TN 82 (05-00)

Citations:

Sections 1612(a)(2) and 1612(b) of the Social Security Act; 20 CFR 416.1102, 416.1103, 416.1120, 416.1121(a), 416.1124(c)(2), and 416.1124(c)(12)

A. Definitions

1. Foster Care

An individual is considered to be in foster care when:

• a public or private nonprofit agency places the individual under a specific placement program; and

• the placement is in a home or facility which is licensed or otherwise approved by the State to provide care; and

• the placing agency retains responsibility for continuing supervision of the need for such placement and the care provided.

2. Foster Care Payment

For SSI purposes, a foster care payment is a payment made to the foster care provider for the purpose of meeting the needs of the individual in care. (This includes not only the individual's need for food, clothing and shelter but also education, transportation, etc.).

NOTE: An agency may make an additional payment to the foster care provider for his/her own use (e.g., an incentive or service payment not intended to support the child). While these two payments may be combined and termed the "foster care payment" by the issuing agency, only the part which is provided to meet the needs of the individual in care is the foster care payment for SSI purposes.

B. Background

1. Foster Care Payments - General

a. Who Can Receive Foster Care Payments

Foster care payments are provided for both children and adults.

NOTE: The source of the payment might not be the placement agency. Sometimes placement is by one agency and the source of payment is another agency or an individual

b. Treatment of Foster Care Payments

Treatment of foster care payments depends on the funding source of the payments, the purpose of the payments, and whether the SSI recipient is the provider or recipient of the care.

2. Foster Care Under Title IV-E

a. Administration of Title IV-E Foster Care

At the Federal level, the foster care program authorized by title IV-E of the Social Security Act is administered by the Administration for Children and Families (ACF). Title IV-E provides for Federal matching funds to States for foster care under certain circumstances.

b. Type of Children Placed Under Title IV-E Foster Care

Children who are placed under title IV-E foster care are children who would have been eligible to receive Aid to Families with Dependent Children (AFDC) or Temporary Assistance to Needy Families (TANF) had they not been removed from their homes. These children are categorically eligible for Medicaid.

c. Availability of Title IV-E Funds

Title IV-E funds are available for care in a family home or a private child care institution, or in a public child care institution which accommodates no more than 25 children.

C. Policy – foster care payments

1. Title IV-E Foster Care Payments

a. Individual in Care

Foster care payments made under title IV-E (both the Federal amount and State amount) are considered income based on need (IBON)(SI 00830.170) to the individual in care. This income is not subject to the $20 general exclusion and is not ISM. (See SI 02005.025 for prospective accounting rules for title IV-E payments.)

EXCEPTION: Section 477 of title IV-E (Independent Living Initiatives) is a program for individuals age 16 or over making the transition from foster care to independent living. Payments made under Section 477 of title IV-E are cash assistance from a governmental social services program and, therefore, are not income (SI 00815.050).

b. Foster Care Provider

• Foster care payments (as defined in SI 00830.410A.2.) are not income to the provider.

• Amounts paid to a provider of foster care in excess of the foster care payment are income to the provider.

2. Title IV-B or Title XX Foster Care Payments

Foster care payments involving funds provided under title IV-B or title XX of the Social Security Act are social services and are not income.

3. Certain State- or Locally-Funded Foster Care Payments

Foster care payments funded wholly by a State or local government and under a program that uses income as a factor of eligibility are assistance based on need (ABON) (SI 00830.175). ABON is excluded from income.

4. Other Foster Care Payments

Foster care payments not described above are subject to the general rules pertaining to income and income exclusions.

NOTE: Assuming the foster care provider gives no cash to the individual in care (SI 00830.410D.4.), an individual in foster care whose foster care payment has no Federal funds involved may derive in-kind income but does not derive cash income directly from the foster care payment (SI 00835.790).

5. Filing for Other Benefits

An individual is never required to file for foster care payments in order to receive SSI.

D. Procedure

1. Title IV-E Foster Care Payments

• Verify the frequency and amount of title IV-E foster care payments (and any amounts paid to the provider in excess of the foster care payments) by using documents in the individual's possession or by contacting the appropriate State agency.

• Follow any regional, State, or local verification procedures.

NOTE: In an initial claim, if countable income, including any title IV-E foster care payments, exceeds the FBR, the claim should be denied for excess income.

2. Title IV-B or Title XX Foster Care Payments

Use documents in the individual's possession, FO or regional precedents, or contact with the agency to verify title IV-B or title XX involvement.

3. Certain State- or Locally-Funded Foster Care Payments

Use documents in the individual's possession, FO or regional precedents, and/or contact with the agency to verify that the assistance is ABON. If so, exclude the payment from income.

4. Other Foster Care Payments

• Assume that the provider of foster care gives no cash to the individual in care, absent evidence to the contrary.

• Keep in mind that an individual whose foster care payment has no Federal funds involved may derive in-kind income but does not derive cash income directly from the foster care payment (SI 00830.410C.3.).

• Determine the nature of the foster care and apply the appropriate rules pertaining to income. Consult any regional instructions on foster care payments.

• Assume that the payment made to the provider of foster care is to meet the needs of the individual in care and, thus, is not income to the provider, absent evidence to the contrary.

5. Foster Care Payments to Providers of Foster Care

• Verify that the placement meets the definition of foster care in SI 00830.410A.1. Use documents in the individual's possession, field office or regional precedents, or contact with the agency. If a precedent has been established, document the file to show this.

Generally, accept the allegation of the placement agency as to its nonprofit (tax exempt) status without further verification.

NOTE: Determinations of tax exempt status are made by the Internal Revenue Service (IRS), and in a few situations where the status is unknown or questionable, it should be verified by seeing the agency's tax-exempt IRS letter, or by contacting IRS.

• Assume that the payment made to the provider is a foster care payment (i.e., is to meet the needs of the individual in care) and is not income to the provider, unless there is evidence to the contrary.

• If the provider is an SSI recipient or deemor and evidence indicates a payment includes additional monies above the foster care payment, verify the purpose(s) of the payment and the amounts involved using documents in the individual's possession, FO or regional precedents, or contact with the agency. Consider any payment in excess of the amount paid to meet the needs of the individual to be income to the care provider.

NOTE: This income is usually unearned income but may be earned income (see RS 01802.000 for self-employment earnings).

If the care provider is not self-employed and evidence indicates a payment was made for a specific service (e.g., $20 for shopping assistance), accept the care provider's signed allegation of any cost of providing the service (e.g., $5 automobile expense). Deduct the cost from the payment (SI 00830.100) and consider the remainder to be unearned income.

E. References

• Forms and amounts of income, SI 00810.020.

• $20 general income exclusion, SI 00810.420.

• Medical and social services, SI 00815.050.

• Assistance based on need, SI 00830.175.

• Foster care payments made by the Bureau of Indian Affairs, SI 00830.810.

• ISM in Non-institutional Care, SI 00835.790.