Basic (04-05)

PR 07211.025 Michigan

A. PR 10-080 SSI – Michigan – Review of Probate Court Decree Directing Payment of Child’s Benefits for Brianna E~ Case No. 609473; Our Ref. PLNL 10-0068-ncs

DATE: April 2, 2010

1. SYLLABUS

State courts lack the authority and the jurisdiction to designate a representative payee for purposes of the Social Security Act, or to direct the disposition of benefits certified to a representative payee. Only the Social Security Administration has the discretion and authority to designate, change, and enforce the duties of a representative payee.

2. OPINION

You asked us to review an order issued by the Wayne County (Michigan) Probate Court, and provide appropriate language with which to respond, if necessary, to the court. SSA is not a party to the order, but the court order involves auxiliary benefits that SSA owes to Brianna E~, a minor child, and directs SSA to pay the benefits to Carol M~, the attorney and conservator for Brianna’s mother, Theresa E~. Neither Ms. M~ nor Theresa E~ is Brianna’s representative payee.

We have concluded that the Michigan court lacked authority to issue this order. However, after consulting with the Office of Program Law in Baltimore and the Department of Justice, we have determined that sending a letter directly to the court would be inadvisable. Instead, we have attached proposed language that can be used in letters to Cheryl H~, the representative payee, and to Ms. M~. Below we explain the basis for that proposed language. Please note that the state court has scheduled a hearing in this case for April 8, 2010. We recommend that the letters be sent as soon as possible, so that the representative payee will be able to consult her attorney before the hearing. We also note that if you are concerned that Ms. H~ will not use the funds properly, you could consider appointing a different representative payee prior to paying the back benefits.

BACKGROUND

In 2009, Cheryl A. H~ filed an application for auxiliary benefits on behalf of Brianna E~, a minor (born 1993). On the application, Ms. H~ listed herself as Brianna’s proposed representative payee. On October 9, 2009, SSA determined that Brianna was entitled to auxiliary benefits beginning in September 2007. The award meant that SSA owed Brianna back-benefits in the amount of $22,297.00. Brianna’s parents, Theresa E~ and Timmy E~, are apparently separated. Effective November 2009, SSA named Cheryl H~ as Brianna’s representative payee. Court records indicate that Cheryl and Sandra H~ were appointed as Brianna’s temporary guardians in September 2009 (Wayne County (Michigan) Probate Court, Case No. 2009-745625-GM, filed July 21, 2009). SSA was listed as an “interested person” in the case, although it is not clear whether or how SSA was notified of the proceedings. The guardianship apparently has not been made permanent; the case remains open and a hearing is scheduled for April 8, 2010. As of the date of this memorandum, Cheryl H~ continues to serve as Brianna’s representative payee.

On December 22, 2009, Judge Cathy B. M~ of the Wayne County (Michigan) Probate Court issued an order (Order) directing SSA to pay $22,297 owed to Brianna “to Carol M~ as conservator for Theresa M~.” The order further directed that Ms. M~ “pay guardian Cheryl H~ pro rata support for each day/month she was the custodial guardian from the lump sum received.” Court records show that Judge M~ appointed Ms. M~ as Theresa’s conservator on February 12, 2009, based on a petition brought by Paul H~ (Wayne County Probate Court, Case No. 2009-739054-CA). It is not clear whether the conservatorship is permanent; the case remains open on Judge M~’s docket. The case docket lists Sandie H~, Brianna E~, Emily E~ , and SSA as interested persons in the case.

On December 23, 2009, Ms. M~ faxed a letter, with a copy of the Order, to the Livonia, Michigan field office. The letter stated that before Judge M~ issued the Order, she heard testimony from Timmy and Theresa E~, and from Ms. H~, who was also represented by attorney Christopher K~. The letter stated that Theresa E~ had asked Ms. M~, as her conservator, “to obtain the funds and disburse the appropriate month’s support to Cheryl H~ as [Brianna’s] current guardian,” and that all the parties agreed to the Order.

DISCUSSION

I. SSA appoints representative payees and prescribes their duties.

Congress granted the power to determine who should manage a beneficiary’s benefits and how they should be managed to the Commissioner. 42 U.S.C.§ 405(j). That power includes the right to appoint or remove a representative payee, and the right to direct the representative payee on matters relating to benefits that the payee manages. Id.; 20 C.F.R. §§ 404.2025, 404.2035, 404.2040, 404.2045, 404.2050. 404.2065. SSA generally appoints and pays benefits to a representative payee when a beneficiary is under the age of 18, and thus presumed unable to manage or direct the management of benefits payments due to youth. 20 C.F.R. §§ 404.2001(a), 404.2010(2)(b). SSA’s first preference in selecting a representative payee for a minor child is a natural or adoptive parent who has custody of the beneficiary. 20 C.F.R. §§ 404.2020, 404.2021(c)(1). Before appointing a representative payee, SSA performs an investigation of the prospective payee. 20 C.F.R. § 404.2024.

Once appointed, a representative payee has a responsibility to use the benefits received on the beneficiary’s behalf only in a manner and for the purpose she determines to be in the beneficiary’s best interest. 20 C.F.R. § 404.2035(a) (directing the use of benefits by a representative payee). SSA considers that payments certified to a representative payee have been used for the use and benefit of the beneficiary if they are used for the beneficiary’s current maintenance, which includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items. 20 C.F.R. § 404.2040(a)(1) (specifying how a representative payee should use the beneficiary’s benefits). Benefits may not be used to support the beneficiary’s parent unless the parent is legally dependent on the beneficiary. 20 C.F.R. § 404.2040(c). A payee may not be required to use benefit payments to satisfy a debt that arose prior to the first month for which payments are certified to a payee. 20 C.F.R. § 404.2040(d). A payee may satisfy a debt that arose prior to the date of the first payment “only if the current and reasonably foreseeable needs of the beneficiary are met.” 20 C.F.R. § 404.2040(d). After the payee has used the benefit payments for current maintenance, any remaining amount must be conserved or invested on behalf of the beneficiary. 20 C.F.R. § 404.2045(a) (directing the investment of conserved funds by a representative payee). The payee must invest the funds in accordance with the rules followed by trustees, and must show that she is holding the property in trust for the beneficiary. 20 C.F.R. § 404.2045(a).

The representative payee must keep the benefits separate from her own funds, and show that the beneficiary is the owner of the benefits. 20 C.F.R. § 404.2035(b). SSA requires the payee to provide written reports at least once a year accounting for the payee’s use of the benefit payments. 20 C.F.R. §§ 404.2025, 404.2035(e), 404.2065. The payee must keep records of how the benefits were used, and make all supporting records available upon SSA’s request. 20 C.F.R. §§ 404.2035(e), 404.2065. The records must include where the beneficiary lived during the accounting period; who made the decisions on how the benefits were spent or saved; how the benefit payments were used; and how much of the benefit payments were saved or invested. 20 C.F.R. § 404.2065(a)-(d). The payee must notify SSA of any event or change that affects the amount of benefits the beneficiary may receive, or how the beneficiary receives those benefits. 20 C.F.R. § 404.2035(d). The payee must also notify SSA of any change in her circumstances that affect the performance of her payee responsibilities. 20 C.F.R. § 404.2035(f). SSA may select a new representative payee if it determines that a payee is not longer able or willing to carry out payee responsibilities. 20 C.F.R. § 404.2050. If SSA determines that the payee has not used the benefit payments or carried out her responsibilities in accordance with SSA guidelines; is unable to manage the benefit payments; or has failed to cooperate in providing SSA with information about her actions as payee, SSA will promptly terminate payment of benefits to the payee and find a new payee. 20 C.F.R. § 404.2050(b)-(c), (f). If SSA determines that the payee misused the benefit payments, she may responsible for paying back those benefits. 20 C.F.R. § 404.2041(a).

II. Michigan courts do not have jurisdiction over SSA. As an initial matter, it is well established that SSA is not bound by a state court order, because the Michigan Circuit Court lacks jurisdiction over SSA under the Supremacy Clause of the United States Constitution and the doctrine of sovereign immunity. United States Const. Art. VI, clause 2; Hercules Inc. v. United States, 516 U.S. 417, 422-23 (1996); United States v. Commonwealth of Kentucky, 252 F.3d 816, 825 (6th Cir. 2001); see also Commonwealth of Puerto Rico v. United States, 490 F.3d 50, 61 (1st Cir. 2007). The limited waiver of sovereign immunity in the Social Security Act, which is strictly construed in SSA’s favor, is unambiguously limited to individuals who have exhausted their administrative appeals remedies. 42 U.S.C. § 405(g; United States v. Mitchell, 445 U.S. 535, 538-39 (1980); Block v. North Dakota, 461 U.S. 273, 287 (1983). SSA has not relinquished its sovereignty and has not submitted to the jurisdiction of the Michigan courts. As a result, the Michigan Circuit Court cannot override the Agency’s regulations.

III. The Commissioner determines who should manage a beneficiary’s benefits and how those benefits should be managed. Even if the Michigan court had authority over SSA in general, it cannot direct SSA with respect to the payment of benefits to a particular representative payee. Congress granted the power to determine who should manage a beneficiary’s benefits and how they should be managed to the Commissioner. 42 U.S.C.§ 405(j). As described in Part I above, that power includes the right to appoint or remove a representative payee, and the right to direct the representative payee as to her responsibilities. Id. As explained in Part II above, SSA has not relinquished its sovereignty or submitted to the jurisdiction of state courts. Consequently, state courts lack the authority and the jurisdiction to designate a representative payee for purposes of the Social Security Act, or to direct the disposition of benefits certified to a representative payee. Only the Social Security Administration has the discretion and authority to designate, change, and enforce the duties of a representative payee. 42 U.S.C. § 1383(a)(2); 20 C.F.R. §§ 404.2001-404.2065; Kriegbaum v. Katz, 909 F.2d 70, 74 (2d Cir. 1990); McGrath v. Weinberger, 541 F.2d 249 (10th Cir. 1976).

In addition, the Act protects a beneficiary’s right to receive Social Security by prohibiting the assignment or attachment of benefits:

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

42 U.S.C. §§ 407(a), 1383(d)(1). “Legal process” means any “judicial or quasi-judicial mechanism . . . by which control over property passes from one person to another[.]” Washington Dep’t of Social and Health Services v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003). That includes court orders. POMS GN 02410.001. The anti-assignment provision thus constitutes a “broad bar against the use of any legal process to reach all social security benefits,” and is intended to protect the rights and benefits from all attempts to use legal process to alienate them, unless Congress has specifically indicated otherwise. Philpott v. Essex County Welfare Board, 409 U.S. 413, 417 (1973).

For these reasons, the Michigan Circuit Court cannot override the Agency’s regulations regarding the appointment of Brianna’s representative payee, and how that representative payee should manage her benefits. By issuing the Order, the state court has assumed authority to decide who shall manage Brianna’s benefits, and how they shall be managed, a power the Congress has granted exclusively to the Commissioner. Cheryl H~ is Brianna’s representative payee, with a fiduciary duty to Brianna, including a duty to use Brianna’s benefits in Brianna’s best interest. Ms. M~ is not and never has been named as Brianna’s representative payee. Indeed, under Michigan law, a conservator is a fiduciary, subject to the same obligations and standards of care as a trustee, including a duty of undivided loyalty. Mich. Comp. Laws §§ 700.1104(e), 700.1212(a), 700.5416; In re Gierman, No. 288264, 2010 WL 866146 at *2 (Mich. App. Ct. March 11, 2010); In re Estate of Graves, No. 286674, ___ N.E.2d ___, 2009 WL 4725753 (Mich. App. Ct. Dec. 3, 2009). Thus, Ms. M~ has a fiduciary duty to Theresa E~, including a duty of undivided loyalty to Theresa, and a duty to act in Theresa’s best interest. This stands in contrast to, and potentially in conflict with, Ms. H~’s fiduciary duty to Brianna. The state court’s judgment constitutes a legal process assigning control of Brianna’s benefits to someone other than the representative payee, which is prohibited by statute. Thus, even if the court’s direction of the benefits were intended to benefit Brianna – and the language of the order suggests that it may have been intended to benefit Theresa rather than Brianna – it is still invalid, because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing how and to whom benefits will be paid.

Moreover, to the extent that Ms. H~ complied with the Order, she would probably violate her responsibilities as Brianna’s representative payee. By agreeing to hand over the lump sum back benefits to Ms. M~, Ms. H~ would not be able to control how Ms. M~ spends or conserves the auxiliary benefits, and would be unable to fulfill her reporting requirements as Brianna’s representative payee. Moreover, even if Ms. H~ retained control of Brianna’s benefits, it is not clear whether it would be consistent with Ms. H~’s fiduciary duty to reimburse Theresa E~ for support provided to Brianna prior November 2009, when the first payment of Brianna’s benefits was certified to Ms. H~ as representative payee. As stated above, under SSA regulations, a payee may not be required to use benefit payments to satisfy an obligation that arose prior to the first month for which payments are certified to a payee. 20 C.F.R. § 404.2040(d). A payee may satisfy a debt that arose prior to the date of the first payment “only if the current and reasonably foreseeable needs of the beneficiary are met.” 20 C.F.R. § 404.2040(d). The payee must also consider whether paying a debt, as opposed to conserving the benefits for the beneficiary’s future needs, is in the best interest of the beneficiary. Consequently, Ms. H~ would have to consider whether she is able to meet both Brianna’s present needs and Brianna’s reasonably foreseeable future needs before using any of the lump-sum back benefits to repay Theresa E~ for support provided prior to November 2009.

For these reasons, the Wayne County Probate Court cannot override the Agency’s regulations regarding the appointment of Brianna’s representative payee, and how that representative payee should manage her benefits. Because Carol M~ is not Brianna’s representative payee, the state court’s judgment constitutes a legal process assigning control of Brianna’s benefits to someone other than the representative payee, and would constitute a taking by judicial order of identifiable Social Security benefits. By issuing the judgment, the state court has assumed authority to decide who shall manage Brianna’s benefits, and how they shall be managed, a power the Congress has granted exclusively to the Commissioner. Thus, even if the court’s direction of the benefits is intended to benefit Brianna, it is still invalid, because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing how and to whom benefits will be paid.

CONCLUSION

The Wayne County Probate Court had no authority to direct SSA to pay Brianna’s benefits to Ms. M~. Moreover, Ms. H~ would probably violate her fiduciary duty to Brianna as her representative payee if she complied with the Order. This is particularly true because Ms. H~’s fiduciary duty, under the Act, is to Brianna; Ms. M~’s fiduciary duty is not to Brianna, but to Theresa. Sample letters to Carol M~ and to Cheryl H~ are attached to this opinion. We recommend that these letters be sent out as soon as possible, since there is a court hearing scheduled before Judge M~ on Thursday, April 8, 2010.

Donna L. C~
Regional Chief Counsel, Region V

By: ____________________________
Julie L. B~
Assistant Regional Counsel

Yours truly,

Social Security Administration

34010 Plymouth Road

Livonia, MI 48150

Date: April __, 2010

Carol A. M~ M~ & M~, P.C.

27840 Plymouth Road

Livonia, MI 48150-2325

Conservator for Theresa E~

Re: Case No. 2009-745625-GM,

(In re Guardianship of BE, a minor)

Dear Ms. M~:

The Social Security Administration (SSA) has received a copy of an order issued in the above-referenced case on December 22, 2009, as well as a cover letter from you, regarding $22,297 “from claim #002-xx-xxxx HC3.” The order directed SSA to pay the entire amount to you, as conservator for Theresa E~. The order also directed you to pay a pro rata share of the lump sum to Cheryl H~ for each day that Ms. H~ served as custodial guardian.

The Privacy Act, at 5 U.S.C. § 522a, prevents SSA from disclosing any information regarding any Social Security beneficiary without consent. However, without acknowledging that any of the parties to that order is entitled to receive any Social Security benefits, we must respectfully inform you that the Wayne County Probate Court lacks jurisdiction to direct the payment of any Social Security benefits. The Social Security Act and its implementing regulations give SSA, a federal agency, the sole authority to appoint a party to serve as the payee to receive benefits on behalf of a Social Security beneficiary and determine how those benefits should be managed. 42 U.S.C. §§ 405(j), 1383(a)(2); 20 C.F.R. §§ 404.2001-404.2065. Only SSA has the discretion and authority to designate, change, and enforce the duties of a representative payee.

In addition, the Social Security Act bars the use of any legal process, including court orders, to transfer control of Social Security benefits from one person to another, unless Congress has specifically indicated otherwise. 42 U.S.C. §§ 407(a), 1383(d)(1); Washington Dep’t of Social & Health Servs. v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003); POMS GN 02410.001. Congress has not indicated that state court orders may be used to transfer Social Security benefits in custody or guardianship cases, and SSA has not consented to submit itself to the jurisdiction of the Michigan courts. See United States v. Sherwood, 312 U.S. 584 (1941) (under the doctrine of sovereign immunity, federal agencies are immune to the orders of state courts unless the agency consents to jurisdiction). Consequently, the order of December 22, 2009 was invalid because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing the disposition of a beneficiary’s Social Security benefits or appointing any particular individual to receive or manage benefits on a beneficiary’s behalf.

This analysis would also apply to any future state court order that attempted to require or compel SSA or any representative payee appointed by SSA to use a beneficiary’s benefits in any particular manner, or to cede control over those benefits to another. Complying with any such order could cause the person appointed as representative payee to violate her fiduciary duty and responsibilities for managing benefits as established under the Social Security Act and its regulations. This duty, and the payee’s specific responsibilities for using and managing benefits, is not dependent on the payee having custody of the beneficiary. 20 C.F.R. §§ 404.2025, 404.2035, 404.2040. 404.2045. See also“A Guide for Representative Payees,” http://www.ssa.gov/pubs/10076.html.

I hope that the information in this letter answers any questions or concerns that you may have.

Yours truly,

Social Security Administration

34010 Plymouth Road

Livonia, MI 48150

Date: April __, 2010

Cheryl H~

[street] [town, MI zip]

Re: Representative Payment on behalf of Brianna E~

Dear Ms. H~:

The Social Security Administration (SSA) understands that Judge Cathie B. M~ of the Wayne County (Michigan) Probate Court issued an order on December 22, 2009 (Case No. 2009-745625-GM), ordering SSA to pay $22,297 in back benefits owed to Brianna E~, a minor for whom you serve as representative payee, to Carol M~, the conservator for Brianna’s mother Theresa. The Order also directs Ms. M~ to pay you “pro rata support” for the period during which you acted as Brianna’s custodial guardian. We want to inform you that SSA will not be honoring that order because the state court does not have jurisdiction over the payment of Social Security benefits. Rather, SSA will hold you responsible, as the appointed representative payee, for proper use of the benefits, irrespective of any state court order that purports to govern or direct the use of Brianna’s benefits.

State courts, including the Wayne County Probate Court, lack jurisdiction to direct the payment of Social Security benefits. The Social Security Act and its implementing regulations give SSA, a federal agency, the sole authority to appoint a party to serve as the payee to receive benefits on behalf of a Social Security beneficiary and determine how those benefits should be managed. 42 U.S.C. §§ 405(j), 1383(a)(2); 20 C.F.R. §§ 404.2001-404.2065. Only SSA has the discretion and authority to designate, change, and enforce the duties of a representative payee. In addition, the Social Security Act bars the use of any legal process, including court orders, to transfer control of Social Security benefits from one person to another, unless Congress has specifically indicated otherwise. 42 U.S.C. §§ 407(a), 1383(d)(1); Washington Dep’t of Social & Health Servs. v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003); POMS GN 02410.001. Congress has not indicated that state court orders may be used to transfer Social Security benefits in custody or guardianship cases, and SSA has not consented to submit itself to the jurisdiction of the Michigan courts. See United States v. Sherwood, 312 U.S. 584 (1941) (under the doctrine of sovereign immunity, federal agencies are immune to the orders of state courts unless the agency consents to jurisdiction). Consequently, even if the Wayne County Probate Court order of December 22, 2009 was intended to benefit a person receiving Social Security benefits, the judgment was invalid because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing the disposition of a beneficiary’s Social Security benefits or appointing any particular individual to receive or manage benefits on a beneficiary’s behalf. The same analysis would apply to any future state court order that attempted to direct the manner in which a beneficiary’s Social Security benefits are disposed. For these reasons, a state court cannot tell you how to use or manage Brianna’s benefits.

SSA has appointed you as Brianna’s representative payee, and certifies the payment of Brianna’s benefits to you. As a representative payee, you have a duty to use Brianna’s benefits only for Brianna’s best interests; to provide written reports to SSA accounting for your use of the benefit payments, to keep records of how the benefits were used, and to make those records available to SSA upon request. These duties are not contingent upon your having custody of Brianna. It appears that the terms of the December 22, 2009 Order could potentially conflict with your duties as Brianna’s representative payee under the Social Security Act.

A representative payee has a fiduciary duty to use the benefits in the beneficiary’s best interests, and in accordance with SSA regulations. 20 C.F.R. §§ 404.2025, 404.2035, 404.2040, 404.2045. This duty is not dependent on the payee having custody of the beneficiary. Social Security benefits belong at all times to the beneficiary, and not to the beneficiary’s parent or guardian. A representative payee must generally use payments certified to her for the beneficiary’s current maintenance, which includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items. 20 C.F.R. § 404.2040(a)(1). After the payee has used the benefit payments for current maintenance, any remaining amount must generally be conserved or invested on behalf of the beneficiary. 20 C.F.R. § 404.2045(a). Benefits may not be used to support the beneficiary’s parent unless the parent is legally dependent on the beneficiary. 20 C.F.R. § 404.2040(c). The payee must account to SSA for her use of the benefits; must make a written report to SSA once a year; and at SSA’s request must make available all supporting records showing where the beneficiary lived during the accounting period, who made the decisions on how the benefits were spent or saved, how the benefit were used, and how much was saved or invested. 20 C.F.R. §§ 404.2035(e), 404.2065(a)-(d).

Even when receiving a lump-sum payment of back benefits, the payee has an obligation to use the benefits first for the payee’s current needs, then make sure there are enough funds to care for reasonably foreseeable future needs, and always use the benefits in the beneficiary’s best interest. See “A Guide for Representative Payees,” http://www.ssa.gov/pubs/10076.html. Under SSA’s regulations, a payee cannot be compelled to reimburse a custodial parent for expenses incurred in providing for the beneficiary’s support and maintenance before the beneficiary received her first benefit payment. 20 C.F.R § 404.2040(d). A payee may satisfy an obligation that arose prior to the date of the first payment “only if the current and reasonably foreseeable needs of the beneficiary are met,” and the payee determines that it is in the beneficiary’s best interest to pay the debt rather than conserve and invest the funds. 20 C.F.R. § 404.2040(d). Thus, as representative payee, you would have to consider whether you are able to meet both the beneficiary’s present needs and her reasonably foreseeable future needs before using any of the lump-sum back benefits to repay obligations that arose prior to the first month that the beneficiary received benefit payments. You would also have to consider whether it is in Brianna’s best interest to repay the obligation rather than conserve and invest the funds for her future use. 20 C.F.R. § 404.2040(d).

Furthermore, under the Social Security Act, while you remain as Brianna’s payee, you may not cede your duties as a payee to any else, including Ms. M~. Because Ms. M~ is conservator for Theresa E~, under Michigan law she has a fiduciary duty of undivided loyalty to Theresa E~ which is different from your fiduciary duty to Brianna under the Social Security Act. Mich. Comp. Laws §§ 700.1104(e), 700.1212(a), 700.5416; In re Gierman, No. 288264, 2010 WL 866146 at *2 (Mich. App. Ct. March 11, 2010); In re Estate of Graves, No. 286674, ___ N.E.2d ___, 2009 WL 4725753 (Mich. App. Ct. Dec. 3, 2009). If you take actions that conflict with your duties as a representative payee, SSA may need to stop paying Brianna’s benefits to you, and appoint another person in your place. 20 C.F.R. § 404.2050(b)-(c), (f). Under some circumstances, if the accounting you provide to SSA shows that you have not used Brianna’s benefits properly, you may become personally liable for any of Brianna’s benefits that are not used according to SSA’s regulations. 20 C.F.R. § 404.2041(a).

For additional information regarding the duties of a representative payee, please see SSA Pub. 05-10076, “A Guide for Representative Payees,” http://www.socialsecurity.gov/pub/10076.html, and http://www.socialsecurity.gov/payee/fawrep.htm (Frequently Asked Questions for Representative Payees). We hope that this information answers any questions you may have regarding your duties and responsibilities as Brianna’s representative payee. You may want to advise the court and the other parties of your obligations. If you have any additional questions, please contact our office at _________ for further information regarding this matter.

Yours truly,

B. PR 09-094 SSI - Michigan - Review of Divorce Decree Assigning Child's Benefits for Kyle M. D~ Case No. 903102; Our Ref. PLNL 09-1049-nc:d

DATE: April 29, 2009

1. SYLLABUS

The Social Security Act protects individuals by prohibiting the assignment or attachment of social security benefits. When the Commissioner of Social Security appoints a representative payee, the payee is required to use and distribute all benefit payments they receive in a manner consistent with the Social Security Act and regulations. A parent acting as representative payee for their child(ren) cannot be directed by a court to use a portion of their child's Social Security Title II benefits to satisfy a divorce decree.

2. OPINION

You asked us to review a divorce decree entered by the Midland County (Michigan) Circuit Court, Family Division, and provide the field office with appropriate language with which to respond, if necessary, to the Court. SSA is not a party to the divorce decree, but the court order involves Supplemental Security Income benefits paid to Jennifer L. D~ as representative payee for her minor son, Kyle M. D~. We have attached proposed language that can be used in a letter to the court, as well as language that can be used in a letter to the representative payee. Below we explain the basis for that proposed language.

BACKGROUND

Kyle M. D~, who was born in 1996, was determined to be eligible for Supplemental Security Income (SSI). Kyle's mother, Jennifer L. D~, was named as his representative payee on September 3, 2003. On October 23, 2006, Judge Paul J. C~ of the 42nd Circuit Court of Midland County, Michigan, Family Division, issued a judgment of divorce between Kyle's parents, Jennifer and D~ A. D~ ("Divorce Decree"). The Divorce Decree awarded joint custody to Jennifer and D~, and ordered Jennifer to "pay directly to [D~] one-half of Kyle's SSI … as he is spending equal time with both parents" (Divorce Decree at 5). Based on the information we received, Jennifer complied with the Divorce Decree, and has been giving half of Kyle's SSI payments to D~ since 2006. Judge C~ has since retired; the case is now on the docket of Judge Michael J. B~.

DISCUSSION

I. SSA appoints representative payees and prescribes their duties.

SSA generally appoints and pays benefits to a representative payee when a beneficiary is under the age of 18, and thus presumed unable to manage or direct the management of benefits payments due to youth. 20 C.F.R. §§ 416.601(a), 416.610(2)(b). SSA's first preference in selecting a representative payee for a minor child is a natural or adoptive parent who has custody of the beneficiary. 20 C.F.R. §§ 416.620, 416.621(c)(1). Before appointing a parent as representative payee, SSA performs an investigation of the prospective payee. 20 C.F.R. § 416.624.

Once appointed, a representative payee has a responsibility to use the benefits received on the beneficiary's behalf only in a manner and for the purpose she determines to be in the beneficiary's best interest. 20 C.F.R. § 416.635(a). SSA considers that payments certified to a representative payee have been used for the use and benefit of the beneficiary if they are used for the beneficiary's current maintenance, which includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items. 20 C.F.R. § 416.640(a)(1). Benefits may not be used to support the beneficiary's parent unless the parent is legally dependent on the beneficiary. 20 C.F.R. § 416.640(c). After the payee has used the benefit payments for current maintenance, any remaining amount must be conserved or invested on behalf of the beneficiary. 20 C.F.R. § 416.645(a). The payee must invest the funds in accordance with the rules followed by trustees, and must show that she is holding the property in trust for the beneficiary. 20 C.F.R. § 416.645(a).

When the representative payee is also the beneficiary's parent, the payee must keep the benefits separate from her own funds when the beneficiary is not living in the same household as the payee. 20 C.F.R. § 416.635(b). SSA requires the payee to provide written reports at least once a year accounting for the payee's use of the benefit payments. 20 C.F.R. §§ 416.635(e), 404.665. The payee must keep records of how the benefits were used, and make all supporting records available upon SSA's request. 20 C.F.R. §§ 416.635(e), 416.665. The records must include where the beneficiary lived during the accounting period; who made the decisions on how the benefits were spent or saved; how the benefit payments were used; and how much of the benefit payments were saved or invested. 20 C.F.R. § 416.665(a)-(d). The payee must notify SSA of any event or change that affects the amount of benefits the beneficiary may receive, or how the beneficiary receives those benefits. 20 C.F.R. § 416.635(d). The payee must also notify SSA of any change in her circumstances that affect the performance of her payee responsibilities. 20 C.F.R. § 416.635(f). SSA may select a new representative payee if it determines that a payee is not longer able or willing to carry out payee responsibilities. 20 C.F.R. § 416.650. If SSA determines that the payee has not used the benefit payments or carried out her responsibilities in accordance with SSA guidelines; is unable to manage the benefit payments; or has failed to cooperate in providing SSA with information about her actions as payee, SSA will promptly terminate payment of benefits to the payee and find a new payee. 20 C.F.R. § 416.650(b)-(c), (f). If SSA determines that the payee misused the benefit payments, she may responsible for paying back those benefits. 20 C.F.R. § 416.641(a).

II. Michigan courts do not have jurisdiction over SSA.

As an initial matter, it is well established that SSA is not bound by a state court order, because the Michigan Circuit Court lacks jurisdiction over SSA under the Supremacy Clause of the United States Constitution and the doctrine of sovereign immunity. United States Const. Art. VI, clause 2; Hercules Inc. v. United States, 516 U.S. 417, 422-23 (1996); United States v. Commonwealth of Kentucky, 252 F.3d 816, 825 (6th Cir. 2001); see also Commonwealth of Puerto Rico v. United States, 490 F.3d 50, 61 (1st Cir. 2007). The limited waiver of sovereign immunity in the Social Security Act, which is strictly construed in SSA's favor, is unambiguously limited to individuals who have exhausted their administrative appeals remedies. 42 U.S.C. § 405(g), 1383(c)(3); United States v. Mitchell, 445 U.S. 535, 538-39 (1980); Block v. North Dakota, 461 U.S. 273, 287 (1983). SSA has not relinquished its sovereignty and has not submitted to the jurisdiction of the Michigan courts. As a result, the Michigan Circuit Court cannot override the Agency's regulations regarding SSI. However, in this case, SSA is not a party to the Divorce Decree and has not been asked or ordered to take any action. The issue is the implications of the provision of the Divorce Decree ordering Jennifer to pay half of Kyle's SSI to D~.

III. The Commissioner determines who should manage a beneficiary's benefits and how those benefits should be managed.

Even if the Michigan court had authority over SSA in general, it cannot direct the payment of benefits to a particular representative payee. Congress granted the power to determine who should manage a beneficiary's benefits and how they should be managed to the Commissioner. 42 U.S.C.§ 405(j). As described in Part I above, that power includes the right to appoint or remove a representative payee, and the right to direct the representative payee as to her responsibilities. Id. As explained in Part II above, SSA has not relinquished its sovereignty or submitted to the jurisdiction of state courts. Consequently, state courts lack the authority and the jurisdiction to designate a representative payee for purposes of the Social Security Act, or to direct the disposition of benefits certified to a representative payee. Only the Social Security Administration has the discretion and authority to designate, change, and enforce the duties of a representative payee. 42 U.S.C. § 1383(a)(2); 20 C.F.R. §§ 601-416.665; Kriegbaum v. Katz, 909 F.2d 70, 74 (2d Cir. 1990); McGrath v. Weinberger, 541 F.2d 249 (10th Cir. 1976).

In addition, the Act protects a beneficiary's right to receive SSI benefits by prohibiting the assignment or attachment of benefits:

 

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

 

42 U.S.C. §§ 407(a), 1383(d)(1). "Legal process" means any "judicial or quasi-judicial mechanism . . . by which control over property passes from one person to another[.]" Washington Dep't of Social and Health Services v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003). That includes court orders. POMS GN 02410.001. The anti-assignment provision thus constitutes a "broad bar against the use of any legal process to reach all social security benefits," and is intended to protect the rights and benefits from all attempts to use legal process to alienate them, unless Congress has specifically indicated otherwise. Philpott v. Essex County Welfare Board, 409 U.S. 413, 417 (1973).

For these reasons, the Michigan Circuit Court cannot override the Agency's regulations regarding the appointment of Kyle's representative payee, and how that representative payee should manage his benefits. By issuing the Divorce Decree, the state court has assumed authority to decide who shall manage Kyle's benefits, and how they shall be managed, a power the Congress has granted exclusively to the Commissioner. Because Jennifer D~ is Kyle's representative payee, and D~ is not and never has been named as Kyle's representative payee, the state court's judgment constitutes a legal process assigning control of Kyle's benefits to someone other than the representative payee, and would constitute a taking by judicial order of identifiable Social Security benefits. Thus, even if the court's direction of the benefits is intended to benefit Kyle, it is still invalid, because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing how and to whom benefits will be paid.

Moreover, to the extent that Jennifer complied with the Divorce Decree, she may have violated her responsibilities as Kyle's representative payee because, even though the Divorce Decree implies that Kyle SSI's is to be used for his support, Jennifer cannot control how D~ spends or conserves the SSI payments, and probably cannot fulfill her reporting requirements as Kyle's representative payee.

CONCLUSION

The Michigan court had no authority to direct Jennifer D~ to pay half of Kyle's benefits to D~ every month. In addition, Jennifer's apparent compliance with the Divorce Decree may well have violated her fiduciary duty to Kyle as his representative payee. Sample letters to Judge B~ and to Jennifer D~ are attached to this opinion.

Donna L. C~
Regional Chief Counsel, Region V

By: ____________________________
Julie L. B~
Assistant Regional Counsel

 

Social Security Administration
611 East Genesee
Saginaw, MI 48607
Date:

 

The Honorable Judge Michael J. B~
42nd Circuit Court - Family Division
Midland County Courthouse
301 West Main Street
Midland, Michigan 48640-6610

 

Re: Case No. 05-9410-dm-c, Jennifer L.D~ v. D~ A. D~

 

Your Honor:

 

The Social Security Administration (SSA) has received a copy of the judgment of divorce in the above-referenced case, issued by Judge Paul J. C~ on October 23, 2006. SSA understands that the case is now on your docket. The judgment included an order that plaintiff Jennifer L. D~ pay directly to defendant D~ A. D~ half of the Supplemental Security Income (SSI) benefits that she receives on behalf of her minor child Kyle, on grounds that Kyle will be spending equal time with both parents

We must respectfully inform you that the Michigan Circuit Court lacks jurisdiction to direct the payment of Social Security benefits. The Social Security Act and its implementing regulations give SSA, a federal agency, the sole authority to appoint a party to serve as the payee to receive benefits on behalf of a Social Security beneficiary and determine how those benefits should be managed. 42 U.S.C. §§ 405(j), 1383(a)(2); 20 C.F.R. §§ 416.601-416.665. Only SSA has the discretion and authority to designate, change, and enforce the duties of a representative payee. In addition, the Social Security Act bars the use of any legal process, including court orders, to transfer control of Social Security benefits from one person to another, unless Congress has specifically indicated otherwise. 42 U.S.C. §§ 407(a), 1383(d)(1); Washington Dep't of Social & Health Servs. v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003); POMS GN 02410.001. Congress has not indicated that state court orders may be used to transfer Social Security benefits in divorce cases, and SSA has not consented to submit itself to the jurisdiction of the Michigan Circuit Court. See United States v. Sherwood, 312 U.S. 584 (1941) (under the doctrine of sovereign immunity, federal agencies are immune to the orders of state courts unless the agency consents to jurisdiction). Consequently, even if the judgment entry of October 23, 2006, was intended to benefit Kyle, the judgment was invalid because state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing the disposition of a beneficiary's SSI benefits or appointing any particular individual to receive benefits on an SSI beneficiary's behalf.

In addition, the court's order could cause a representative payee to violate her responsibilities under the Social Security Act and its regulations. A representative payee has a fiduciary duty to use the benefits in accordance with SSA regulations. 20 C.F.R. §§ 416.625, 416.635, 416.640. 416.645. A representative payee must generally use payments certified to her for the beneficiary's current maintenance, which includes costs incurred in obtaining food, shelter, clothing, medical care, and personal comfort items. 20 C.F.R. § 416.640(a)(1). When a representative payee is also the beneficiary's parent, the payee must keep the benefits separate from her own funds when the beneficiary is not living in the same household as the payee. 20 C.F.R. § 404.2035(b). Benefits may not be used to support the beneficiary's parent unless the parent is legally dependent on the beneficiary. 20 C.F.R. § 416.640(c). After the payee has used the benefit payments for current maintenance, any remaining amount must be conserved or invested on behalf of the beneficiary. 20 C.F.R. § 416.645(a). The payee must account for her use of the benefits, and may be asked to show where the beneficiary lived during the accounting period; who made the decisions on how the benefits were spent or saved; how the benefit payments were used; and how much of the benefit payments were saved or invested. 20 C.F.R. § 416.665(a)-(d). The payee must make a written report once a year, and must make all supporting records available upon SSA's request. 20 C.F.R. §§ 416.635(e), 416.665.

As already stated, Michigan courts lack authority to order a representative payee to hand over half of a child's SSI benefit payments. Should the payee comply with such an order, such actions may be considered inconsistent with the payee's responsibilities, because she would be unable to direct the management of the benefits or maintain appropriate records regarding the use of the benefits. If SSA determines that a representative payee has not used the benefit payments or carried out her responsibilities in accordance with SSA guidelines, or has become unable to manage the benefit payments, SSA may terminate payment of benefits to the payee and find a new payee. 20 C.F.R. § 416.650(b)-(c), (f). Under some circumstances, the payee may be responsible for repaying any benefits that have been misused. 20 C.F.R. § 416.641(a).

I hope that the information in this letter answers any questions or concerns that you may have.

Yours truly,

 

 

Social Security Administration
611 East Genesee
Saginaw, MI 48607

 

Date:

 

Jennifer L. D~
[street]
[town, MI zip]

 

Re: Representative Payment on behalf of Kyle D~

 

Dear Ms. D~:

 

The Social Security Administration (SSA) understands that you have recently expressed some concerns about the terms in a judgment of divorce that Judge Paul J. C~ entered on October 23, 2006. SSA understands that the Divorce Decree directs you to pay to your former husband, D~ A. D~, half of the Supplemental Security Income (SSI) that you receive on behalf of your minor son Kyle.

SSA has appointed you as Kyle's representative payee, and certifies the monthly payment of Kyle's SSI benefits to you. As a representative payee, you have a duty to use Kyle's benefits only for Kyle's best interests; to provide written reports to SSA accounting for your use of the benefit payments, and to keep records of how the benefits were used, and make those records available to SSA upon request. It appears that the terms of the Divorce Decree may conflict with your duties as Kyle's representative payee under the Social Security Act.

For the duties of a representative payee, please see SSA Pub. 05-10076, "A Guide for Representative Payees," http://www.socialsecurity.gov/pub/10076.html, and http://www.socialsecurity.gov/payee/fawrep.htm (Frequently Asked Questions for Representative Payees).

Yours truly,

C. PR 05-103 SSI-Michigan-Court Order for the Payment of Funds by Jerome S. P~ to Deanna S. P~: SSN ~ -REPLY Our reference number: 03-P-036

DATE: May 8, 2003

1. SYLLABUS

The Court cannot re-direct children's past-due benefits. The representative payee is required to use and distribute the benefit payments consistent with the Social Security Act and regulations.

2. OPINION

You asked whether the Agency should take any legal action regarding a state court order that requires Jerome S. P~ to pay funds to his ex-wife Deanna S. P~. Mr. P~ explained to the Agency that these are retroactive funds he received as representative payee for their three children. This retroactive payment covers a time period when the children were in the custody of their mother. The court order directed a total payment of $2,553 (presumably the amount of the retroactive payment) to Ms. P~. We conclude that the Agency is not a party to the court order and does not need to take any legal action with respect to the order. Regardless of the court order, Mr. P~ is required to use and distribute the benefit payments consistent with the Social Security Act and regulations. In this case, Mr. P~'s compliance with the court order is, in our opinion, not necessarily inconsistent with his responsibilities as a representative payee. However, we advise informing Mr. P~ and the court of Mr. P~'s obligations with respect to these benefits and the circumstances under which he may be permitted to pay them to Ms. P~.

BACKGROUND

As we understand the facts, Ms. P~ was notified by the Agency that all retroactive payments for the three children would be sent to Mr. P~, who had custody at the time of adjudication. This is consistent with Agency policy. See GN 00603.070(B)(1). After Mr. P~ received the funds, he refused to distribute any of the funds to Ms. P~, who had custody of the three children during the time period covered by the retroactive payments. She then filed an action in the Wayne County Circuit Court of the State of Michigan. See Mich. Comp. Laws Ann. § 722.3(2) (action to enforce child support obligations). The Court subsequently issued a three-part order. First, the Wayne County Friend of the Court was ordered to release $696 to Ms. P~. It is unclear whether these are funds from the Agency or other funds (such as child support from Mr. P~) in its possession. Second, Mr. P~ was ordered to pay $1,863 to Ms. P~. Third, the Wayne County Friend of the Court was ordered to re-consider the issue of child support. The Agency had advised Mr. P~ to contact the Agency if the court issued a payment order, and Mr. P~ did so. You have submitted the court documentation to us for review based on GN 00602.120(B)(2) that requires solicitation of our opinion in such a case.

DISCUSSION

As an initial matter, it is well established that the Agency is not bound by a state court order. See Hercules Inc. v. United States, 516 U.S. 417, 422-23 (1996), citing United States v. Testan, 424 U.S. 392, 399 (1976) and United States v. Sherwood, 312 U.S. 584 (1941). However, in this situation, the Agency is not a party to this order and has not been asked or ordered to take any action. The issue is whether the provision in the court order that $1,863 of the benefits payments be made to Ms. P~ (the amount would be increased by $696 if the amounts held by the Friend of the Court were also retroactive payments) is an improper assignment of benefits. Section 407 of Title 42 of the United States Code provides:

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 the operation of any bankruptcy or insolvency law. 42 U.S.C. § 407(a) (emphasis added).

The Agency is not being directed to pay the amount to the mother. See Rose v. Rose, 481 U.S. 619, 635 (1987) ("Thus, while it may be true that these funds are exempt from garnishment or attachment while in the hands of the Administrator, we are not persuaded that once these funds are delivered to the veteran a state court cannot require that veteran to use them to satisfy an order of child support."). The court order is directed to Mr. P~, the father of the children. Although the court order references the benefits "he received which were retroactive while the child was in the custody of the mother" it is somewhat unclear whether the Court was ordering Mr. P~ to release the children's funds to the mother for child support or as a debt payment.

In either case, the Court cannot re-direct the children's funds to their mother. The court cannot order that benefits belonging to the children be used to satisfy Mr. P~'s to pay child support. Furthermore, Ms. P~, who was not a representative payee during the time she had custody (because there is no need for a representative payee until benefits were issued), was already required, as the children's mother, to support the children. See Mich Comp. Laws. Ann § 722.3 (parents are jointly and severally obligated to support a minor). The children cannot contract with the mother to supply their basic needs with a promise to re-pay from future Social Security benefits because the obligation already rests with the parents. However, Social Security benefits may be used to reimburse parents for the cost of food, shelter, clothing, medical care, and personal comfort items, even if the parent would be required, by state law, to provide for their children's basic needs. See Washington State Department of Social and Health Services v. Guardianship Estate of Keffeler et. al., 123 S.Ct. 1017, 1027 fn. 11 (2002) (logic that reimbursement is valid applies equally to parents since they, like the department of social services, are "under a legal obligation to support their children's basic needs irrespective of Social Security benefits").

Nonetheless, Mr. P~ was required to use these past-due benefits for "the beneficiary's current maintenance." 20 C.F.R. § 404.2040(a) (emphasis added). The regulations provide that a "payee may not be required to use benefit payments to satisfy a debt of the beneficiary, if the debt arose prior to the first month for which payments are certified to a payee. If the debt arose prior to this time, a payee may satisfy it only if the current and reasonably foreseeable needs of the beneficiary are met." 20 C.F.R. § 404.2040(d). The Agency's Program Operations Manual System (POMS) explains that "[a]nyone who claims a share of the funds as reimbursement for care of the beneficiary during the months for which accrued benefits are payable should present his/her claim to the current payee. See GN 00602.030 -- Claims of Creditors." POMS GN 00603.070(B)(1). Consistent with the regulations, the POMS at GN 00602.030(A) provides that "[I]f the beneficiary's current needs and reasonably foreseeable needs are met, a payee may satisfy a beneficiary's past debt." See 20 C.F.R. § 2040(d). The POMS further explains that, "[a]s a flexible guideline, consider the beneficiary's current and reasonably foreseeable needs to be met if the beneficiary will have a reserve of two month's benefits after the past debt is paid and the entire ongoing monthly benefit is not needed to meet these needs." POMS GN 00602.030(A)(2). The Supreme Court has indicated that these regulations, and the POMS interpreting these regulations, are reasonable. See Keffeler, 123 S.Ct. at 1027 ("Commissioner's interpretation of her own regulations is eminently sensible and should have been given deference"). Thus, Mr. P~ may pay the child's past-due benefits to the child's mother, who had custody of the child during the time period covered by the past-due benefits, only if the current and reasonably foreseeable needs of the child are met within the meaning of the regulations and POMS, regardless of any court order to the contrary.

When the children received the past due benefits, those benefits covered the time the mother had custody and the mother may have assumed that she was entitled to be "reimbursed" out of those past due benefits. Certainly, the family court agreed with that assumption. When, as here, a court acts under state family law, the courts appear reluctant to invoke federal statutory provisions over state law. Rose, 481 U.S. 619, 628 ("Given the traditional authority of state courts over the issue of child support, their unparalleled familiarity with local economic factors affecting divorced parents and children, and their experience in applying state statutes. . . we conclude that Congress would surely have been more explicit had it intended the [Agency's] power to displace a state court's power to enforce an order of child support.").

The Agency is not liable if the father breaches his obligation to ensure proper use of all of the children's SSI payment. See 20 C.F.R. § 404.2041. However, Mr. P~ can be held personally liable for misuse of benefits and the Agency may change the representative payee or take any other action allowed under the regulations if Mr. P~ pays the amount and cannot establish that the funds were expended for the children's needs. 20 C.F.R. § 404.2050.

We recommend that the Agency consider sending a letter to Mr. P~ to clarify that the Agency is not bound by the state court order because, generally, state courts do not have jurisdiction and are prohibited under 42 U.S.C. § 407 from directing how the children's benefits are to be used. This letter would also clarify that Mr. P~ retains responsibility to ensure that the funds he receives as representative payee are properly spent. We suggest that you include language that explains that Mr. P~ was required to use these past-due benefits for "the beneficiary's current maintenance." 20 C.F.R. § 404.2040(a) (emphasis added). The regulations provide that a "payee may not be required to use benefit payments to satisfy a debt of the beneficiary, if the debt arose prior to the first month for which payments are certified to a payee. If the debt arose prior to this time, a payee may satisfy it only if the current and reasonably foreseeable needs of the beneficiary are met." 20 C.F.R. § 404.2040(d). The POMS explains that "[a]nyone who claims a share of the funds as reimbursement for care of the beneficiary during the months for which accrued benefits are payable should present his/her claim to the current payee. See GN 00602.030 -- Claims of Creditors." POMS GN 00603.070(B)(1). Consistent with the regulations, the POMS at GN 00602.030(A) provides that "[I]f the beneficiary's current needs and reasonably foreseeable needs are met, a payee may satisfy a beneficiary's past debt." See 20 C.F.R. § 2040(d). The POMS further explains that, "[a]s a flexible guideline, consider the beneficiary's current and reasonably foreseeable needs to be met if the beneficiary will have a reserve of two month's benefits after the past debt is paid and the entire ongoing monthly benefit is not needed to meet these needs." POMS GN 00602.030(A)(2). The Supreme Court has indicated that these regulations, and the POMS interpreting these regulations, are reasonable. See Keffeler 123 S.Ct. at 1027 ("Commissioner's interpretation of her own regulations is eminently sensible and should have been given deference"). Thus, Mr. P~ may pay the child's past-due benefits to the child's mother, who had custody of the child during the time period covered by the past-due benefits, only if the current and reasonably foreseeable needs of the child are met within the meaning of the regulations and POMS, regardless of any court order to the contrary. We also recommend that you remind Mr. P~ that he may be personally liable for any misuse of funds.

You may also wish to send an informational letter to the court explaining that, pursuant to 42 U.S.C. § 407, the court does not have jurisdiction to direct how the child's benefits can be used or paid. We recommend that you also include language as outlined above, explaining the circumstances under which the past-due benefits can be used to reimburse the mother for the expenses of maintaining the child.

CONCLUSION

We suggest sending an informational letter to the father and to the Court as outlined above.

Gary A. S~
Acting Regional Chief Counsel

Office of the General Council, Region V
Janet M. G~
Assistant Regional Counsel


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1507211025
PR 07211.025 - Michigan - 04/07/2010
Batch run: 04/25/2016
Rev:04/07/2010