Unlike many states, New Hampshire keeps about $1 million annually in Social Security benefits meant for children in foster care. While the practice is legal, it’s not in kids’ best interest, according to a new report requested by state lawmakers.
The report recommended the state instead give the money to children when they leave foster care, to reduce the likelihood they will struggle to afford housing and food. Studies show foster children have a higher risk of facing those kinds of challenges than peers who have not been in foster care.
Marie Noonan, director of the state Division for Youth, Children, and Families, said the report provides the agency useful guidance on rethinking its long-standing practices.
“We’re open to looking at doing things differently,” Noonan said. “Of course we want to have those we serve to have all the benefits and resources they need to live successfully.”
Making the report’s recommended changes, which go beyond returning children’s Social Security payments, could cost the state as much as $6 million over the next two years. That includes $2 million in lost Social Security benefits and about $4 million in staff and operations costs, according to the report.
The cost would be less if the state opts to keep 50% of Social Security benefits, rather than giving all the money to foster children.
Either option could be a hard sell as lawmakers begin the task of writing the next two-year state budget without millions in revenue from the interest and dividends tax, which was fully eliminated this month, and federal pandemic aid, which has largely ended. Noonan is hopeful lawmakers, most of whom voted for legislation last year calling for the report, will be supportive.
The state collects Social Security benefits for about 300 foster children and uses the money to help cover the cost of their care. Noonan said that could include medical needs not covered by insurance, out-of-home placements, and even “comfort items.”
In one case, the Social Security Administration allowed a case worker to buy a child an Xbox gaming device as a comfort item, Noonan said. The state also sets aside benefits for older children who are aging out of foster care to help with rent or other essential needs.
But the state can set aside up to $2,000 under the federal guidelines it follows. Noonan said it has been able to get waivers and save more in some cases. Benefits that are not spent on needs or savings are returned to the federal government, the report said.
The consultant who authored the report recommended New Hampshire join 46 other states and move to a program that allows some individuals to save more than that. Noonan said the report “opened our eyes” to opportunities it was unaware of, including that savings program which was put in place in 2014.
“I know it may appear that we are taking the money from children and I think I understand why it appears that way,” Noonan said. “I want to be sure to highlight that the case workers and the finance team really (look for) opportunities to allow the money to go back to the youth.”
The consultation also recommended the state hold Social Security benefits in savings accounts that pay interest, something it is not doing now. A better screening process would ensure more kids who are eligible for Social Security benefits receive them, it said.
The state is currently identifying about 4% of New Hampshire children in out-of-home placements as eligible, well below the 12% national average, the report said. Noonan said the agency does an eligibility check for every child who is placed outside their home.
“We need to digest (the report) a bit more, but it’s interesting to see how different we are from the rest of the nation,” Noonan said. “We need to think about all the opportunities here.”
The consultant said the state is doing some things well.
It ensures case workers have ready access to the Social Security benefits to cover expenses that go beyond the typical cost of care that’s already covered. Older children have access to some guidance around financial literacy and life skills programs. When a child is eligible for multiple benefits, it chooses the one that more directly benefits the child.
Rep. Mary Jane Wallner, a Concord Democrat, filed the legislation last session that required the state health department to examine its current practices and assess the cost of improving services to foster children. Wallner and a bi-partisan group of House lawmakers have filed draft legislation to potentially pursue some of the recommendations this session.
The bill is still being drafted, in part because the report was not completed until late last month.
Wallner said she is worried about the implications of what’s expected to be a tight budget. She opposes giving kids in foster care only half of their benefits, which would lessen the state’s losses. And she was surprised the state has not been saving benefits in accounts that pay interest.
Wallner said she hopes the possibility of offsetting some losses by capturing more in federal benefits will persuade lawmakers to adopt the recommendations.
“The report really did lay out a road map of how the state could go forward and provided the state with some options,” she said.
