Kansas executive order directs DCF to preserve foster youths’ federal benefits, phase out agency use by July 1

The Kansas governor's executive order 2501 directs the Department for Children and Families to stop using federal survivor and disability benefits to reimburse the state for foster-care maintenance and to preserve those funds for the children who are eligible. Secretary Laura Howard said the agency will create ABLE and other accounts to hold benefits that exceed the $2,000 asset limit and phase out the prior practice by July 1.

Why it matters: Committee members and advocates said preserved benefits can help youth who age out of foster care pay for housing, education and other needs. Witnesses urged the Legislature to codify the change and to provide state budget support for services and implementation costs.

Secretary Laura Howard, head of the Kansas Department for Children and Families, told the House Committee on Child Welfare and Foster Care that the change will "conserve" funds for youth and that DCF will "screen children for eligibility" and serve as the initial representative payee in many cases while transitioning accounts at permanency. Howard said Kansas identified about 950 children who currently receive federal benefits, "just under 400" who receive survivor benefits and "about 488" who receive disability benefits, with roughly $9,000,000 in federal cash benefits that had been used to offset foster-care costs (about 3% of the foster-care budget).

Advocates framed the order as a correction of past practice. Mike Fonker of Kansas Appleseed said the order is "a recognition of these children's rights to these benefits," arguing it ends the practice of using benefits for the cost of care. Fonker reviewed national reporting and federal guidance from August 2023 that urged states to preserve these benefits for youth as they enter adulthood; he also cited outcomes for older youth in care, including high rates of homelessness and low educational attainment.

Implementation details discussed at the hearing included: - Accounts and payees: For youth with disabilities, the state will prioritize ABLE accounts (tax-advantaged accounts that allow savings above $2,000 without affecting SSI eligibility). For other eligible children DCF will maintain personal-needs accounts and will serve as the initial representative payee when appropriate, then transfer payee authority at custody release or permanency through the Social Security Administration (SSA) process. - Safeguards and SSA oversight: Secretary Howard and DCF General Counsel Mark Altenberg emphasized that SSA administers the representative-payee approval process, including identity verification, a face-to-face interview and criminal background checks. Rebecca Gerhardt of DCF said courts may recommend a payee in permanency orders but SSA must approve any change. - Access while in care: DCF will continue to allow approved, case-managed requests to spend personal-needs or ABLE funds for allowable items while a child remains in care (examples discussed: technology, education-related expenses, assistive devices). Howard described annual reporting requirements associated with representative-payee responsibilities. - Financial counseling: DCF currently provides basic independent-living financial training for youth age 14 and older; Howard said the executive order calls for a work group (including the treasurer's office and outside partners) to expand financial education for youth and, where appropriate, for representative payees. - Phase-in and examples from other states: Howard said the state consulted Arizona and will use a phased approach; the governor set a July 1 goal to halt the prior practice.

Treasurer's office officials described ABLE accounts and fees. Deputy Assistant Treasurer Tom Tracy said ABLE accounts were created to address the $2,000 asset limit for people on SSI and detailed program features and fees, noting full fees can be about $56 per year and reduce to about $26 annually for Kansas residents who enroll paperless. John Hedges, deputy general counsel for the treasurer's office, said ABLE programs recognize representative payees appointed by SSA and that ABLE programs can retain funds in the account while SSA processes a rep-payee change.

Concerns raised by committee members included the administrative burden on DCF to manage many accounts, the timing and speed of SSA processing and the need for stronger financial counseling and safeguards for youth and any adults who help manage funds. Representative Susan Humphreys pressed for clarity on transitions when youth leave custody; Howard and DCF staff said transition planning will be part of permanency case planning and that DCF will start the process several months before custody ends.

Stakeholders urged follow-up actions: Mike Fonker asked the Legislature to codify the change in statute and to appropriate funds to replace the offset the state previously realized; Crystal Hedrick of Children's Alliance of Kansas voiced support for the order's intent and asked for clarity on who may access funds and what training and safeguards will be provided.

The committee did not take a formal vote on statute at this hearing; members used the informational session to ask implementation questions and to request further details on budget implications and operational plans. DCF and the treasurer's office said they will continue stakeholder work and provide more specific implementation plans to the committee.

A representative excerpt of participants: Secretary Laura Howard (Kansas Department for Children and Families); Mark Altenberg (General Counsel, DCF); Rebecca Gerhardt (DF C permanency/forensic licensing staff); Mike Fonker (Kansas Appleseed); Crystal Hedrick (Children's Alliance of Kansas); Tom Tracy and John Hedges (Kansas Treasurer's Office).