Mr. P~ contacted our office for advice about handling a request by a juvenile court
to be selected representative payee for a student beneficiary, Charles C~. He indicated
that, as a result of your investigation, he considers Mr. C~ capable of managing his
benefit payments and, therefore, he intends to authorize payment directly him. The
information provided in this memorandum is intended to assist you in answering inquiries
from the juvenile court in connection with your office's determination that Mr. C~
does not require a representative payee.
BACKGROUND
Mr. P~ stated that Charles C~ is entitled to child's insurance benefits as a full-time
student. He submitted a copy of a court order from Judge F~ of the Juvenile Court
Division of the Common Pleas Court, Cuyahoga County, Ohio dated January 28, 2002.
In that order, which does not name the Social Security Administration as a party,
the judge order the Cuyahoga County Juvenile Court to apply to be selected as representative
payee to receive Mr. C~ social security benefits on his behalf. The order further
stated, "The Cuyahoga Juvenile Court is to remain representative payee of child's
Social Security benefit until child is terminated from placement and the Social Security
Administration receives a written termination letter from the Court's fiscal Review
Officer. The Social Security Administration is to begin this action forthwith." Mr.
C~ has been placed at Glen Mills Schools pursuant to the court's order, but he has
not been adjudged incompetent.
In a telephone conversation with the undersigned, Mr. C~ indicated that the juvenile
court had, in fact, filed an application to be selected as representative payee. Mr.
P~ stated that, based on his investigation, he believed Mr. C~ was capable of administering
his own funds and he was inclined to authorize payment directly to Mr. C~ rather than
appoint a representative payee.
DISCUSSION
Although the language of the court's order appears to direct SSA to select the Cuyahoga
Juvenile Court as Mr. C~ representative payee, the state court does not have jurisdiction
over SSA and, therefore, does not have the power to order SSA to make a particular
representative payee selection. Your determinations as to whether Mr. C~ needs a representative
payee and, if so, who should be selected as his representative payee are governed
by SSA regulations. The following information is intended to assist you in answering
any inquiries from the Cuyahoga Juvenile Court.
The Social Security Act requires SSA, a federal agency, to determine whether an individual
requires a representative payee, and, if so, to designate the party to serve as the
payee. The designation of payees to receive benefits payable under Title II of the
Social Security Act is made pursuant to §205(j)(1)(a) of the Social Security Act,
42 U.S.C. § 405(j)(1)(a). That section provides:
If the Commissioner of Social Security determines that the interest of any individual
under this title would be served thereby, certification of payment of such individual's
benefit under this title may be made, regardless of legal competency or incompetency
of the individual, either for direct payment to the individual, or for his or her
use and benefit, to another individual, or an organization, with respect to whom the
requirements of paragraph (2) have been met (hereinafter in this subsection referred
to as the individual's "representative payee").
42 U.S.C. § 405(j)(1)(A). Thus, SSA may, but is not required to, appoint a representative
payee for a beneficiary who has not been found incompetent by a court of law.
Paragraph (2) of that section provides:
Any certification made under paragraph (1) for payment of benefits to an individual's
representative payee shall be made on the basis of --
(i) an investigation by the Commissioner of Social Security of the person to serve
as representative payee, which shall be conducted in advance of such certification
and shall, to the extent practicable, include a face-to-face interview with such person,
and
(ii) adequate evidence that such certification is in the interest of such individual
(as determined by the Commissioner of Social Security in regulations
42 U.S.C. § 405(j)(2)(A).
Pursuant to these provisions of the Act and the implementing regulations (20 C.F.R.
§§ 404.2001-404.2065), SSA (1) determines whether a representative payee is required
for a beneficiary; and (2) if a representative payee is required, selects the individual
or organization it determines to be in the best position to serve as representative
payee in the interest of the beneficiary and disburses the benefits on his or her
behalf.
Payments certified to a representative payee must be applied only for the "use and
benefit" of the beneficiary, i.e., for those purposes which will serve the beneficiary's
best interest, taking into account the beneficiary's individual requirements and particular
circumstances. The beneficiary must derive some advantage or satisfaction from the
expenditures made by the representative payee. SSA advises each individual appointed
as a representative payee of the proper use of such benefits in accordance with the
SSA regulations. Once a representative payee is appointed by SSA, SSA holds that representative
payee responsible for disbursing benefits in the best interest of the beneficiary.
Under the regulations, SSA will pay benefits to a representative payee on behalf of
a beneficiary age 18 or older if SSA finds that representative payment will be in
the beneficiary's interest. 20 C.F.R. § 404.2010(a). SSA will generally appoint a
representative payee when the beneficiary is legally incompetent or mentally incapable
of managing his benefits or when the beneficiary is physically incapable of managing
or directing the management of his or her benefit payments. 20 C.F.R. § 404.2010(a).
In determining whether to appoint a representative payee, SSA considers whether a
court has found the beneficiary legally incompetent, whether medical evidence indicates
the beneficiary is capable of managing or directing the management of his benefit
payments, and other evidence, such as statements from relatives, friends, and others
in a position to know and observe the beneficiary. 20 C.F.R. § 404.2015. Only after
SSA determines that a beneficiary needs a representative payee, will it select a representative
payee. In selecting a representative payee, SSA will consider the following types
of information: (1) the beneficiary's relationship to the potential representative
payee, if any; (2) the amount of interest that the potential representative payee
shows in the beneficiary; (3) any legal authority the potential representative payee
has to act on the beneficiary's behalf; (4) whether the potential representative payee
has custody of the beneficiary; and (5) whether the potential representative payee
is likely to know of beneficiary's needs and look after those needs. 20 C.F.R. § 404.2020.
Thus, the fact that a person or government entity may have custody of a beneficiary
is relevant only if SSA determines that the beneficiary needs a representative payee,
i.e., he is unable to manage or direct management of his benefit payments. The regulations
set forth an order of preference in selecting a representative payee. 20 C.F.R. §
404.2021. The order of preference, however, is flexible to accommodate SSA's desire
to select the payee who will best serve the beneficiary's interests. 20 C.F.R. § 404.2021.
A State court lacks 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. The pertinent statutory and regulatory authorities
are cited above, and they provide that the Commissioner of Social Security has the
discretion and authority to designate a representative payee. See McGrath v. Weinberger, 541 F.2d 249 (10th Cir. 1976), cert. denied, 430 U.S. 933 (1977). A copy of the
McGrath decision is enclosed.
Social Security benefits are exempted from any legal process by section 207(a) of
the Social Security Act, 42 U.S.C. § 407(a). That section provides:
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 to the operation of any bankruptcy or insolvency law. (emphasis
added)
The exemption provisions of section 207(a) of the Act were construed by the United
States Supreme Court in Philpott v. Essex County Welfare Board, 409 U.S. 413 (1973). A copy of the Philpott decision is enclosed. In Philpott, the
Court held that benefits paid under Title II of the Social Security Act were exempt
from the reimbursement claims of a State agency for assistance furnished. The Court
stated:
On its face, the Social Security Act in § 407 bars the State of New Jersey from reaching
the federal disability payments paid to Wilkes. The language is all inclusive: "[N]one
of the moneys paid or payable . . . under this subchapter shall be subject to execution,
levy, attachment, garnishment, or other legal process . . . ." The moneys paid as
retroactive benefits were "money's paid . . . under this subchapter," and the suit
brought was an attempt to subject the money to "levy, attachment . . . or other legal
process."
Philpott, 409 U.S. at 415-16. The United States Supreme Court reversed the New Jersey
Supreme Court on the basis of the Supremacy Clause of the Constitution.
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 situation
it has not. See United States v. Sherwood, 312 U.S. 584 (1941). Hence, even if the State court designates a representative
payee, or attempts to direct the disposition of past conserved benefits, the Agency
would not be bound by such a determination or order.
CONCLUSION
We conclude that the SSA is not required to select the Cuyahoga County Juvenile Court
as Mr. C~ representative payee, despite the January 28, 2002 order of the Common Pleas
Court of Cuyahoga County, Ohio. The information provided in this memorandum, and the
enclosures, are intended to assist you in answering any inquiries the court may have.
Sincerely,
Thomas W. C~
Regional Chief Counsel
By:_______________________
Nancy L. B~
Assistant Regional Counsel