SB 5488 — Summary (2025 Regular Session)
Title: Strengthening the financial stability of persons in the care of the Department of Children, Youth, and Families (DCYF)
Purpose
- Prevent DCYF from using certain public benefit payments received on behalf of youth and children in its care to reimburse the state for cost of care, and strengthen protections and account management for those benefits.
- Require proactive screening and application for Supplemental Security Income (SSI) and Social Security (RSDI) benefits, create safeguards for benefit funds, and provide financial literacy training for youth exiting care.
Key provisions
- Prohibition on reimbursement
- Substitute (S-1116.3) phases in the prohibition: beginning Jan 1, 2026 DCYF may not apply benefits/payments as reimbursement for cost of care for youth age 14–17. Beginning Jan 1, 2028, and subject to appropriations, the prohibition expands to persons younger than 14 or older than 17.
- (Original bill would have applied to all persons in care as of Jan 1, 2026.)
- Screening and application for federal benefits
- DCYF must screen persons in out-of-home placement for SSI and RSDI eligibility on an ongoing basis.
- If eligible, DCYF must apply for SSI/RSDI on the person’s behalf; persons over age 12 must be asked to consent to release information.
- DCYF must notify the person and caregivers/parties to the dependency (or parents/legal guardians for juvenile rehabilitation cases) when an application is filed, provide SSA information about potential representative payees, and maintain benefit eligibility.
- DCYF may delay applying to become representative payee if the permanency plan is reunification.
- Management of benefits when DCYF is representative payee
- DCYF must place benefit funds into an account to meet the person’s unmet personal needs that are not otherwise covered.
- When funds would jeopardize SSI/Medicaid eligibility, DCYF must place excess funds in accounts that do not count against program asset limits (examples: ABLE account per RCW 43.330.462, special needs or pooled trusts, savings).
- DCYF must provide an annual account statement to the person and notified parties.
- When placement ends, DCYF must work to transfer representative payee responsibility to the legally responsible person or the individual (or guardian if needed).
- Financial literacy training
- DCYF must develop and provide financial literacy training (including information about public benefits) to persons exiting care who are over 14, receiving or likely eligible for benefits, and likely able to participate in managing payments.
- Amendments to RCW 74.13.060 (custodial funds)
- Confirms secretary/DCYF as custodian of funds, authorizes disbursement for personal needs, and requires conservation of funds in savings/investment accounts as directed in the new section.
- Raises the threshold for depositing an individual’s funds into a savings/investment account from $500 to $2,000.
- Requires release of funds and accounting when placement and public assistance end or upon appointment of a guardian.
Who is affected
- Primary: youth and children in DCYF care (dependency under RCW 13.34) and juvenile rehabilitation cases (RCW 13.40).
- DCYF (administration, caseworkers) — new screening, application, accounting, and training duties.
- Caregivers, parents, legal guardians, and parties to dependency proceedings.
- Social Security Administration and developmental disabilities administration (coordination on representative payees and Medicaid waiver access).
- State budget — reduced reimbursements to the state from benefits previously applied against cost of care (phase-in and 2028 expansion subject to appropriations).
Timeline and current status (select actions)
- Introduced: Jan 24, 2025.
- Referred to Senate Human Services; substitute bill adopted by Human Services and referred to Ways & Means.
- Senate Ways & Means: Majority do pass 1st substitute (Feb 28, 2025); referred to Rules.
- Placed on second reading by Rules Committee; Rules "X" file (Mar 17, 2025).
- Note: the prohibition expansion to all ages in 2028 is subject to legislative appropriation.
Potential impacts and considerations
- Improves financial stability and autonomy for youth in care by preserving SSI/RSDI benefits for their personal use and future savings.
- Administrative workload increase for DCYF (ongoing screening, benefit applications, account management, annual statements, training).
- Fiscal impact to state: reduced ability to recoup cost of care from benefits (phased and subject to appropriation for full coverage).
- Legal/operational coordination required with SSA (representative payee rules) and Medicaid waiver eligibility (exceptions allowed to permit waiver access).
