s Services (ACS) of improperly diverting financial benefits intended for disabled and orphaned foster children.

From 2011 to 2022, ACS is reported to have withheld $18.8 million in Social Security Survivors Benefits, which were meant for children who lost their parents. These funds were instead used to cover various foster care-related expenses, according to Legal Aid.

“These benefits are meant for our clients, some of our city’s most vulnerable children, not for ACS to cover the costs of foster care,” said Dawne Mitchell, chief attorney of the Juvenile Rights Practice at The Legal Aid Society. “Other jurisdictions, including Arizona and Massachusetts, have established ways to ensure that children in foster care have the benefits to which they are entitled, and if the administration refuses to right this wrong, then we urge the City Council to advance a legislative remedy.”

Last month, Legal Aid and Lawyers For Children criticized a new ACS policy for not adequately safeguarding the Social Security Disability Benefits of disabled foster children, predominantly from poor Black and Latinx communities. They urged ACS to revise the policy to retroactively compensate foster youth for previously withheld Survivors Benefits. Legal Aid also formally commented on this policy. In 2022, ACS Commissioner Jess Dannhauser admitted that the funds belong to the foster children and should be used according to their needs.

“This is their [benefits-eligible children in foster care] money, and they deserve to use it as they see fit,” Dannhauser admitted in 2022.

Survivors Benefits, a federal insurance program funded by wage earners, is intended to support children if a parent dies. Legal Aid claims that, for more than a decade, the ACS mismanaged these funds by automatically assigning itself as the representative payee for children who entered foster care and were eligible for these benefits, thereby keeping the money. This practice also extended to children who lost their parents while in foster care.

Although ACS reformed this practice in 2022, the new policy lacks a mechanism for children to reclaim the funds previously taken or to access their benefits for current needs while in foster care. ACS is now urged to establish a system that enables these children to obtain their rightful funds to secure their economic stability, as originally intended by the Survivors Benefits program.

The draft policy from the Administration for Children’s Services (ACS) proposes suspending or not applying for Supplemental Security Income (SSI) benefits for many disabled children in foster care, even when their disabilities are known. ACS plans to act as the representative payee for some children, using their SSI benefits for general foster care costs rather than preserving the funds for the individual needs of each child.

Despite the existence of specialized savings accounts designed to protect SSI benefits and help disabled individuals manage their disability-related expenses and financial independence, ACS’s policy limits foster children to a $2,000 savings cap upon discharge from care without informing them of the possibility to legally save up to $102,000 in these accounts.

ACS cites federal regulations as the reason for this cap, although other jurisdictions like Arizona and Washington D.C. successfully use these specialized accounts to ensure disabled foster children can access their entitled benefits.

Legal Aid has made the following recommendations for ACS to ensure its policies are equitable, non-racist and supportive of children in foster care. ACS should cease the use of disability benefits intended for children to finance foster care operations and instead utilize specialized accounts to save these funds for the children.

The agency is also urged to conduct early screening and apply for benefits for all potentially eligible children, including those eligible for other federal benefits. It’s important that family members and kin, often prioritized by the Social Security Administration, be allowed and encouraged to act as representative payees when appropriate.

Legal Aid wants children to be enabled to use their benefits to meet immediate needs not covered by foster care. Older youth in foster care should be supported and encouraged to manage their benefits as their own representative payees.

ACS must also provide comprehensive financial education and counseling to children and families on how to effectively manage and preserve their benefits, including the use of special savings accounts that allow savings beyond the federal assets cap.