This Regional Chief Counsel (RCC) opinion examines whether an Indiana state court can direct the use of Social Security benefits. The RCC concludes “the federal government is immune to the orders of state courts, unless it has consented to submit itself to the jurisdiction of the court” and “under the Social Security Act, Social Security benefits are not transferable, assignable, or subject to legal process, including court orders.” The RCC also noted, “SSA has the authority to appoint a party to serve as a representative payee to receive Social Security benefits on a beneficiary’s behalf, if the Agency determines it is in the interest of the beneficiary.”

QUESTION PRESENTED

You asked us whether an Indiana state court can direct the use of C~ Social Security benefits. The court ordered the Social Security Administration (SSA) to forward benefits directly to Harbour Manor Health & Living Community (Harbour Manor), to whom Ms.D~ is purportedly indebted. In addition, you are seeking our assistance in providing appropriate language for a letter responding to R~, Harbour Manor’s attorney, as to the forwarding of benefits for the purposes of satisfying Ms. D~ debt.

SHORT ANSWER

The Indiana state court lacked the authority to issue this order, and SSA’s compliance would violate the provision of the Social Security Act prohibiting the assignment of benefits.

BACKGROUND

Ms. D~ lives at Harbour Manor, a nursing home. On June 1, 2020, a magistrate of the Hamilton County (Indiana) Superior Court granted a motion for default judgment against Ms. D~ and in favor of Harbour Manor. The court also granted Harbour Manor’s request to establish a “Constructive Trust” for Ms. D~ during her residency at Harbour Manor’s facility. Finally, the court issued an order directing SSA to “forward” Ms. D~ monthly Social Security benefits directly to Harbour Manor.

In an email dated August 3, 2020, Attorney R~ explained that SSA currently sends benefits to Ms. D~. According to Attorney R~, Ms. D~ does not “turn the money over to pay her portion of her nursing home bill,” which, in turn, “causes the account balance to increase monthly.” Attorney R~ asked SSA to comply with the court order.

DISCUSSION

As a preliminary matter, the federal government, as sovereign, is immune to suits and court orders unless it has consented to submit itself to the jurisdiction of the court. See U.S. Const. art. VI, cl. 2; Hercules Inc. v. United States, 516 U.S. 417, 422–23 (1996); United States v. Kentucky, 252 F.3d 816, 825 (6th Cir. 2001). SSA, a federal agency, has not relinquished its sovereignty and has not submitted to the jurisdiction of the Indiana state courts. Accordingly, SSA is not bound by the Hamilton County Superior Court’s June 2020 order or any other order that this court might subsequently issue.

Moreover, the Hamilton County Superior Court cannot direct the use of Ms. D~ Social Security benefits. Under Section 207 of the Social Security Act, Social Security benefits are not transferable or assignable, and they are not subject to any legal process, including court orders.[1] See 42 U.S.C. § 407(a); Wash. Dep’t of Soc. & Health Servs. v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003); see also Program Operations Manual System (POMS) GN 02410.001. Section 207 states the following:

The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.

42 U.S.C. § 407(a).

Section 207’s anti-assignment provision thus constitutes a “broad bar against the use of any legal process to reach” Social Security benefits and is intended to shield benefits from attempts to alienate them. See Philpott v. Essex Cnty. Welfare Bd., 409 U.S. 413, 416–17 (1973).

In theory, the only permissible way to achieve the result intended by the court—i.e., having Ms. D~ benefits sent directly to Harbour Manor—would be if Harbour Manor were Ms. D~ representative payee. However, only SSA has the authority to appoint a party to serve as a representative payee to receive Social Security benefits on a beneficiary’s behalf and to determine how those benefits should be managed. See 42 U.S.C. § 405(j); 20 C.F.R. §§ 404.2001–404.2065. In this case, SSA has not appointed Harbour Manor or any other party to serve as Ms. D~ representative payee, and no state court has the power to appoint one. Nevertheless, in light of the issue that has arisen regarding Ms. D~ purported nonpayment of her nursing home bill, the resident field office may wish to consider whether it would be appropriate to make a capability determination and evaluate whether the designation of a representative payee is warranted. See POMS GN 00501.015 (“The field office (FO) is responsible for developing, investigating, and deciding all ‘representative payee (payee)’ matters.”), GN 00502.001.

In sum, the Hamilton County Superior Court’s order requiring SSA to direct Ms. D~ benefits to Harbour Manor constitutes an improper exercise of legal process with respect to Social Security benefits. Therefore, the portion of the court order concerning Ms. D~ Social Security benefits is invalid as contrary to controlling federal law, and SSA is not required to comply. Harbour Manor is not entitled to any portion of Ms. D~ Social Security Benefits, as it is not Ms. D~ representative payee.

CONCLUSION

For the reasons discussed above, we conclude that the Hamilton Superior Court’s June 2020 order cannot override controlling federal law. The court order impermissibly attempts to direct the disposition of Ms. D~ Social Security benefits, in violation of 42 U.S.C. § 407. If you have any further questions concerning this matter, please contact E~ at

[1] Although federal law carves out several exceptions to Section 207’s anti-assignment provision, none of those exceptions applies to this matter. See POMS GN 02410.001(B) (referring to exceptions to Section 207 for garnishment of benefit payments for child support, alimony, and victim restitution, and for levy for unpaid federal taxes).

SSI payments cannot be garnished since they are not considered to be remuneration for employment.

The Social Security Act states that moneys, due from a United States government agency to an individual, shall be subject, in a manner as if the United States government agency were a private person, to state laws enacted to enforce the legal obligation of an individual to provide child support. 42 U.S.C. § 659(a). Thus, Mr. W~' benefits are subject to Louisiana laws governing child support garnishment orders.

This is with reference to your April 3, 1995 order garnishing Robert S~ Social Security "S.S.I. benefit" in the amount of $78 per month. S.S.I. or Supplemental Security Income benefits under Title XVI of the Social Security Act cannot be garnished for the reasons that follow.

Section 207 of the Social Security Act, 42 U.S.C. § 407 protects Title II disability benefits from garnishment and other legal process.

(a) [N]one of the moneys paid or payable ... under this title [title II] shall be subject to execution, levy, attachment, garnishment, or other legal process....

(b) No other provision of law, enacted before, on, or after the date of the enactment of this section may be construed to limit, supersede, or otherwise modify the provisions of this section except to the extent that it does so by express reference to this section. 42 U.S.C. § 407.

Congress extended the same protection to SSI benefits when it created the SSI program in title XVI. 42 U.S.C. § 1381(d)(1) (the provisions of section 207 ... shall apply with respect to this part to the same extent as they apply in the case of title II.

As part of the Child Support Enforcement Act of 1975, Congress enacted a limited waiver of the section 207 protection to allow garnishment of certain payments or benefits under the Social Security Act to enforce child support and alimony obligations. That enactment, section 459(a) of the Social Security Act, 42 U.S.C. § 407, provides as follows:

Notwithstanding any other provision of law (including section 207), effective January 1, 1975, moneys (the entitlement to which is based upon remuneration for employment) due from, or payable by, the United States ... to any individual ... shall be subject, in like manner and to the same extent as if the United States ... were a private person, to legal process brought for the enforcement, against such individual of his legal obligations to provide child support or make alimony payments.

Effective September 3, 1991, the Office of Personnel Management amended its regulations to clarify that SSI benefits are not "remuneration for employment" and, therefore, are not subject to garnishment for child support and alimony. See 56 Fed. Reg. 36723 (August 1, 1991)(adding subsection (k) to 5 C.F.R. § 581.104). This clarification made explicit what was already implicit in the statute and regulations. Section 462(f) of the Act defines "remuneration for employment" to include "compensation paid or payable for personal services of the individual, whether such compensation is denominated as wages, salary, commission, bonus, pay, or otherwise, and includes but is not limited to severance pay, sick pay, and incentive way...." 42 U.S.C. § 662(f)(1). See also 5 C.F.R. §§ 581.103, 581.104. The definition specifically includes title II disability insurance benefits, 42 U.S.C. § 662(f)(2), but not SSI benefits. Additionally, the regulations authorize withholding child support obligations from disability insurance benefits but do not authorize withholding child support obligations from SSI. Compare 20 C.F.R. § 404.1820(b) with C.F.R. § 416.533.

As several state courts have recognized, SSI is a form of public assistance which has nothing to do with the earnings the recipient may have had. Tennessee Dept. of Human Services v. Charles, 802 S.W.2d 594, 597 (Tenn. 1990); Becker County Human Services v. Peppel, 493 N.W.2d 573, 574 (Minn. App. 1992). SSI provides a guaranteed minimum income for needy aged, blind and disabled individuals. See Schweiker v. Wilson, 450 U.S. 221, 224 (1981). As such, SSI is essentially a "safety net" to protect indigent persons. Tennessee, supra; Becker County, supra. This distinguishes SSI benefits from title II disability benefits, which are subject to garnishment for child support. "SSI was created to benefit persons who are entitled to little or not income from Social Security disability benefits." Tennessee, supra, citing S.Rep. No. 1230, 92d Cong., 2d Sess. 12, 13. See also Langlois v. Langlois, 441 N.W.2d 286, 299 (Wis. App. 1989)(SSI benefits are "exempt from every process and inalienable," and, therefore, "cannot be burdened by a child support order"); Moore v. Sharp, 143 A.D.2d 541, 532 N.Y.S.2d 811, 812 (N.Y. App. Div. 1988)(citing the subsistence nature of SSI income in finding a child support order against an SSI recipient improper).

I discussed with the Social Security Administration's concern with plaintiff's counsel on August 21, 1995. Counsel had no objection to the words "social security disability" being substituted for "S.S.I." in findings 4 and 7 as well as order entry 3. Likewise, he did not object to "social security" being substituted for "S.S.I." in findings 5 and order entry 1. The Social Security Administration will expeditiously implement any revised order incorporating these changes. The suggested changes have been marked in the enclosed April 3, 1995 order.

Very Truly Yours,

Thomas W. C~

Regional Chief Counsel

By: ___________________________

Edward L. K~ Assistant Regional Counsel