'Unprecedented': New Mexico foster children will now be allowed to keep federal benefits owed to them

The acting head of the state Children, Youth and Families Department has halted a long-standing agency policy of tapping federal benefits owed to children in state custody to offset the cost of foster care.

In a letter to staff effective July 21, acting Cabinet Secretary Teresa Casados promised that the agency will now keep the benefits in trust for the intended recipients.

“CYFD will not use Social Security Administration (SSA) Title II benefits (Retirement, survivors, disability insurance) and Title XVI benefits (Supplemental Security Income) received on behalf of children in state custody to pay for foster care maintenance and/or child incidental payments,” she wrote in a letter posted on CYFD’s website.

“Any SSA benefits to which CYFD is the representative payee will be held in a trust for each individual child or youth entitled to that benefit,” Casados wrote, adding that “implementation policies and procedures” will be distributed by Sept. 1.

A spokeswoman for CYFD didn’t respond to Journal questions about the letter.

The Congressional Research Service showed New Mexico was among 38 states that used a total of $179 million in benefits received in 2018 on behalf of children in foster care to reimburse the costs of providing care for those children.

New Mexico received nearly $8 million in 2018 on behalf of children in state custody who were entitled to SSI or other federal benefits, stated the report, which was prepared for members of Congress in 2021.

About 11.5% of children in New Mexico foster care received federal benefits that year.

CYFD acts as the representative payee for abused or neglected children who are taken into state custody and qualify for the checks because they have a mental or physical disability, a deceased parent, or other needs.

A national policy expert from the Children’s Advocacy Institute told the Journal on Monday that Casados’ decision is “unprecedented.”

“New Mexico is the first state in the nation to take responsibility in such a meaningful way, acknowledge the injustice of this practice and vow to take immediate action,” Amy C. Harfeld, national policy director of the institute, said in an interview from New York City on Monday.

Casados also received praise from the nonprofit Pegasus Legal Services for Children, based in Albuquerque.

“Casados has committed CYFD to keeping all benefits received on behalf of children in state custody to be kept in trust,” a press release posted on the Pegasus website stated. “Previously, these funds were used to pay for foster care maintenance and/or child incidental payments.”

“This change marks a movement toward transparency and stewardship between CYFD and the community it serves,” the press release stated. “Thank you, Interim Secretary Casados and General Counsel Julie Sakura, for this important step toward progress.”

Harfeld decried the practice of using a child’s Social Security benefits to pay for their basic care, which she said is “already an obligation of the state of New Mexico” to pay.

According to her organization, states routinely screen and apply for benefits on behalf of foster youth without ever notifying them, their attorneys/representatives, or the court. They then automatically nominate themselves to serve as the representative payee, deposit the child’s funds in their own accounts, and use the benefits to supplant their existing obligation under federal and state law to pay for care.

In most cases, judges, attorneys, and youth themselves never learn that these benefits were applied for or received, or how they were used, the institute said.

Earlier this year, Arizona became the first state to pass a law to ensure foster children, not the state, receive such benefits.

Preserving youth benefits is so important to young people who age out of the system without a family to help them transition into life. These funds will help young people pay for housing, transportation, education, and other essential needs that we couldn’t fulfill by ourselves,“ Ian Marx, child welfare advocate and former youth in foster care, told the Arizona Business Magazine.Questions about the practice in New Mexico surfaced July 17 at a hearing of the legislature’s Courts, Corrections and Justice interim committee.

Both Casados and Sakura, who fielded questions from legislators at the hearing, promised to look into the issue. The letter was published four days later.

Both women are relatively new to the agency, with Casados, the governor’s chief operating officer, taking over the agency in May until a permanent cabinet secretary is hired.

The benefits money is typically more than $700 per month, said the New Mexico Child First Network organization, which has been working to pass legislation directing CYFD to establish protected trust accounts for youth who receive such benefits. Casados’ letter stated her directive will expire March 1, two weeks after the legislature’s 30-day session ends.