TN 1 (10-07)
PR 07210.001 Alabama
A. PR 08-003 Effect of Alabama Child Support Order on Child's Title II Benefits Number Holder - John C. F~
DATE: October 3, 2007
A parent acting as representative payee for his child(ren) may not use his child's Social Security Title II benefits to satisfy his court-ordered child support obligation.
You asked whether a father, who had been acting as a representative payee for his children's monthly Title II benefits payable under his Social Security account, could use the children's benefits to satisfy his court-ordered child support obligation.
For the reasons stated below, we believe that a father acting as the representative payee may not use his children's Social Security Title II benefits to satisfy his court-ordered child support obligation.
John F~, the number holder (NH), filed an application for disability benefits on September 15, 2002, and was found entitled to benefits beginning August 2002. NH has two minor children who were found entitled to receive benefits under his account number. Approximately two years ago, NH's wife, the children's mother, moved out of the family home taking the two children with her. According to the information you provided, NH continued to receive the children's benefits as the representative payee for his two children after his estranged wife and children left the household. Recently, NH's wife filed for divorce and claimed that NH was not providing support for his children. This claim apparently included an allegation that NH, as the children's representative payee, did not use the Social Security children's benefits on the children's behalf during the two years he and his wife were estranged. It is our understanding that Social Security's Birmingham, Alabama Field Office (SSA) sent NH an accounting form, which he has not yet completed and returned.
The Alabama Circuit Court, hearing the divorce action, issued a pendente lite relief order specifying the amounts and type of support NH is required to provide to his children. SSA has not received a copy of that order. A search of SSA's computer system shows that the children's mother is currently listed as the representative payee, but the system does not show when this change took place. NH's attorney in the divorce matter contacted SSA on August 3, 2007, claiming NH has been in compliance with the Court's pendente lite support order and asking, "What information do[es SSA] need from us to counter the claims of Mrs. F~?"
A person who meets the criteria outlined in section 202(d)(1) of the Social Security Act (Act) is entitled to receive child's benefits on the earnings record of an insured individual, and those benefits are considered the property of the qualifying person or "child," and not of the insured individual. See Act § 202(d)(1), 42 U.S.C. § 402(d)(1); 20 C.F.R. § 404.350 (2007) (entitlement lies with the qualifying individual). When a representative payee is appointed to administer the child's benefits, the representative payee has a duty to use the money received only for the child's use and benefit, in the child's best interests. See Act § 205(j)(1)(A), 42 U.S.C. § 405(j)(1)(A); 20 C.F.R. §§ 404.2035(a), 404.2040 (2007). This duty is inherent to the appointment as a representative payee and exists independently of any court-ordered obligation the representative payee may be under. See Act § 205(j)(1)(A); 20 C.F.R. §§ 404.2035, 404.2040. The representative payee also has a duty to keep any benefits received on the child's behalf separate from the representative payee's own funds and to treat any interest earned on the benefits as the child's property, not the representative payee's property. See 20 C.F.R. § 404.2035(b), (c). Thus, the Act and implementing regulations governing representative payees do not allow a representative payee to dispense a beneficiary's benefits in any manner other than on behalf of the beneficiary and in the beneficiary's best interest. See Act § 205(j)(1)(A); 20 C.F.R. § 404.2035(a); see also 20 C.F.R. § 404.2050 (2007) (stating a new representative payee will be selected when the representative payee has not used benefit payments in accordance with the regulations) . Using the child's benefits to satisfy the representative payee's debts would not be a proper use of the child's benefits. See Act § 205(j)(1)(A)(iv)(II); see also 20 C.F.R. § 404.2050.
In the present case, NH may not use the children's benefits to satisfy his child support obligation because those funds are not his property. The benefits belong to the children and may not be used by NH for his personal use, in this case to satisfy his personal legal obligation. See Act § 205(j)(1)(A); 20 C.F.R. § 404.2035(a); see also 20 C.F.R. § 404.2050. Because it appears that NH is no longer the representative payee for the children, the question of his control of ongoing benefit payments is not at issue. However, any children's benefits that NH received and/or accumulated during the two year period leading up to the divorce action, during which time his wife and children maintained a separate household, likewise may not be used to satisfy NH's obligation to pay child support. Any such accumulated funds do not belong to NH. Rather, they are the property of the children and should have been transferred to the children's new representative payee. See 20 C.F.R § 404.350; see also 20 C.F.R. § 404.2060 ("A representative payee who has conserved or invested benefit payments shall transfer these funds, and the interest earned from the invested funds, to either a successor payee or to us, as we will specify."). As that money already belongs to the children, NH is not at liberty to use the money to satisfy his obligation to pay support to the children. Any such arrangement is akin to a conversion of the children's property to pay a debt owed to the children. See v. Abercrombie, 816 So. 2d 1051, 1056 (Ala. Civ. App. 2001) (recognizing the problem of a child support arrangement that "would, essentially, require the child to repay the custodial parent's debt").
NH apparently intends to argue to the Circuit Court that in acting as the representative payee for the children's Social Security benefits, he was, in fact, supporting his children, thus satisfying the Court's order. However, as the representative payee for the children, NH's duty was to use the children's benefits, their own property, on their behalf for their use and benefit. See 20 C.F.R. §§ 404.2035(a), 404.2040. The Circuit Court's order, requiring NH to pay child support, did not alter or affect NH's pre-existing responsibilities as the children's representative payee. Rather, the Court's order created a different obligation, namely for NH to provide support to his children. However, the duties of a representative payee are distinct and separate from the duties of a parent ordered to pay child support. As a representative payee, NH was required to administer the benefits belonging to his children for their benefit. See 20 C.F.R. §§ 404.2035(a), 404.2040. As a father ordered to pay child support, NH is required to pay money to support his children. These obligations are distinctly different and the satisfaction of one does not satisfy the other.
NH's position raises other concerns. Under Alabama law a child has a fundamental right to support from his or her parents that the parents themselves cannot waive. See State ex rel. Shellhouse v. Bentley, 666 So. 2d 517 (Ala. Civ. App. 1995). "All minor children have a fundamental right to parental support and that right is deemed to be a continuing right until the age of majority." Ex parte State ex rel. Summerlin, 634 So. 2d 539, 541 (Ala. 1993); see also Bank Independent v. Coats, 591 So. 2d 56, 60 (Ala. 1991) ("[T]he public policy of this state [provides] that parents cannot abrogate their responsibilities to their minor children by mutual agreement between themselves so as to deprive their minor children of the support to which they are legally entitled."). Allowing NH to avoid his obligation to pay child support by using the children's own property to satisfy the Court's order would have the effect of "depriv[ing] the minor children of the support to which they are legally entitled." Coats, 591 So. 2d at 60.
Of course, the Circuit Court has the power to adjust or off-set NH's child support obligation as it sees fit, and NH is free to petition the Court to that effect. See Binns v. Maddox, 327 So. 2d 726, 728 (Ala. Civ. App. 1976) (the purpose of a child support order has been accomplished where Social Security disability benefits, which constitute a substitute for the income of the disabled parent, are paid to a child because of his parent's disability); Self v. Self, 682 So. 2d 732, 733-34 (Ala. Civ. App. 1996) (a credit was given for disability benefits paid because of the support-paying parent's disability). Whether the Court chooses to reduce NH's child support obligation or consider it satisfied based on the children's assets, including their Social Security benefits, is a matter for the Court to decide. However, any such determination by the Circuit Court necessarily relates to NH's obligation as a parent to pay child support, and not to any duties or responsibilities he had as the representative payee for the children's Social Security benefits. See Act § 205(j)(1)(A); 20 C.F.R. §§ 404.2035, 404.2040; see also 20 C.F.R. § 404.2050. Moreover, the Act establishes that benefits paid or payable shall not be subject to legal process. See Act § 207(a), 42 U.S.C. § 407(a); Philpott v. Essex County Welfare Bd., 409 U.S. 413 (1973). Thus, although the Court may be able to alter NH's child support obligation, the Court has no authority over the Title II benefits the children received or will receive in the future.
The Court's determinations in the divorce action will not alter the fact that the children's benefits, even though they are payable on NH's account, are the children's property, not NH's property, and at all times should have been used by the representative payee for the children's benefit and on the children's behalf. See 20 C.F.R. §§ 404.350, 404.2035, 404.2040. It is our understanding that to this end, SSA has asked for an accounting from NH regarding the disposition of the children's benefits paid during the two year period when the children were living in a different household with their mother. See 20 C.F.R. §§ 404.2035(e), 404.2065 (2007). We presume appropriate measures will be taken should SSA determine NH misused the children's benefits in this case. See 20 C.F.R. § 404.2041 (2007).
For the foregoing reasons, we conclude that NH, acting as the representative payee for his children, may not use his children's Social Security Title II benefits to satisfy his court-ordered child support obligation.
Mary A. S~
Regional Chief Counsel
Richard V. B~
Assistant Regional Counsel