Court says state can keep foster kids' Social Security benefits

By Maureen O'Hagan
Seattle Times staff reporter

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A 14-year battle on behalf of thousands of foster children may be over, after the Washington state Supreme Court ruled in a high-stakes case Thursday that the state was entitled to use the children's Social Security benefits to pay the cost of their care.

The case began when 12-year-old Danny Keffeler and his grandmother asked Okanogan lawyer Rodney Reinbold to help them get back the Social Security checks he was entitled to from his mother who had died.

The state had taken the money by claiming that it — not the grandmother — was the "representative payee" for the benefits. The Department of Social and Health Services (DSHS) then used the money to reimburse itself for part of what it paid out to Danny's foster parents.

Reinbold thought it was unfair that Danny had to pay his own way, and for several years, Reinbold had legal successes in trial courts, appellate courts and administrative hearings.

One of his arguments was that if Danny's grandmother, rather than the state, were the payee, she could use the $136-a-month benefit to buy things such as books, piano lessons or clothes for Danny. As long as the payee is using the money in the child's best interest, his or her role can't be challenged, Reinbold argued.

With the state as Danny's payee, he received only the foster care, which he was entitled to anyway, although occasionally the state grants caseworkers' petitions asking that the child be allowed to keep some of the money for a specific purpose.

DSHS Secretary Dennis Braddock saw it completely differently.

"This is not taking money from orphans," he said in late 2002. "It's getting money for orphans." (Typically, foster children are unaware they are eligible for Social Security in the first place, so the state applies on the child's behalf.)

Reinbold found that as many as 10,000 foster children had been in the same position as Danny, and his lawsuit against the state became a class action on their behalf.

Reinbold won the case for Danny because of rulings that said the state violated federal law by taking his grandmother out of the role of representative payee. She was returned to the position, and DSHS agreed to reimburse about $5,000 in benefits it had confiscated.
 
"(The grandmother) saved his money and Danny graduated from Central Washington University because of it," Reinbold said.

If he had had similar success with the thousands of other plaintiffs, the state could potentially owe millions of dollars.

That's not how it turned out.

In the 6-2 ruling Thursday, the state Supreme Court said the state did not violate the Constitution by getting itself appointed as payee for children in foster care and keeping their benefits, as long as it was using the money in the child's best interest.

The court went further to suggest that if any individual children think their money is being spent improperly, they can go to the Social Security Administration to contest that, as Danny did.

DSHS characterized the case as a win for foster children, saying that if the state were forced to repay money to thousands of children, there would be fewer resources for all children in foster care. About 5 percent of the annual foster-care budget comes from Social Security benefits.

Reinbold is devastated.

"It's been a long, dusty case for nothing," he said, adding that he may appeal it to the U.S. Supreme Court, which already ruled against him on another aspect of the case.

But Reinbold sees one more avenue for foster children: Find an adult who can be appointed to keep their Social Security benefits.

"If the child can just get the information that he can get a private payee appointed, he can still save his benefits," Reinbold said.