PR 07225.007 Colorado

A. PR 02-006 Use of SSI Past-Due Benefits - Foster Care

DATE: January 8, 2002


Under Colorado law the cost of foster care is considered a legal debt owed by the child's parents. A foster care agency acting as representative payee for an SSI recipient with a dedicated account may recover past expenses from dedicated account funds if those expenses are related to the child's impairment.


You have requested our opinion as to whether foster care is a legal debt and whether states (or their political subdivisions) may use SSI past-due benefits to reimburse themselves for "care and maintenance" costs of foster care. For the reasons discussed below, if an SSI recipient's past-due benefits are in a "dedicated account," those funds may not be used for basic maintenance costs.

a. Factual Background

In a letter dated June 27, 2001, Ms. Paula H~ of the Larimer County (Colorado) Department of Human Services, Children, Youth & Family Division (the agency), requested from SSA a formal exception to SSA's dedicated accounts policy to allow the agency to reimburse itself for past expenditures for foster care. Ms. H~ noted the agency routinely applies for SSI benefits on behalf of children in its care, and you have informed us that the agency serves as representative payee in this case. Ms. H~ noted that recently the agency had received medical approvals for applications submitted more than six months previously, and that the SSI past-due benefits therefore were subject to SSI dedicated account provisions.

Ms. H~ argued that although the agency's expenditures may primarily be attributed to a category not permitted (food, shelter, clothing, and personal items), they serve a larger purpose in improving and treating the child's condition. Ms. H~ noted that the agency's payments to facilities/foster homes may include not only basic maintenance costs, but also costs for difficulty of care assessment, administrative/staff maintenance, and treatment services. Ms. H~ also pointed out the responsibility for the delayed approval of SSI benefits was with the Colorado Disability Determination Services (DDS) and not the agency.

b. Analysis

Under section 1631(a)(2)(F) of the Act, 42 U.S.C. § 1383(a)(2)(F), if a child under the age of 18 is awarded more than six months' worth of SSI past-due benefits, the child's representative payee is required to establish a "dedicated account" into which those past-due benefits must be deposited. The law also restricts the items and services that the payee is permitted to purchase with funds from the dedicated account. See id. The funds may be used only for medical treatment, education or job training, or for other expenses, provided they are related to the child's impairment. See id.; see also 20 C.F.R. §§ 416.546, 416.640(e) (2001); POMS GN 00602.140.

Under 20 C.F.R. § 416.640(d), a payee may satisfy a beneficiary's debt arising prior to the first month for which payments are certified to the payee if the beneficiary's current and reasonably foreseeable needs are met. See also POMS GN 00602.030A. POMS GN 00602.140C.2.b. provides that funds in a dedicated account may be used for repayment of past debt, including self-reimbursement by a creditor payee, for those items or services that were related to the child's impairment and benefitted the child. SSA approval is required when a payee is also the creditor. See POMS GN 00602.030B.

As an initial question, you have asked whether a child's past foster care costs are considered a legal debt that may be repaid from funds in a dedicated account. In Colorado, parents have a duty to provide reasonable support for their children and are obligated to contribute to the cost of their child's residential placement. See Colo. Rev. Stat. § 19-1-115(4)(d); People ex rel. N.D.S., 5 P.3d 382, 384 (Colo. App. 2000). "Foster care fees are considered child support obligations, and under both statute and rules adopted by the State Department of Social Services (now Department of Human Services), the amount of the fee for which the parents are obligated is based upon application of the child support guidelines." People ex rel. S.M.S., 907 P.2d 739, 740 (Colo. App. 1995). Thus, the costs of foster care are considered a legal debt owed by a child's parents. The question arises as to whether a debt of the child's parents is also a debt of the child SSI beneficiary. However, we need not decide that question in a strict legal sense. Under SSA policy, a foster care agency that acts as representative payee for an SSI recipient may recover past expenses from dedicated account funds if those expenses are related to the child's impairment. See POMS GN 00602.140D. It is the agency payee's responsibility to explain why or how an item or service (other than medical treatment; and education or job skills training) relates to the child's impairment. See POMS GN 00602.140C.2. So, the agency (that is the subject of this opinion) may be reimbursed for a child's past foster care costs that are related to the child's impairment.

Finally, as noted above, you have asked whether dedicated account funds may be used for "care and maintenance," as Ms. H~ has requested. Under SSA policy, basic maintenance costs (food, shelter, clothing, and personal items) not related to the child's impairment may not be paid with dedicated account funds. See POMS GN 00602.140B.4. If "care and maintenance" is the equivalent of "basic maintenance," then dedicated account funds generally may not be used for "care and maintenance" costs under SSA's policy. The GC has previously stated:

Although it would not in our view be the most legally supportable interpretation, we do not believe SSA is legally precluded from going further and adopting a policy under which expenditures for basic needs such as food, shelter, and utilities would, as a general rule, be considered related to the child's impairment and an allowable dedicated account expenditure.

Memorandum, Expenditures of Dedicated Account Funds for Basic Living Expenses, OGC (Fried) to Office of Program Benefits (O'Connell), SSA, July 8, 1997 (copy attached). However, SSA's longstanding policy is that dedicated funds may not be used to reimburse care and maintenance expenses. See Note to file, Dedicated Accounts and Expenditures for Residential Facilities, OGC (Yudin), June 9, 2000 (copy attached). Therefore, in the absence of any regulatory change, that is the policy to be followed in this situation.

Deana R. E~
Regional Chief Counsel, Region VIII

By Thomas H. K~
Assistant Regional Counsel

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PR 07225.007 - Colorado - 02/06/2004
Batch run: 04/25/2016