QUESTIONS PRESENTED
This memorandum is in response to your request for a review of whether a March XX,
2016, Texas state court order directing the Texas Department of Family and Protective
Services (TDFPS), the current representative payee for the number holder A~ (NH),
a minor child, to send the NH’s Supplemental Security Income (SSI) payment of benefits
(payments or benefits) to the NH’s attorney ad litem conforms with Social Security
law. In addition, you asked for our assistance in preparing a letter to assist TDFPS
in responding to this state court order.
ANSWER
A state court order cannot supersede federal law, and this Texas state court order
attempts to do so by essentially selecting a different representative payee and directing
how SSI payments are to be managed for the NH. The March XX, 2016 Texas state court
order directing TDFPS, the current SSA selected representative payee, to send the
NH’s SSI payments violates sections 207(a) and 1631(d)(1) of the Social Security Act
(Act), which provide that Title XVI SSI payments are not subject to legal process
and that the right to such benefits may not be assigned or transferred. See 42 U.S.C. §§ 407(a), 1383(d)(1). The state court order also provides that the NH’s
guardian ad litem is to be responsible for directing disbursements of the SSI funds
to the child. In doing so, the state court order conflicts with the Act and regulations,
which provide that SSA is exclusively responsible for selecting a representative payee,
and which set forth the rights and responsibilities of representative payees with
regard to use of the Social Security benefits they receive on a beneficiary’s behalf.
See 42 U.S.C. §§ 405(j), 1383(a)(2); 20 C.F.R. §§ 416.601 – 416.665. Consequently, the
state court order is contrary to controlling federal law.
Regarding your request for assistance in responding to the state court order, we have
provided language for you to send to TDFPS explaining the controlling federal law
regarding management of Social Security payments and a representative payee’s responsibilities.
Without addressing the specifics of the court case, which SSA is not a party to, in
this letter we explain that under the supremacy of federal law, the Act does not permit
a state court to direct a representative payee how to manage a number holder’s SSI
payments.
BACKGROUND
According to the information provided in your request, effective May 22, 2014, SSA
selected TDFPS as the representative payee for the NH, a minor child and SSI recipient.
On March XX, 2016, an associate judge in the 315th Judicial District Court in Harris
County, Texas (state court) issued an Order Regarding Child’s Social Security Benefits
(state court order) in the case, In the Interest of A~, Child. The state court noted
that the NH, a child, was in the permanent managing conservatorship of TDFPS, and
that all parental rights had been terminated. The state court order also noted that
TDFPS received $733.00 each month in SSI benefits from the agency for the NH’s benefit.
The state court determined that “these funds have not been specifically dedicated
to be used for the benefit of the child.” The state court also referenced an earlier
state court order dated August XX, 2015 (not included with the information provided)
that found it was in the NH’s best interest for Social Security to disburse benefits
to the NH and entered specific orders regarding the how to disburse these benefits.
With regard to the NH’s SSI benefits, the state court ordered that within ten days
of receiving the NH’s SSI payments, TDFPS must send those SSI payments to the NH’s
attorney ad litem to deposit into the attorney ad litem’s Interest on Lawyers’ Trust
Account (IOLTA) for the NH’s benefit. In addition, the state court directed the attorney
ad litem to disburse the SSI payments to the NH from the IOLTA account as the NH’s
guardian ad litem directs. The state court order directed the attorney ad litem to
provide monthly statements to the NH by the tenth day of each month setting out all
deposits and disbursement of the NH’s SSI payments. The state court order further
set forth specific hearing procedures for resolving disagreements between the child
and the NH’s guardian ad litem as to disbursement of the NH’s SSI payments
ANALYSIS
I. The State Court Order Conflicts with Federal Law Prohibiting the Transfer or Assignment
of the Right to Social Security Benefits and Improperly Subjects the Social Security
Benefits to Legal Process
The state court order, which directs TDFPS to send the NH’s SSI payments to the NH’s
attorney ad litem, violates sections 207(a) and 1621(d)(1) of the Act. Section 207(a)
provides that “[t]he 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 to the operation of any bankruptcy,
or insolvency law.” See 42 U.S.C. § 407(a); see also 20 C.F.R. § 404.1820(a). For purposes of the SSI payments
at issue here, section 1631(d)(1) of the Act incorporates section 207(a) by reference
and applies it to Title XVI of the Act. See 42 U.S.C. § 1383(d)(1). Thus, under the Act, Social Security benefits are generally
neither assignable nor subject to legal process. See 42 U.S.C. §§ 407(a), 1383(d)(1); Washington Dept. of Social and Health Services v. Guardianship Estate of Danny Keffeler, 537 U.S. 371, 385 (2003). In other words, the Act “prohibit[s] the transfer of control
over money to someone other than the beneficiary, recipient, or the representative
payee.” Program Operations Manual System (POMS) GN 02410.001A (noting that SSA’s responsibility for protecting payments against legal process and
assignment ends when we pay the beneficiary or recipient, but once paid, sections
207 and 1631(d)(1) of the Act continue to protect the Social Security payments as
long as we can identify them as SSI payments).
Here, because the state court order directs TDFPS to send the NH’s SSI payments to
the NH’s attorney ad litem, it is attempting to assign control of the NH’s SSI payments
to someone other than TDFPS, the NH’s SSA selected representative payee, in violation
of the Act. As such, the state court order conflicts with federal law governing the
management of Social Security benefits.
A state court order cannot supersede federal law. See U.S. Const. Art. VI, cl. 2 (the Supremacy Clause declares the Constitution and the
laws of the United States as the supreme law of the land and that judges in every
state are bound by federal law); Bush v. Vera, 517 U.S. 952, 991-992 (1996) (“The Supremacy Clause obliges the States to comply
with all constitutional exercises of Congress’ power.”). Therefore, the state court
order directing TDFPS to send the NH’s SSI payments to the NH’s attorney ad litem
is in clear conflict with federal law.
II. The State Court Order Conflicts with Federal Law Governing Representative Payees
By instructing that the attorney ad litem is to receive all of the NH’s SSI payments
and that the guardian ad litem is to determine how to disburse the NH’s SSI payments,
in essence, the court is trying to select a new representative payee. In doing so,
the state court order conflicts with the Act and agency’s regulations giving SSA the
exclusive right to select the representative payee and controlling the rights and
responsibilities of representative payees in how they use Social Security benefits.
See 42 U.S.C. §§ 405(j), 1383(a)(2); 20 C.F.R. §§ 416.601 – 416.665. The Commissioner’s
regulations provide that SSA will select a representative payee to receive benefit
payments in certain situations if the agency believes that the interest of a beneficiary
will be served by a representative payment rather than direct payment of benefits.
See 20 C.F.R. §§ 416.601, 416.610 (generally, if a beneficiary is under age 18, the agency
will pay benefits to a representative payee). The term “representative payee” refers
to the receipt of a beneficiary’s Social Security benefits by a third party consistent
with an agreement that the funds will be used for the beneficiary’s current maintenance
and reasonably foreseeable needs. See 20 C.F.R. §§ 416.635, 416.640. The regulations also set forth an order of preference
in who the agency is to select as a representative payee for a beneficiary under age
18, which includes a natural or adoptive parent, a guardian, a relative, a stepparent,
a close friend, and an authorized social agency or custodial institution. See 20 C.F.R. § 416.621(c). Thus, SSA has exclusive authority to select the representative
payee, and here, SSA selected TDFPS to serve in this role. However, the state court
has directed that the attorney ad litem is to receive all of the NH’s SSI payments
and the guardian ad litem is to determine how to disburse the NH’s SSI payments. As
such, the state court has essentially attempted to usurp SSA’s authority by selecting
a different representative payee contrary to federal law giving SSA exclusive authority
to select the representative payee.
Furthermore, the state court is attempting to order TDFPS as to how it should use
the NH’s benefits, which is also contrary to federal law giving representative payees
the discretion to manage the use of a beneficiary’s Social Security benefits. The
Social Security regulations set forth specific responsibilities that the representative
payee must abide by and explain how the representative payee is to use the benefit
payments. See 20 C.F.R. §§ 416.635, 416.640. The regulations require that the representative payee
use his or her discretion in using the benefit payments for the “use and benefit of
the beneficiary” and in the beneficiary’s best interest. See 20 C.F.R. § 416.635; see also POMS GN 00602.001 (a representative payee has the “full right and duty to spend [the benefits] in the
best interest of the beneficiary, according to his/her best judgment.”). The regulations
further provide that the representative payee is presumed to use the benefits properly
if the payments are used for the beneficiaries’ current maintenance. See 20 C.F.R. § 416.640(a). Current maintenance includes costs incurred in obtaining
food, shelter, clothing, medical care, and personal comfort items. Id.
Here, the state court order directing TDFPS, the representative payee, to send the
NH’s SSI payments to the NH’s attorney ad litem conflicts with federal law giving
the responsibility to the representative payee to use discretion in determining the
use of the NH’s benefit payments for the NH’s best interests. See 20 C.F.R. § 416.635 (noting that only the representative payee has the discretion
to determine how to best use Social Security benefits in the beneficiary’s best interest).
Thus, the state court order conflicts with federal law. As noted above, a state court
order cannot supersede federal law. See U.S. Const. Art. VI, cl. 2 (federal supremacy clause prohibits a state court from
imposing its will over federal law). As such, the state court did not have the authority
to order TDFPS, as representative payee, to send the NH’s SSI payments to the NH’s
attorney ad litem or to give the guardian ad litem the authority to determine how
to disburse the SSI payments.
III. Responding to the State Court Order
SSA is not a party to the state court action and has not been served with any legal
process regarding the state court action. You asked for our assistance in helping
TDFPS, as the SSA selected representative payee for the NH, in responding to the state
court order by preparing a letter setting forth the relevant law. We have provided
language in a separate document that you can share with the TDFPS that does not address
the specifics of that case, but that explains controlling federal law, as described
above.
CONCLUSION
The state court order conflicts with federal law in the following ways. The state
court order directs TDFPS to send the NH’s SSI payments to the NH’s attorney ad litem
and gives the NH’s guardian ad litem the authority to make disbursements of the NH’s
SSI payments. This state court order conflicts with the provisions of the Act and
regulations prohibiting the assignment or transfer of Social Security benefits. In
addition, the state court order conflicts with the Act and regulations giving SSA
the exclusive authority to select the representative payee and controlling the rights
and responsibilities of representative payees to use a beneficiary’s Social Security
benefits. We have provided language that you may share with TDFPS setting forth controlling
federal law.
Michael McGaughran
Regional Chief Counsel
By: Una McGeehan
Assistant Regional Counsel