On any given day, more than 400,000 children are in foster care due to incidents of abuse, neglect, or other reasons that prevented them from remaining with their parents. Of these children and youth, some 6% received Supplemental Security Income (SSI) under Title XVI of the Social Security Act or another Social Security benefit (e.g., Survivors benefits) under Title II of that act. Among the 28,000 youth who were discharged from foster care during FY2010 because of their age rather than because of placement in a permanent family (i.e., they "aged out" or were "emancipated"), some 9.5% (2,700) were receiving SSI or Survivors benefits at the time of their exit from care. The Social Security Administration (SSA) may designate a government entity as the representative payee of a foster child if the child's custodial or non-custodial parents, guardians, relatives, stepparents, or a close friend are not available to serve in that role. As the representative payee, the state (like any other representative payee) is required to manage the child's benefits and to use the benefits for the current maintenance (food, clothing, shelter, medical care, and personal comfort items) of the child. Nearly all states use SSI and/or other Social Security benefits to pay for foster care. Thirty-eight states and the District of Columbia reported on their use of these benefits in state FY2006, and these benefits totaled $156.6 million. In recent years, some child welfare advocates have legally challenged the practice of using foster children's SSI and other Social Security benefits to reimburse states for the cost of providing their foster care. The most prominent case, Washington State Department of Social and Health Services v. Guardianship Estate of Keffeler , reached the U.S. Supreme Court, which, in 2003, upheld this practice. Nonetheless, the Keffeler decision raised questions about the federal government's role in regulating the use of Social Security and SSI payments to fund foster care, and some advocates remain concerned about the use of these benefits. This report begins with a discussion of the foster care system and the Social Security benefits available to eligible children, including those in foster care. It then describes the role of representative payees and their responsibilities. The report provides data on the use of Social Security benefits to reimburse states for child welfare, and includes a discussion of the Keffeler decision. Finally, the report concludes with proposals supported by some advocates to change the current practice of using SSI and other Social Security benefits to fund foster care. Children in foster care are children for whom a state (or tribe) has been given formal responsibility for a child's care and placement by a court or by a voluntary placement agreement between the state and a child's parent or legal guardian. Foster care is the round-the-clock care of a child outside the child's home and is typically necessary because of neglect or physical abuse of the child by his or her parents or, less commonly, due to child behavioral issues that make the home unsafe for the child. Children who are removed from their homes may be placed in foster family homes, institutions, or group homes by the state child welfare agency. This section discusses how state child welfare agencies use federal and state dollars to pay for children in care, and how child welfare agencies provide assistance to children likely to emancipate or "age-out" of foster care. The federal government has established certain requirements related to state provision of foster care that are applicable to all children in foster care. These include that a state has a written case plan detailing, among other things, where the child is placed and what services are to be provided to ensure that a permanent home is re-established for the child. Further, for each child in foster care, this plan must be reviewed on a regular basis, including a review by a judge no less often than every 12 months. For many children who enter foster care, returning to their parents is the way permanence is re-established. For some children, however, it is not safe or possible to reunite with their parents. In those cases states must work to find adoptive parents or legal guardians who can provide a permanent home and family for these children. Title IV-E of the Social Security Act authorizes the federal-state foster care program. Under this program, a state may seek federal funds for partial reimbursement of the room and board costs needed to support eligible children who are neglected, abused, or who, for some other reason, cannot remain in their own homes. Funding for the Title IV-E foster care program is appropriated out of the general treasury and is available on an open-ended entitlement basis. This means the federal government is obligated to reimburse states for every eligible cost made on behalf of an eligible child. Of the more than 400,000 children in foster care in the United States on any given day of the year, a little less than half of these are estimated to be eligible for federal foster care support under Title IV-E. To be eligible for Title IV-E, a child in foster care must also (1) meet income/asset tests and family structure rules in the home from which he/she was removed; (2) have specific judicial determinations made related to reasons for the removal and other aspects of his/her removal and placement; and (3) be placed in an eligible licensed setting with an eligible provider(s). The state child welfare agency is required to use federal Title IV-E funds to provide a "foster care maintenance payment" to the home or institution where the eligible child is placed to provide for their care and safety. Title IV-E defines a "foster care maintenance payment" as "payments to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child's personal incidentals, liability insurance with respect to a child, reasonable travel to the child's home for visitation and reasonable travel for the child to remain in the school in which the child is enrolled at the time of placement." States are allowed to determine how much the total foster care maintenance payment will be for each child, and even within states the amounts may vary considerably based on factors like the child's age, special needs, or placement setting (e.g., home vs. institution). The portion of each eligible foster care maintenance payment that is reimbursed by the federal government is determined by the state's Federal Medical Assistance Percentage (FMAP), which may range from 50%, in states with the highest per capita income, to a maximum of 83%, in the lowest per capita states. In FY2011, the most recent year for which these data are available, states made foster care maintenance payments on behalf of an average of 168,385 Title IV-E eligible children each month. Those payments cost about $2.406 billion and states claimed federal reimbursement of $1.169 billion. For FY2011 then, the average monthly maintenance payment cost per eligible foster care recipient was about $1,427 and of this amount, the federal government reimbursed states roughly $829 (about 60% of the total costs). This federal share of maintenance payment costs is higher than in previous years (when it stood at about 56%) because states received enhanced federal support for foster care maintenance payments under provisions of the American Recovery and Reinvestment Act ( P.L. 111-5 , as amended by P.L. 111-226 ) for a part of FY2011. In addition to the maintenance payment, the Title IV-E foster care program reimburses other eligible costs that are related to case management and child placement services, and other foster care program administrative costs, including development and operation of a system for statewide child welfare data collection. In most instances, administrative claims may only be made with regard to costs incurred on behalf of Title IV-E eligible children. In FY2011, states spent $4.075 billion for these broadly defined Title IV-E foster care "administrative" costs and received federal reimbursement for one-half ($2.038 billion) of these costs. States are also permitted to claim some reimbursement for training costs related to provision of foster care (so long as they are made on behalf of eligible children). For FY2011, states made claims of $269 million and the federal share of Title IV-E claims for those purposes was about $201 million. Finally, a number of states receive Title IV-E support under special waiver authority that enables them to use the funds for a broader range of child welfare purposes than would otherwise be possible under the Title IV-E foster care program. For FY2011, $683 million in federal Title IV-E foster care funding was distributed to certain states under child welfare waiver demonstration authority. Between one-fifth and one-quarter of a million children in foster care—that is, children removed from their homes and given over to the care and placement responsibility of the state—do not meet the federal Title IV-E eligibility criteria. The federal government does not explicitly require that a state make a foster care maintenance payment on behalf of these children. Practically speaking, however, placing such a child in an out-of-home setting without providing some reimbursement for the cost of that child is difficult, and in many circumstances might be considered a questionable exercise of the state's responsibility for the child. Accordingly, all states are believed to provide payments on behalf of children who are placed out of the home and under the responsibility of the state, regardless of the child's Title IV-E eligibility status. (However, some states do pay lesser amounts to relatives who provide foster care for non-Title IV-E eligible children.) In general, maintenance payments to support foster children who are not Title IV-E eligible must be supplied by the state (or local) government.