by Thomas M. Lyden, Community Legal Aid Attorney
The poor and disabled—especially children—do not have it easy in our competitive society.
For children who are orphaned, abandoned, or otherwise removed from unsuitable conditions, public children services agencies often become their legal custodians. These children depend on government agencies for their survival. And the law requires those agencies to provide appropriate care for these children.
Funding for children services comes from a variety of sources, much of it from local communities via tax levies. But an overall scarcity of resources means agencies struggle to adequately provide for all the children in their care.
For children and adults in need, the Social Security Administration can also help. For instance, if a person suffers from a mental or physical disability (and otherwise qualifies under the rules), Social Security will provide them with Supplemental Security Income (SSI), a monthly cash benefit that is supposed to help meet the bare minimum needs of the disabled person. The maximum SSI benefit a person can qualify for in 2024 is $943 per month.
If the disabled person cannot manage their own SSI monies, for instance because they are a child, then Social Security will appoint a representative payee who will manage the monies on the disabled person’s behalf.
In appointing a payee, Social Security seeks someone who will serve the disabled person’s best interest. That could be a parent, guardian, relative, friend, or state agency.
For disabled children in the care of the state, there may be no other entity to act as payee besides the local children services agency. In those circumstances, how should the child’s benefits be used?
According to the Ohio Department of Children and Youth, there is no general state-wide rule about what county agencies are to do with the funds, and each agency can determine its own policy.
“When we are representative payee for a youth in the agency’s custody,” says one local children services agency director, “the funds come to our agency and we utilize them to cover the cost of their board and care. If the youth receives more in benefits than the cost of their board and care, our fiscal [officers] track those amounts and will open a savings account on behalf of the child. When the child terminates custody, the funds in the savings account are returned to the child.”
Considering the difficulties that local communities face in funding basic services, the idea that a child’s SSI benefits could offset the cost of their care seems reasonable. But whose money is it?
The state typically does not charge foster children for the cost of their own care. But, if a child in state custody receives disability benefits, then the local agency is allowed to keep that child’s benefit money. This practice essentially eases the burden on taxpayers at the expense of the disabled child.
Why is the funding for children services so low that agencies must collect reimbursement from disabled children? That’s a question for voters and policymakers.
State and local agencies could certainly use more money. But so could children in the system. Research from several midwestern states suggests that around 31 to 46 percent of youth exiting foster care experience homelessness by age 26. (American Journal of Public Health). For those exiting foster care in Ohio, the Bridges program can provide assistance with housing and other supportive services, if the person meets the eligibility requirements. But wouldn’t having access to their own benefit money be helpful as well?
To be clear, disabled people cannot get rich off their SSI. The program’s rules prohibit beneficiaries from amassing more than $2,000 in countable resources at any one time. Countable resources include things like cash or a bank account. If Social Security finds that a beneficiary accumulated more than $2,000 in countable resources, they will stop paying benefits and demand repayment of any benefits received while the person was ineligible. This is called an “overpayment”, and it is an issue that Community Legal Aid can help with. Nonetheless, there are ways for disabled children to work around this resource limit.
If a person was disabled before the age of 26, they can set up an ABLE account. “ABLE” stands for “Achieving a Better Life Experience.” An ABLE account is a tax-free savings account that allows disabled persons to accumulate resources (up to $100,000) and still maintain their SSI (and Medicaid) eligibility.
Instead of using SSI benefits to ease the burden on taxpayers, children services agencies could set up ABLE accounts for each disabled child and deposit the money there. A 10 year old disabled child who receives the maximum SSI benefits could accumulate nearly $100,000 in an ABLE account by the time they turn 18. For a disabled child under the care of a children services agency, that money would provide life-changing support for them as they transition out of foster care and into adulthood.
After all, whose money is it?