Court of Appeals rules in favor of foster child and against DSS

November 6, 2007 Media Release

(Greensboro, NC) – The NC Court of Appeals today ruled that District Court Judge Susan Bray has the jurisdiction to order the NC Department of Social Services (DSS) to use a foster child’s Social Security income to pay his mortgage.

“The ruling saves the foster child’s house from a threatened foreclosure that may have rendered him homeless when he turns 18 years old,” said Lewis Pitts, an attorney with Legal Aid of North Carolina and one of the attorneys for the 16-year-old foster child, known as “John G.”  “Obviously, it is in the best interest of the child that the property not be foreclosed and that the asset be preserved for the child's future.”

John G has been in the legal custody of Guilford County Department of Social Services (DSS) since 2004.  As his guardian, DSS became payee of John G’s Social Security Benefits of $538 per month.  Although DSS was bound by law to use the funds in the best interest of John G, DSS refused to use the money to pay the $220 monthly mortgage payment on a Habitat House being held in trust for the child. 

Instead, DSS opted to retain the money to help pay its costs of providing care for the child.

When foreclose was imminent, the child’s Guardian ad Litem attorneys filed a motion asking Judge Bray to order DSS to act in the best interest of the child and use his Social Security monthly check to pay the mortgage.  Judge Bray granted the motion, but DSS appealed the decision. 

DSS claimed that no District Court Judge had subject matter jurisdiction to order how they, as payee, use the Social Security benefit funds.  DSS argued that John G. needed to bring a federal lawsuit to complain about the misuse of his funds by the payee.

The Court of Appeals rejected the DSS arguments and said that “n
othing in the concept of our federal system prevents state courts from enforcing rights created by federal law.”  The Court’s decision also stated that DSS’s “interpretation of [the federal statute] takes the statue out of context and is an improper attempt to fashion a shield into a sword to be used against the intended beneficiary of the law….”

Effectively, the Court of Appeals affirmed Judge Bray’s ruling that DSS use John G’s social security benefit money to pay the monthly mortgage on the Habitat House.

“We agree wholeheartedly with DSS that their budget is inadequate to properly serve foster children,” said Pitts.  “But the solution is not to use their power and position of trust as payee to steal for their own organizational needs money from abused and neglected children.

“These children have many needs, including clothing, educational supplies, and recreational, for which the funds should be used.  DSS needs to raise public awareness about their budgetary nightmares, not create nightmares and deprivation by pocketing the children’s money.”

The practice of DSS asking to be payee for foster children’s Social Security Benefits and then pocketing the money as repayment for costs of care is a statewide and national problem.   When the John G. case was first unfolding  in 2006, the New York Times ran a front page story about the child and his plight.  [See 02/17/06 New York Times article, "
Welfare Agencies Seek Foster Children's Assets"]

“Because this ruling is so clear and so strong, Guardian Ad Litem advocates for foster children all around the state should be able to get District Judges to halt DSS use of the funds that are not in the child’s best interest,” Pitts concluded.  “Now we should all work to ensure adequate legislative funding for all services for children and take away the incentive for DSS to misuse the funds rightfully belonging to the children.”

Legal Aid of North Carolina (LANC) is a statewide, nonprofit law firm that provides free legal services in civil matters to eligible, low-income people in all 100 counties in North Carolina through 24, geographically located offices in North Carolina.  LANC’s clients typically have an annual income of 125% or less of the federally established poverty levels. 

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NC Court of Appeals decision, No. COA06-752, November 6, 2007
(pdf document)

Lewis Pitts (Senior Managing Attorney, Legal Aid of NC,
Advocates for Children’s Services), Durham, NC

George R. Hausen (
Executive Director, Legal Aid of NC),
, NC


Dock Kornegay (Director, Public Relations & Development,
Legal Aid of NC), Raleigh, NC,



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Legal Aid of North Carolina is a statewide, nonprofit law firm that provides free legal services in civil matters to low-income people in order to ensure equal access to justice and to remove legal barriers to economic opportunity.

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