Colorado orphans, disabled kids have to pay for their own foster care unlike other children

County child welfare departments for years have applied for federal disability and parental death benefits on behalf of Colorado foster children, then used the Social Security funds to help cover the cost of foster care. 

The foster kids often are not even aware the benefits were claimed on their behalf until they were no longer in the system.

The practice, which has occurred across the country, was little known and without scrutiny until recently. But outrage has been building the last two years among child advocates, lawmakers and former foster kids, all asking why kids whose parents are dead and kids with disabilities — unlike other children — have to pay for their own shelter and food when they’re sent to foster homes.

“This is discrimination against disabled kids. You can’t pay for every other kid’s foster care and make disabled kids pay for their own,” said Amy Harfeld, national policy director for the Children’s Advocacy Institute. “And it’s discrimination against orphans.

“It’s not a good look for agencies to be called out for picking the pockets of children that they exist to serve.” 

The Colorado Department of Human Services estimates that counties are collecting a total of about $2 million per year in Social Security disability and death benefits for children in foster care. That’s a tiny fraction of the annual budget for the state Office of Children, Youth and Families, which is $784 million in state and federal funds. 

But to individual kids, that money — had it gone into an account that they could use for sports, music lessons, camp, a first car or a down payment on their first apartment — might have been life-changing, say Harfeld and other advocates for change. 

Arizona was the first state to pass a law saying that child welfare agencies could no longer use children’s benefits to pay for their care. Instead, children in that state have trusts set up for their extracurricular activities, camps or other “unmet needs” and the state must release any remaining money to the child when they leave foster care. 

The funds amounted to $6.1 million per year in Arizona. 

“Kids did not ask to be here”

Io Panizzon aged out of foster care with almost nothing, spending the next several years destitute and homeless. 

Arapahoe County had been collecting Social Security benefits on Panizzon’s behalf — about $700 per month that the county used to help cover the cost of foster care. Panizzon, who spent six years in care, realized this only after applying for Social Security disability benefits at age 21 due to mental illness, including schizoaffective disorder.  

Panizzon, who is now 29, felt robbed by the people and the system that was supposed to protect them. 

“That would have helped me so much,” said Panizzon, who uses they/them pronouns. “I had already been on the streets for almost four years. I could have at least paid for a hotel room here and there.”

For Panizzon, seeing the record of three years of previous Social Security disability payments felt like a betrayal. “It was like I have this wound that is not healed but it was scabbed up,” Panizzon said. “Seeing that paper was like taking the scab off before the scab was ready to come off. I never saw a penny of the money they took out on my behalf. I didn’t even know about it.

“Kids deserve to be kids. Kids did not ask to be here. If the government is going to decide that some parents don’t need to have their children in their home, those kids deserve everything that should have come from their parents.” 

Panizzon went into foster care at age 12 in 2007, living in 27 different foster homes, group homes, residential facilities and juvenile detention centers. At 18, Panizzon left youth corrections and moved into the Urban Peak youth homeless shelter. For years, Panizzon slept at the shelter, on friends’ couches or outside. Panizzon had an apartment for a time, but lost it after not keeping up with the rent. Keeping a regular job was difficult because of the mental health disability, which Panizzon suspects was caused by so much childhood trauma. 

“Wherever they had a bed for me, that’s where they stuck me,” said Panizzon, who does not talk to their biological parents. 

Now, Panizzon receives $866 per month in disability benefits and has an apartment north of Denver decorated with posters and stickers. “I have a dream apartment right now,” Panizzon said. “It has all the fixings, like in-unit washer and dryer and a patio.

“I’m on my healing journey. I am still destitute,” said Panizzon, who dreams of becoming a journalist and advocates for change in the foster care system. “It’s hard to plan for the future or be excited for the future when you are constantly expecting that feeling like ‘when is the other shoe going to drop.’” 

State does not track, manage benefits funds

The Colorado Department of Human Services, in response to a request from The Colorado Sun, said total statewide benefits collected on behalf of children had ranged from $2 million to $2.8 million per year since 2019.

State officials said they didn’t have data to show how many Colorado children had Social Security benefits that counties were using to reimburse themselves after paying foster parents, group homes and other facilities that take in children. 

“CDHS does not track or manage these funds,” the department said via email.

Colorado practice is typical of states across the country, according to the department, which includes the child welfare division. When a child is in child welfare custody, counties apply for benefits on their behalf and act as the representative payee. 

After the cost of their care has been covered, “the county may place funds into a trust for the children,” the department wrote to the legislature’s Joint Budget Committee this year after state lawmakers on the committee asked questions about children’s benefits. “However, the cost of care typically exceeds the benefit,” the department said. 

The department also wrote that the child welfare system can take the money “without knowledge of the youth, guardian, or attorneys involved in the case.” 

Unlike Arizona, Colorado has a state-supervised, county-administered child welfare system, meaning that counties are applying directly to the Social Security Administration for benefits and state officials have “no role” and “limited data,” the Colorado Human Services Department told lawmakers in a recent budget document. 

The state child welfare division estimated in the budget documents that $1.7 million in federal benefits were received for 2,231 in Colorado. Meanwhile, the cost for caring for these children was $9.2 million. 

An estimated 10% of foster children nationwide are eligible for Social Security benefits either because their parents have died or they have a physical or intellectual disability. 

Social Security Administration indicates it welcomes change

The Colorado Office of the Child’s Representative, whose attorneys represent children in the child welfare system, knows of just one case in which a judge ordered a county to deposit all future benefits into a trust for the child. 

The child and the child’s attorney were never told and had no idea the benefits were even being dispensed. In some counties, the child’s caseworker doesn’t even know about the benefits, the office said.

“It’s really hard to advocate for something you don’t know about,” said Ashley Chase, a staff attorney and the office’s legislative liaison. “It’s all happening in a black box.” 

After learning about the nationwide issue, revealed in a 2022 Marshall Project report, the Office of the Child’s Representative has trained its attorneys on how to seek children’s federal benefits. 

Attorneys for children in foster care have tried to fight for the information in court, but the results have often left more questions than answers. 

“Once they got the information, it really was just so bare bones,” said Sheri Danz, the office’s deputy director. “We really couldn’t make too much sense out of how the money was actually used in any individualized way.”

Recent guidance from the Social Security Administration indicates the county or state child welfare agencies acting as children’s payees is not the preferred practice, though it’s not against the rules. The SSA noted that foster children “are among the most vulnerable populations we serve” and the administration is invested in “protecting their rights.”

“We’re seeing a child pay for their own care in a situation where they did not ask to be removed from their family or put into state custody,” Chase said. “This should bother anyone in our state, regardless of whether it’s allowable or not.”

Newly elected lawmaker has plans for change

Incoming state representative Lindsay Gilchrist, a Park Hill mom who adopted two foster children, wants foster kids to hang onto their own benefits. The Denver Democrat, who will represent District 8, is working on legislation that she plans to introduce after the session begins in January. 

Gilchrist learned of the issue when a friend taking in two foster teenagers found out that the county had collected $37,000 in parental death benefits on the children’s behalf. 

The benefits are especially important for teens aging out of the foster care system. About one-third of young people who emancipate from the system end up homeless, often leaving the system with nothing but a bag of clothes.

“They are not entering into care for any fault of their own,” Gilchrist said. “If you understand what kids are up against when they are aging out of care … or sometimes they are in the middle of high school — to have some money to help support them is game changing.

 “I understand that counties and the state are really strapped for funding but these are benefits that children are entitled to.”

Children who grow up in the system face huge barriers when they exit, and the state needs to do more to help them succeed, she said. “It’s utterly heartbreaking,” Gilchrist said. “We just have to do better.” 

National children’s advocacy groups are pushing for governors, including Gov. Jared Polis, to make the change through executive order. Meanwhile, federal legislation is expected to be introduced in Congress. 

Weld County, Boulder County leading change

A law passed this year — a wide-ranging document called the Bill of Rights for Foster Youth — says that children in foster care are entitled to notification when a county has applied on their behalf for Social Security benefits and entitled to an accounting of the funds on an annual basis. 

But for a few exceptions, many counties are not in compliance.

Weld County has been keeping track of children’s funds for years and is frequently referenced as a model program in Colorado. 

Weld County is currently managing benefits for 35 children and teens, who are receiving a combined $417,476 in Social Security benefits in a year. That’s out of about 150 children in the county child welfare system at any given time. A full-time person in the county’s child welfare division keeps track of each account, and in cases where the fund has covered the cost of sheltering and feeding that child, leftover funds go to specific needs for that child. 

Leftover funds have paid for weighted blankets, shoes for sports, makeup, plus behavioral health or equine therapy that was not covered by the children’s Medicaid insurance, said Julie Witkowski, Weld County’s family resource division director.

For teens who are emancipating from foster care to live on their own, Weld County uses benefits funds for first month’s rent and household items. Under federal law, the county must relinquish any leftover funds to the Social Security Administration when the child is no longer in their custody and the county is no longer the payee on the account. Then the young adult, after emancipating, has to apply for benefits and receive the funds that were still in their account. 

“Usually when kids are aging out, we have a long runway for transition to emancipation,” said Jamie Ulrich, director of the Weld County Department of Human Services. “We help them apply for adult benefits. We really try to make it a conscientious effort to walk them through that.” 

Ulrich declined to give an opinion, without consulting with Weld County commissioners, on whether the county would support a law change in which it could no longer use Social Security benefits to cover the cost of children’s foster care. 

Boulder County changed its policy in October for foster children receiving their deceased parents Social Security benefits, putting all the money in a trust and not using any to pay for their foster care. The policy had existed for six years for foster teens 14 and up, and was extended to all kids this fall. There are seven children who have the trusts, with two more applications being filed.

“The question arose as to why we were only doing it for 14-year-olds,” said Angelina Bustillos, who supervises the team that manages the benefits. “It made us stop and think and say, yeah we should be doing it for all children.” 

For children with disabilities, however, federal disability benefits still go toward reimbursing their foster families and residential centers for their care. The Social Security Administration pays $943 per month for child disability benefits. But the lowest level of foster care costs at least $1,836 a month in Colorado, Bustillos said.

Summer Laws, a policy advisor for the Boulder County commissioners, said the county has not seen a draft of the state legislation that’s in the works but that county officials will have questions about funding. “I’m excited to hear they will be working toward finding the funding to cover the cost of care that’s currently covered by the Social Security Administration, but, I know that it’s a challenging year, too,” Laws said. 

“Just extremely vulnerable”

TGTHR We Can End Youth Homelessness, a Boulder organization that provides shelter and housing, regularly meets young people who have just left the foster care system and have no idea what benefits they might have, said Annie Bacci, executive director. 

She suspects it took this long for the Social Security benefits issue to come under a spotlight because young people didn’t even know it was happening. 

“It’s extremely common that they don’t know if they’re enrolled in Medicaid,” she said. “They don’t know if they’re connected with any disability benefits.” 

TGTHR helps the young people apply. About 30% of the young people receiving help from the organization are from the foster care system and about 30% have a disability that makes them eligible for Social Security benefits, she said. 

Bacci wonders how much better off some of them would be if they started their adult lives with even a few thousand dollars in a bank account.

“The first six months when a youth is exiting foster care is the most critical time,” she said. “It’s the most common time that young people are falling into homelessness. It’s the most common time to be approached for trafficking and other kinds of exploitative situations. The youth are just extremely vulnerable.”