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Sam Heldman


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Monday, December 02, 2002
No. 01-1420 Washington State Dept. Soc. & Health Servs. v. Guardianship of Keffeler

Here is an interesting case about the allocation of Social Security benefits to children in foster care. Children can receive Social Security benefits because of a disability or because of dependence on a disabled worker who is or was eligible for Social Security payments. The Social Security Administration may pay the benefits directly to the beneficiary, or, as here, appoint a “representative payee” who must use the benefits for the beneficiary’s current needs. Social Security funds may not be used to satisfy the obligations of creditors, and may not be assigned to any other party.

This case concerns beneficiary children in Washington, where the state was appointed as the representative payee. The state, in turn, applied the children’s benefits to the cost of providing them foster care. The question is whether the state may pay itself the cost of providing foster care out of the children’s Social Security funds.

I think this case is the same as Philpott v. Essex County Welfare Bd., 409 U.S. 413 (1973) and Bennett v. Arkansas, 485 U.S. 395 (1988). In those cases, the Court held that Social Security benefits could not be attached, either to reimburse a state for welfare benefits (Philpott) or to pay for the costs of incarcerating a payee (Bennett). The wrinkle here is that the state has been appointed the representative payee, where in the prior cases it had not.

Nevertheless, I think that the Court will see that this isn’t really any different. A representative payee must use the benefits in a way that is “in the best interests of the beneficiary.” However, Washington pays for the foster care of children regardless of whether they receive any Social Security benefits. Thus, an unbiased representative payee would have to conclude that the child’s best interests would be served by investing the benefits and letting the state pay for the child’s foster care. Here, the state makes the argument that because it is providing the current care, that it is allowed to apply the child’s benefits to that purpose by paying itself. It seems pretty self-serving. I think the court will AFFIRM the decision of the Washington Supreme Court, that the state may not use the benefits in this way.