March 21, 2024

ICYMI: At Hearing, Warren Raises Concerns About States Seizing Foster Youth Social Security Benefits

Social Security Commissioner Martin O’Malley Shares Concerns and Commits to Examining these Seizures  

Warren: “Dozens of states are now secretly screening the kids in their care to see if they would be eligible for Social Security benefits, sometimes even hiring data mining companies to try to identify targets, and then funneling those Social Security benefits into state coffers to pay for anything from paper clips to prisons.”

Video of Hearing (YouTube)

Washington, D.C.  – At a hearing of the Senate Finance Committee, U.S. Senator Elizabeth Warren (D-Mass.) raised the alarm about state governments seizing the Social Security benefits of foster youth, often with the help of predatory private contractors. Senator Warren called on Commissioner of the Social Security Administration, Martin O’Malley, to use his authority to ban states from taking away foster children’s earned benefits. 

During the hearing, Senator Warren noted that some children in the foster system have disabilities that make them eligible for Supplemental Security Income, while others have lost a parent who worked and paid into Social Security, making them eligible for survivors’ benefits. The law requires Social Security survivors’ benefits to be used for the children's best interest for unmet needs; yet in 2018, states took at least $179 million from foster youth, funneling much of this money into general state coffers to pay for unrelated priorities. 

In response to Senator Warren’s questioning, Commissioner O’Malley agreed that orphaned children deserve and often desperately need the Social security benefits their parents earned, and he committed to continuing to look into these issues and addressing the concerns that Senator Warren raised. 

Hearing: The President’s Fiscal Year 2025 Social Security Administration Budget
U.S. Senate Committee on Finance 
Wednesday, March 20, 2024 

Senator Elizabeth Warren: So when American workers pay for Social Security, I think they deserve to know that they're going to get the benefits that they earned. And that is why President Biden and Democrats in Congress are fighting to protect and to enhance Social Security, funded by making the wealthy pay their fair share. 

But today, I want to focus on an issue that doesn't get much attention. And that is state governments seizing Social Security benefits for foster youth, often with the help of predatory private contractors. 

Now, some people might say, wait a minute, you're talking about children getting Social Security? Well, we have to remind people that half a million children are in the foster system, and some of these are children with disabilities who need extra care, which makes them eligible for supplemental security income, and many foster children have lost a parent who had worked and paid into Social Security, which would make these kids eligible for survivor’s benefits. 

Commissioner O'Malley, you've worked in government your whole life fighting for working families, and now you head up the Social Security Administration. Do you agree that when a parent dies, a child deserves and often desperately needs the Social Security benefits that their parent earned? 

Martin O’Malley, Commissioner, Social Security Administration: Absolutely. 

Senator Warren: Yeah. So the law says that Social Security survivor's benefits must be used in the child's best interest for unmet needs. And yet, if that child ends up in foster care, their benefits may be seized by state agencies that are responsible for taking care of them. 

States, with a little help from the federal government, fund the foster care system, but dozens of states are now secretly screening the kids in their care to see if they would be eligible for Social Security benefits, sometimes even hiring data mining companies to try to identify targets, and then funneling those Social Security benefits into state coffers to pay for anything from paper clips to prisons. In 2018, alone, states took at least $179 million dollars from foster kids, and in many cases, these children didn't even know that they were entitled to the money. 

Commissioner O'Malley, when I heard about this, I nearly fell out of my chair. Funneling a foster child's benefits into state coffers and not directing an additional cent toward improving that child's life, does that sound like it is meeting the legal requirement that those benefits be used in that child's best interests?

Commissioner O’Malley: It certainly doesn't sound like the sort of policy outcome that any of us would like for kids in foster care, regardless of whether or not the law says legally they can.

Senator Warren: All right. Well, I’ve got even a question about whether or not the law says they can. The law is very clear that those Social Security benefits are to be used for that child. You know, and these kids are not rich. Quite the opposite. A few hundred bucks a month could make a huge difference in the life of one of these children. It could pay for trauma counseling, specialized tutoring, save for college, save up money for a down payment on an apartment because they're going to get dropped from the system when they turn 18 and have nothing. 

So here's the good news, Commissioner O'Malley. SSA has the power to ban states from stripping away foster kids' earned benefits. So let me ask you, what are your plans to ensure that foster children’s Social Security benefits are used for their own needs, rather than siphoned off by agencies and for-profit data mining companies?

Commissioner O’Malley: We're taking another look at this policy. We, there are some 17 states, led by Maryland, that have either passed laws or are considering laws that would require a certain amount of those benefits be conserved for the child. 

There's probably a lot of states who would tell you that if a child is in foster care, they’d pay more than what the benefits are that that child is receiving, so they would argue with their lawyers, that they are using it for care and maintenance, as indeed, a grandmother or another family member might for care and maintenance. 

But when we all know what terrible outcomes kids aging out of foster care have, and we know that at least for this portion of them who receive benefits, there's a better way. We should do what we must so that when that kid ages out of foster care, having had benefits, that they're not just given a pat on the back and their clothes in a plastic bag when they turn 18. 

Senator Warren: I appreciate your attitude on this, you know, seizing the benefits that go to some of our most vulnerable children just to finance other parts of state government just isn't right. And I hope you will pick up all of the tools available to you at the federal level to make sure that those kids get what their parents were promised back when their parents paid into the Social Security system.

Commissioner O’Malley: And I will, I'm looking forward to continuing to work with you. We’re unpacking some of this and you know, 34 of the states claim that they do conserve a portion of it, but we're about to find out exactly how true that is in the research that we do. 

Senator Warren: And remember, you’ve got the federal power. 

Commissioner O’Malley: Yes.