PR 07211.046 South Dakota

A. PR 04-099 Court Order Directing Use of Monthly Social Security Benefits - Timothy D. M~, Jr.

DATE: March 22, 2004

1. SYLLABUS

The court order issued by the South Dakota Sixth Judicial District Court, Tripp County, is contrary to Social Security Administration regulations and policy. The court order violates section 207(a) of the Social Security Act (Act), 42 U.S.C. § 407(a). A state court may not direct the disposition of Social Security or SSI benefits by a representative payee. The representative payee has the responsibility to ensure that benefits are used only for the use and benefit of the beneficiary in the manner the payee determines to be in the best interests of the beneficiary.

2. OPINION

Your office has requested our assistance in reviewing a court order issued by the South Dakota Sixth Judicial District Court, Tripp County, to determine whether the order is contrary to Social Security Administration (SSA) regulations and policy. The court order directs that "1/2 of the [survivor's] benefit received" on behalf of Timothy D. M~, Jr. (Timmie) "be placed in a 529-account-educational-trust . . . for Timmie's college or vocational education after high school." Currently, Charles N~ is Timmie's representative payee. For the reasons set forth below, we believe the court order violates section 207(a) of the Social Security Act (Act), 42 U.S.C. § 407(a). See Memorandum from Regional Chief Counsel, Denver, to Regional Commissioner, Denver, Court Order Directing Use of Monthly Social Security Benefits - John A. H~ (Revised) (July 15, 2003).

Section 207(a) of the Act states:

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). See also POMS GN 02410.001. "Under the Act, therefore, Social Security benefits and the associated rights under the Social Security Act are generally neither assignable nor subject to legal process. Indeed, section 207's broad bar against the use of any legal process to reach Social Security benefits includes not only all claimants or creditors, but also states." Memorandum from Regional Chief Counsel, Philadelphia, to Regional Commissioner, Philadelphia, Pennsylvania Support Decree Assigning Social Security Payments - Rachel R. M~, SSN: ~(March 25, 1994) (citing Philpott v. Essex County Welfare Bd., 409 U.S. 413, 416-17 (1973)).

"Federal courts have generally interpreted section 207 broadly. Courts have upheld the bar of section 207 when attempts have been made to alienate Social Security benefits from both recipients and representative payees." Id. (citing Tidwell v. Schweiker, 677 F.2d 560, 566-68 (7th Cir. 1982) (holding that a consent form, which a state psychiatric facility asked those seeking hospitalization to sign authorizing the facility to reimburse itself for the cost of hospitalization from the Social Security benefits of the individual, violated section 207); Woodall v. Bartolino, 700 F. Supp. 210, 219-20 (S.D. N.Y. 1983) (holding that court orders may not properly be entered against Social Security benefits when they are managed by representative payees in order to enforce the application of the benefits to the care and maintenance of an institutionalized individual).

"Furthermore, it is well-established that the Federal Government, as sovereign, is immune from suits in and the orders of state courts, unless the sovereign has consented to submit itself to the jurisdiction of such court, which in the present case, it has not." Memorandum from Regional Chief Counsel, Chicago, to Manager, Cleveland Downtown Field Office, Charles C~, SSN ~, Advice About State Court Order to Appoint Representative Payee (October 4, 2002) (citing United States v. Sherwood, 312 U.S. 584 (1941)).

Moreover, if Mr. N~ "complies with the court's order, []he may violate h[is] responsibilities as a representative payee." Memorandum, Pennsylvania Support Decree, supra (citing 42 U.S.C. § 1383(a)(2)). "Under the regulations, a representative payee has the responsibility to ensure [that Social Security] benefits are used only for the use and benefit of the beneficiary in the manner []he determines to be in the best interests of the beneficiary." Id. (citing § 416.635); see also 20 C.F.R. § 404.2035. "In this case, it could be said that by complying with the court order, [Mr. N~] has allowed h[is] rights and responsibilities as a representative payee to be usurped: []he is not making the decisions about the use of the funds, but has turned them over to [the court] in accordance with the court order." Id.

In sum, section 207 of the Act is intended to protect the rights and benefits arising under the Act "from all attempts to use legal process to alienate them, unless Congress has specifically indicated otherwise." Id. We believe the court's order, which can be construed as assigning control of Timmie's Social Security benefits to another, is violative of section 207 because it constitutes legal process that seeks to affect rights arising under the Act. "Identifiable Social Security benefits cannot be taken by judicial order, and in this case it appears that they have been." Id. (citing Woodall, 700 F. Supp. at 221). Moreover, in the state court process used here, the state court has taken upon itself the authority to decide who shall manage the child's Social Security benefits, and how they shall be managed. However, Congress has granted the power to make that selection exclusively to the Commissioner in section 205(j) of the Act, and the Commissioner's regulations and decisions issued thereunder are clearly to be given deference. See Washington Dep't of Social and Health Servs. v. Guardianship Estate of Danny Keffeler, 123 S.Ct. 1017 (2003). Because the state court's actions are contrary to the controlling Federal statute and the decision of the Commissioner issued thereunder, the state court's attempt to assume such authority must fail under the Supremacy Clause of the United States Constitution._11 .

As a matter of litigation policy, SSA does not get involved in section 207 issues that arise after payment to the beneficiary has been completed. Therefore, if any court action is to be taken at this time, Mr. Novotny, the person subject to the court's order, through his attorney, should take it.

Yvette G. K~
Acting Regional Chief Counsel, Region VII

By ______________
Allan D. B~
Assistant Regional Counsel

"The Supremacy Clause of the Constitution, Article VI, cl. 2, states that the 'Constitution, and the laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land, and the Judges in every State shall be bound thereby, anything in the Constitution or Laws of any State to the Contrary notwithstanding.' The Supreme Court has recognized it 'is a seminal principle of our law that the constitution and the laws made in pursuance thereof are supreme; that they control the constitution and laws of the respective States and cannot be controlled by them.'" Memorandum from OGC Policy and Legislation Division, to Office of Disability Division of Medical and Vocational Policy, Issues Related to Disability Examiners Ordering Consultative Examinations and Tests and Medical and Psychological Consultants Developing Cases for Disability Determination Services (DDS) in Other States (August 21, 1998) (citing Hancock v. Train, 426 U.S. 167, 178 (1976) (internal quotation marks omitted).


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PR 07211.046 - South Dakota - 05/02/2004
Batch run: 01/27/2009
Rev:05/02/2004