Division 3 retains HB661 to study changes to handling foster youths' Social Security and veterans benefits

Finance – Division 3 voted to retain HB661 and continue detailed work before the HB2 budget decisions, after hours of testimony on whether the state should remain the default representative payee for Social Security and veterans benefits that accrue to children in foster care.

What the bill addresses: HB661 would change how certain federal benefits are handled when a child enters foster care. Under current practice described in committee testimony, the Department for Children, Youth and Families (DCYF) frequently becomes the representative payee for children who receive Social Security or veterans benefits; DCYF retains those funds and applies them toward the child’s care. Advocates and a young man who had been in care argued the funds should be conserved for the child at the point they age out of care and used to support the transition to independence.

Testimony and numbers: former foster youth Dawson Hayes testified that DCYF “pocketed my Social Security payments, keeping a total of $16,000 that was intended for me,” and urged the committee to change the practice. A consultant report commissioned for the committee identified roughly 290 children in foster care who would fall into the categories affected by the bill. Advocates said 78 of those children in the consultant’s snapshot were eligible for Supplemental Security Income (SSI) because of a disability; the remainder were eligible through parents’ death or disability.

Agency and fiscal considerations: DCYF indicated the policy is long‑standing and that implementation of a change would have fiscal implications. The committee heard an estimate in the consultant report that moving away from the current state practice could increase general‑fund costs (testimony referenced an order‑of‑magnitude figure discussed in the report of roughly $2.4 million, to be refined). Legal and federal rules governing appointment of a “suitable” representative payee were discussed at length; advocates pointed out federal Social Security rules set a preference order for rep payee appointment and say the state should be a payee of last resort.

Process and next steps: the committee did not vote on policy changes but voted to retain HB661 and asked to continue work on funding options, identify possible administrative and legal steps (including appeals or federal rep‑payee procedures), and to examine available federal administrative claiming (4‑E) or other sources referenced in reports such as PCG and Chapin Hall. A bipartisan subgroup was identified (Representative Wallner and a Republican member to be confirmed) to continue discussions and gather data before the division’s HB2 decisions.

Action taken: HB661 retained for further study and carried into HB 2 deliberations; committee members requested an updated fiscal analysis and asked DCYF, advocates and legal counsel to provide detailed implementation options and revenue/accounting locations in the budget.