Social Security Benefits to Change for People in One State Under New Bill

The Missouri Senate on Friday passed a bill to end the state’s practice of seizing Social Security benefits from foster children, a move aimed at ensuring the funds serve the children’s future needs rather than offsetting the state’s foster care costs.

Over the last five years, Missouri has withheld roughly $28.2 million from Social Security benefits—funds earmarked for children with disabilities or those orphaned—according to data cited by the Missouri Independent, to refund the state for expenses incurred by its agency.

Sponsored by Republican state Representative Hannah Kelly and state Senator Holly Thompson Rehder, the bill aims to realign the funds toward addressing the “unmet needs” of vulnerable youths, such as housing and preparation for their transition out of foster care.

“That is not taxpayer money coming in,” Kelly said in a House debate prior to the bill’s passage. “That is literally money that is taken in the form of [survivors’ benefits] payments that children are owed because they have lost their parents.”

Newsweek reached out to Kelly and Thompson Rehder by email for comment on Friday afternoon.

The legislation, which passed 29-1, is expected to take effect on August 28. According to the bill’s text, the law specifically prohibits the Children’s Division from utilizing a child’s Social Security, or Veterans Administration (VA) benefits for routine foster care costs. Instead, it allows the funds to be used for the child’s additional needs not covered by the state, such as educational expenses, housing or transition support to adulthood.

Additionally, the bill requires the Children’s Division to identify eligible children for the benefits within 60 days of entering state custody and to apply on their behalf, ensuring that benefits are secured as quickly as possible.

It also mandates that the accounts holding the child’s benefits comply with federal and state asset and resource limits, which will protect the child’s eligibility for other forms of aid.

The legislative action addresses years of concerns regarding the state’s practice of withholding millions of dollars from foster children. The Missouri Independent said other states, including Arizona, New Mexico and Oregon, have passed similar legislation over the last year.

According to a Congressional Research Service report issued in November of 2021, roughly 27,000, or 5 percent of all foster youth in the U.S., qualify for Social Security benefits due to a disability or death of a parent. The Missouri Independent estimated that about 1,200 children in the state were eligible.

In fiscal year 2018, 38 states along with the District of Columbia used roughly $179 million in benefits designated for children in foster care to cover the costs of their care. The practice ignited a debate among child advocates, policymakers and child welfare professionals.

Critics, according to the report, argue that funneling the benefits to reimburse foster care expenses deprives the children in foster care of resources intended for their benefit. They say the approach burdens the children with the cost of their own care and prevents them from saving for future needs like education or housing.

Conversely, proponents maintain that the funds are being used responsibly to provide immediate necessities, including food and shelter, akin to parental support. They warn that without the ability to use the benefits, child welfare agencies might reduce efforts to identify eligible children, potentially causing them to miss out on financial support that could continue into adulthood.

Still, according to Kelly, Missouri’s legislation takes concrete steps to protect and prioritize the financial security of foster children. She said in a late January hearing that legislators in the state have a responsibility to safeguard the funds for the children’s future.