The Poverty Industry, Part Three: Stripping the Assets of Foster Children

September 30, 2016 by Robert Franklin, Esq, Member, National Board of Directors, National Parents Organization

I hope I haven’t left readers with the impression that the only value foster kids have to states are their disability and survivors’ benefits under the Social Security Act. If so, allow me to disabuse you of the notion. In fact, foster children can, in Daniel Hatcher’s timeless iteration, be “mined” for more money than just from those sources.

Title IV-E also encourages states to take children into foster care in the first place. Of course, I’ve written a lot about that practice and cited state legislators who admitted that, when the Adoption and Safe Families Act went into effect in 1997, states jumped to take into foster care as many kids as possible. And, since more money flowed to the states for special needs children, some states, like North Dakota, began designating far more kids than before in just that way. Washington then provides extra financial incentives to adopt those kids whose parents’ rights have been terminated.

Veteran’s benefits? Those too are available to states if a foster kid had a parent who died serving in the armed services. As with the other benefits mentioned, the state (or its private contractor) will determine whether the child is eligible for benefits and, if so, will apply for, receive and dispose of those benefits for its own interests, all without telling the child.

If the child is eligible for Medicaid or school-based Medicaid services, the state can receive and channel those funds to its own use instead of for the use of the child for whom they were intended.

Since a child’s disability is a sure source of revenue for states, one way to up the rate of disability among foster kids is to medicate them. The existence of a “need” for, for example, powerful psychotropic drugs, gives states a good argument to the Social Security Administration that children receiving those medications are “disabled.” So one Florida newspaper reported that the Florida Department of Juvenile Justice purchased twice as many doses of Seroquel (a powerful anti-psychotic medication) than it did of ibuprofen. A 2004 study in Texas revealed that almost 35% of kids in foster care were receiving at least one – and in many cases as many as five – anti-psychotic drugs.

Child support is also a prime source of money for states that I’ll discuss next time.

But states don’t stop there. They also take money and assets belonging to foster kids themselves.

[S]everal states will also take other assets belonging to foster children, and even take the child’s own income. The Nebraska human service agency wrote a regulation that allows it to take almost all of a child’s resources to pay foster care costs… even burial spaces.

Hatcher provides a partial list of assets Nebraska allows itself to take from foster kids in order to defray the costs of their care: cash on hand and in savings or checking accounts, stocks and bonds, certificates of deposit, notes and loans due, mortgages, land contracts, leases, burial funds, trust or guardianship funds, cash value of insurance policies, real estate, trailer houses, burial spaces, life estates, farm and business equipment, livestock, poultry and crops, household goods and personal effects and federal and state tax refunds.

States argue that they should have the right to completely strip unknowing children of their assets in order to defray the cost of their care by foster parents. After all, foster care costs money and, if the child has the wherewithal to pay, why shouldn’t he? That argument, like all the arguments states assert for stealing children’s money has no validity.

In the first place, states are required by federal and state law to pay for services for children in foster care. They cannot legally fob that obligation off on anyone, and particularly not the kids themselves. As a moral matter, states might notice that the children aren’t in foster care because of their own wrongdoing, but that of their parents or other caregivers. Penalizing kids for the wrongs of others makes neither rational nor moral sense.

And from a legal standpoint, the onus is on states to provide foster care to children who need it due to abuse or neglect. Hatcher points out that,

States are legally obligated to pay this cost of foster care, and the Supreme Court has recognized that children are not obligated to pay for their own care and that… foster children do not owe a debt to repay the state.

Because state agencies in charge of foster care operate in almost complete secrecy – even from the children themselves – the process of (a) having themselves appointed as “representative payee,” (b) applying for, (c) receiving and (d) using children’s benefits for their own purposes not only appears to violate various state and federal laws, it also seems to violate the due process rights of the children. Surely children have the right to notice of the fact that their assets are being taken from them and a right to contest same.

Amazingly, states argue that they have no such right or, if they do, it’s been met. How? States have argued that, because they’ve had themselves appointed to represent the children and, as their representatives, they have the notice of the actions they’re taking to strip the children of their benefits. That the states emphatically are not acting on children’s behalf, despite having had themselves appointed to represent them seems to have escaped them. Likewise, the fact that they act entirely without the children’s knowledge apparently deters states not a whit in arguing against the constitutional rights of the children they supposedly represent.

Then, as previously mentioned, when states have themselves appointed to represent foster children they become fiduciaries for those children. The heavy legal duties of a fiduciary don’t sit well with state child protective agencies. Hatcher cites the Secretary of Maryland objecting before the state senate to any obligation to use a child’s social security benefits for the child and not the state itself. He even went so far as to threaten that, if such a law were passed (that would do no more than was already required by federal law), he would cut benefits to foster children accordingly. Amazing, but true.

When thieves have the gall to threaten reprisals if asked to stop stealing, we know that things have gotten out of hand, and indeed they have. There is a huge industry – The Poverty Industry – that exists to steal money from children and the poor. To date, it has gone about its business, often in secret, with few legal consequences.

I’ll deal with the final aspect of that business – child support –next time.




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National Parents Organization is a non-profit that educates the public, families, educators, and legislators about the importance of shared parenting and how it can reduce conflict in children, parents, and extended families. Along with Shared Parenting we advocate for fair Child Support and Alimony Legislation. Want to get involved?  Here’s how:

Together, we can drive home the family, child development, social and national benefits of shared parenting, and fair child support and alimony. Thank you for your activism.

#poverty, #socialsecurity, #fiduciaryduty, #theft, #fostercare, #children

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