You have asked for advice in resolving an issue which has arisen in the Council Bluffs,
Iowa, Field Office, involving a state court order directing a representative payee
to pay the Social Security benefits he receives on behalf of his daughter into a conservatorship
account of which he is not the conservator. Because the Social Security Administration
(SSA) was not ordered to pay benefits to someone other than the representative payee
and because SSA was not made a party to the action, SSA has no legal standing to intercede
in this matter. We will, however, provide you with a letter that can be forwarded
to Mr. P~ which may assist his attorney in further legal action.
Factual Background
The materials you sent us with your request include a court order filed August 2,
1999, from Judge James R~ of the Fourth Judicial District of Iowa in the District
Court of Iowa in and for Pottawattamie County. His order asserts the following pertinent
facts: Kasey L. P~ was born April 23, 1987. Her biological parents are Ronald S. P~
and Sandra J. P~. Ronald and Sandra were divorced on April 23, 1993. Kasey was the
only child of the marriage. The divorce decree awarded the parties joint custody with
primary physical care remaining with Sandra. Sandra died on February 21, 1999, and
Ronald asserted his authority as biological father of Kasey and petitioned for custody.
His petition was granted and Kasey was returned to Ronald, presumably from Kasey's
maternal grandmother, Adeline G~.
On March 9, 1999, Adeline G~ filed a petition for grandparent visitation and a petition
asking the court to appoint her as guardian and conservator for Kasey. Ronald agreed
to a visitation schedule but contested the guardianship and conservatorship.
In its August 2, 1999 order, Judge R~ held that the parent-child relationship would
best be served if Kasey remained in Ronald's care and custody. He gave Adeline G~
generous visitation rights and named her conservator for Kasey. In addition, Judge
R~ ordered that "all social security checks shall be paid into the conservatorship."
He further ordered that:
the conservator shall pay from the conservatorship funds for Kasey's music lessons,
dance lessons, any medical care related to her asthma or other medical needs, including
medications, physicians and any other medical or dental care required by the child
without the necessity of any prior court approval. Any other payments for the minor
child shall only be after application to this court and court approval. . . [T]he
parties shall take whatever steps are necessary to assure that all future social security
checks or any other income received on behalf of the minor child shall be paid into
the conservatorship.
In re the Guardianship and Conservatorship of Kasey L. P~, Probate No. 35310, Equity
No. 76533 (D. Iowa August 2, 1999).
On August 4, 1999, Ronald P~ wrote a letter to SSA informing SSA of the court decision
and his concern about releasing Kasey's benefits to the conservatorship. He stated
that it was his belief that it was SSA's decision as to who would be Kasey's payee.
On August 18, 1999, Ronald P~, through his attorney, filed a Motion to Amend, Enlarge
and/or Modify Order. He alleged, among other things, that all future Social Security
checks are intended for Kasey's daily needs and that he was in a better position to
understand and account for Kasey's daily needs than the named conservator. He further
informed the court that Kasey's Social Security benefits were to be used for her daily
needs first, then if any money was left over, it was acceptable for the money to be
saved. He asked for modification of the court's order to reflect these changes.
In response, on October 20, 1999, Judge R~ filed an order declining to modify his
prior order as it related to Kasey's survivor benefits from Social Security. He ordered
that the benefits should be paid to the conservatorship as previously indicated, and
stated that he "believe[d] that Ronald S. P~ should not be the named payee of these
funds." He stated that the parties should make the necessary arrangements for the
conservator, Adeline G~, to be named payee of these funds.
In an undated letter, Ronald P~ notified SSA of the court's October 20, 1999 order.
He expressed uncertainty as to how to proceed because the court directed money from
the survivor's benefits be paid for items other then Kasey's daily needs which conflicted
with his interpretation of his duties as a representative payee. He risked contempt
charges, however, if he did not follow the court's order. He stated that he did not
have the finances to appeal the matter further.
In a memorandum to you dated November 4, 1999, the Council Bluffs, Iowa, Field Office
stated that Ronald P~ had asked SSA to intercede in this matter. The Field Office
stated that they had dealt with Mr. P~ on a professional level as director of a local
residential facility. They had no reason to question his suitability to continue as
representative payee for his daughter, Kasey.
In a letter dated January 30, 2000, Ronald P~ asked that Kasey's benefits be suspended.
He indicated that he was returning unused benefits to SSA pending resolution of the
conflict between Federal programs and the State of Iowa District Court.
Per my conversation with you on March 1, 2000, SSA records show that Kasey is in current
pay status and no checks have been returned.
Analysis
Section 207(a)
Section 207(a) of the Social Security Act (the Act), 42 U.S.C. § 407, states:
(a) 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.
Id. See also 20 C.F.R. § 404.1820 (1999). Section 207(a) applies to funds which have not yet
been paid as well as to funds which have been disbursed. Therefore, under the Act,
Social Security benefits are not assignable, transferable, or subject to legal process.
Federal courts have generally interpreted the language of section 207 broadly, and
have found violations of section 207 when attempts have been made to secure Social
Security benefits from beneficiaries and representative payees. See, e.g., 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); Finberg v. Sullivan, 634 F.2d 50, 63 (3d Cir. 1980) (holding that bank accounts may not be attached without
regard to whether they contain Social Security funds); 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).
A number of courts have held that a state may not compel contribution of Social Security
benefits or Supplemental Security Income benefits from involuntarily institutionalized
persons. See, e.g., Crawford v. Gould, 56 F.3d 1162 (9th Cir. 1995) (involuntarily institutionalized psychiatric patients'
Social Security benefits were beyond the reach of state's attempt to recover the expense
of institutional care); King v. Schafer, 940 F.2d 1182 (8th Cir. 1991) (Missouri officials barred from threatening legal action
to recover the costs of institutional care of mental patients from Social Security
benefits); Brinkman v. Rahm, 878 F.2d 263 (9th Cir. 1989) (mental patients' federal benefits were exempt from
collection by state of Washington).
Federal courts in the Second Circuit have held, however, that voluntary use of Social
Security benefits to pay for the costs of institutional care does not violate section
207. See Fetterusso v. New York, 989 F.2d 322, 328 (2d Cir. 1990) (voluntary use of Social Security benefits to pay
for the costs of institutional care for individuals committed upon findings of not
guilty by reason of mental illness does not violate the anti-alienation statute);
Johnson v. Wing, 12 F. Supp.2d 311, 315-16 (S.D. N.Y. 1998) (practice of requiring resident of emergency
housing to contribute a portion of her Supplemental Security Income benefits towards
costs of her upkeep at the facility did not violate section 207 where the resident
voluntarily agreed to her placement under the terms and conditions as they were explained
to her which included contribution of a portion of benefits).
Furthermore, "or other legal process" has been held to encompass not only the use
of formal legal machinery, but also "resort to express or implied threats and sanctions."
Fetterusso v. New York, 898 F.2d 322, 328 (2d Cir. 1990). See also King v. Schafer, 940 F.2d 1182, 1185 (8th Cir. 1991), cert. denied, Crytes v. Schafer, 502 U.S. 1095 (1992) ("Other legal process" includes a threat to sue representative
payees or to withhold state income tax refunds); Kriegbaum v. Katz, 909 F.2d 70 (2d Cir. 1990) (New York's attempts to secure use of insanity acquittees'
Social Security benefits to defray cost of institutional care through special proceedings
was "legal process" against benefits which was prohibited by the Social Security Act).
In Philpott v. Essex County Welfare Board, 409 U.S. 413 (1973), the United States Supreme Court stated that section 207 "imposes
a broad bar against the use of any legal process to reach all social security benefits.
That is broad enough to include all claimants, including a State." Id. at 417.
The above analysis of existing case law shows how conscientiously courts have followed
section 207. We believe Judge R~'s order can be construed as assigning or transferring
Kasey's Social Security payments to another. Judge R~ ordered Ronald P~ to pay Kasey's
benefits to the conservatorship, but he is not the conservator and has no control
over the funds. Furthermore, a court order clearly constitutes "legal process." As
a result, we believe Judge R~'s order violates section 207. However, because SSA was
not ordered to pay the benefits to the conservatorship and SSA was not made a party
to the state court civil action, SSA does not have a legal position to ask the court
to reconsider its order. If any court action is taken, it should be taken by Ronald
P~.
Representative Payment
Judge R~'s order also raises issues regarding representative payment. If Ronald P~
complies with the court order, he may violate his duties as a representative payee.
The Federal regulations governing the responsibilities of a representative payee provide:
A representative payee has a responsibility to -
(a) Use the payments he or she receives only for the use and benefit of the beneficiary
in a manner and for the purposes he or she determines, under the guidelines in this
subpart, to be in the best interests of the beneficiary. . .
20 C.F.R. § 404.2035 (1999). The regulations further provide:
We will consider that payments we certify 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. Current maintenance includes cost incurred in obtaining food,
shelter, clothing, medical care, and personal comfort items.
20 C.F.R. § 404.2040(a) (1999). After the representative payee has used the benefit
payments in accordance with the regulations, any remaining amount shall be conserved
or invested on behalf of the beneficiary. 20 C.F.R. § 404.2045(a)(1999). SSA's obligation
to the beneficiary is "completely discharged" when a correct payment is made to a
representative payee on behalf of the beneficiary. The payee in his or her personal
capacity (and not SSA) may be liable if the payee misuses the beneficiary's benefits.
20 C.F.R. § 404.2041 (1999). A representative payee is accountable for the use of
benefits, however, and SSA may require periodic accounting reports. 20 C.F.R. § 404.2065
(1999).
Ronald P~ has no control over Kasey's Social Security benefits once he releases them
to the conservatorship. Therefore, it appears that he is unable to fulfill his responsibility
to use the payments for the "use and benefit" of Kasey in a manner he determines to
be in Kasey's best interest.
Although SSA's obligation is discharged when a correct payment is made to a representative
payee on behalf of the beneficiary, SSA is responsible for ascertaining that Ronald
P~ is using the Social Security payments for Kasey's benefit. If the court order precludes
him from fulfilling this responsibility, it may be appropriate to select another representative
payee.
Conclusion
We realize that the question of whether there has been a violation of section 207
is a federal question. However, because SSA was not required to pay Kasey's Social
Security payments directly to the conservatorship, and because SSA was not otherwise
made a party to the state court civil action, SSA does not have standing to challenge
Judge R~'s order. We are not in a legal position to ask the court to reconsider its
order or to appeal the order. If any court action is to be taken, it should be taken
by Ronald P~, the person subject to the court's order.
SSA's responsibility for protecting benefits against legal process and assignment
ends when the beneficiary is paid. Once the benefits are paid, however, they continue
to be protected under section 207 as long as they are still identifiable as Social
Security payments. If a beneficiary is ordered to pay his or her benefits to someone
else, or his or her benefits are taken by legal process, section 207 can be used as
a personal defense against such actions.
In addition, SSA is responsible for ascertaining that Ronald P~, as representative
payee, is using the Social Security payments for Kasey's benefit. If, by virtue of
the court order, he is not able to do so, it may be appropriate to select another
representative payee.
We are providing you with the attached letter to send to Mr. P~. The letter advises
him of SSA's position regarding section 207 of the Act and explains the legal analysis
involved in this issue.
Frank V. S~ III
Acting Regional Chief Counsel, Region VII
By ______________
Rhonda J. W~
Assistant Regional Counsel
EnclosureDear Mr. P~:
You have asked the Social Security Administration (SSA) to intercede on your behalf
in contesting a court order filed August 2, 1999, by Judge James R~ of the Fourth
Judicial District of Iowa in the District Court of Iowa in and for Pottawattamie County.
In this order, Judge R~ gave you custody of Kasey, but named Adeline G~ as conservator,
and ordered you to pay Kasey's Social Security benefits into the conservatorship.
You filed a Motion to Amend, Enlarge and/or Modify Order on August 18, 1999, asking
for modification of the Judge's order regarding, among other things, his requirement
that Kasey's Social Security benefits by paid to the conservatorship; however, Judge
R~ declined to modify his order in this regard.
Because SSA was not ordered to pay benefits to someone other that the representative
payee and because SSA was not made a party to the action, SSA has no legal standing
to intercede in this matter. This letter is to advise you of SSA's position regarding
the transfer and assignment of Social Security benefits by legal process. You may
provide this letter to your attorney to assist you in further legal action.
Section 207(a)
Section 207(a) of the Social Security Act (the Act), 42 U.S.C. § 407, states:
(a) 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.
Id. See also 20 C.F.R. § 404.1820 (1999). Section 207(a) applies to funds which have not
yet been paid as well as to funds which have been disbursed. Therefore, under the
Act, Social Security benefits are not assignable, transferable, or subject to legal
process.
Federal courts have generally interpreted the language of section 207 broadly, and
have found violations of section 207 when attempts have been made to secure Social
Security benefits from beneficiaries and representative payees. See, e.g., 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); Finberg v. Sullivan, 634 F.2d 50, 63 (3d Cir. 1980) (holding that bank accounts may not be attached without
regard to whether they contain Social Security funds); 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).
A number of courts have held that a state may not compel contribution of Social Security
benefits or Supplemental Security Income benefits from involuntarily institutionalized
persons. See, e.g., Crawford v. Gould, 56 F.3d 1162 (9th Cir. 1995) (involuntarily institutionalized psychiatric patients'
Social Security benefits were beyond the reach of state's attempt to recover the expense
of institutional care); King v. Schafer, 940 F.2d 1182 (8th Cir. 1991) (Missouri officials barred from threatening legal
action to recover the costs of institutional care of mental patients from Social Security
benefits); Brinkman v. Rahm, 878 F.2d 263 (9th Cir. 1989) (mental patients' federal benefits were exempt from
collection by state of Washington).
Federal courts in the Second Circuit have held, however, that voluntary use of Social
Security benefits to pay for the costs of institutional care does not violate section
207. See Fetterusso v. New York, 989 F.2d 322, 328 (2d Cir. 1990) (voluntary use of Social Security benefits to pay
for the costs of institutional care for individuals committed upon findings of not
guilty by reason of mental illness does not violate the anti-alienation statute);
Johnson v. Wing, 12 F. Supp.2d 311, 315-16 (S.D. N.Y. 1998) (practice of requiring resident of emergency
housing to contribute a portion of her Supplemental Security Income benefits towards
costs of her upkeep at the facility did not violate section 207 where the resident
voluntarily agreed to her placement under the terms and conditions as they were explained
to her which included contribution of a portion of benefits).
Furthermore, "or other legal process" has been held to encompass not only the use
of formal legal machinery, but also "resort to express or implied threats and sanctions."
Fetterusso v. New York, 898 F.2d 322, 328 (2d Cir. 1990). See also King v. Schafer, 940 F.2d 1182, 1185 (8th Cir. 1991), cert. denied, Crytes v. Schafer, 502 U.S. 1095 (1992) ("Other legal process" includes a threat to sue representative
payees or to withhold state income tax refunds); Kriegbaum v. Katz, 909 F.2d 70 (2d Cir. 1990) (New York's attempts to secure use of insanity acquittees'
Social Security benefits to defray cost of institutional care through special proceedings
was "legal process" against benefits which was prohibited by the Social Security Act).
In Philpott v. Essex County Welfare Board, 409 U.S. 413 (1973), the United States Supreme Court stated that section 207 "imposes
a broad bar against the use of any legal process to reach all social security benefits.
That is broad enough to include all claimants, including a State." Id. at 417.
The above analysis of existing case law shows how conscientiously courts have followed
section 207. We believe Judge R~'s order can be construed as assigning or transferring
Kasey's Social Security payments to another. Judge R~ ordered you to pay Kasey's benefits
to the conservatorship, but you are not the conservator and have no control over the
funds. Furthermore, a court order clearly constitutes "legal process." As a result,
we believe Judge R~'s order violates section 207. However, because SSA was not ordered
to pay the benefits to the conservatorship and SSA was not made a party to the state
court civil action, SSA does not have a legal position to ask the court to reconsider
its order. If any court action is taken, it should be taken by you.
Representative Payment
Judge R~'s order also raises issues regarding representative payment. If you comply
with the court order, you may violate your duties as a representative payee.
The Federal regulations governing the responsibilities of a representative payee provide:
A representative payee has a responsibility to -
(a) Use the payments he or she receives only for the use and benefit of the beneficiary
in a manner and for the purposes he or she determines, under the guidelines in this
subpart, to be in the best interests of the beneficiary. . .
20 C.F.R. § 404.2035 (1999). The regulations further provide:
We will consider that payments we certify 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. Current maintenance includes cost incurred in obtaining food,
shelter, clothing, medical care, and personal comfort items.
20 C.F.R. § 404.2040(a) (1999). After the representative payee has used the benefit
payments in accordance with the regulations, any remaining amount shall be conserved
or invested on behalf of the beneficiary. 20 C.F.R. § 404.2045(a)(1999). SSA's obligation
to the beneficiary is "completely discharged" when a correct payment is made to a
representative payee on behalf of the beneficiary. The payee in his or her personal
capacity (and not SSA) may be liable if the payee misuses the beneficiary's benefits.
20 C.F.R. § 404.2041 (1999). A representative payee is accountable for the use of
benefits, however, and SSA may require periodic accounting reports. 20 C.F.R. § 404.2065
(1999).
You have no control over Kasey's Social Security benefits once you release them to
the conservatorship. Therefore, it appears that you may be unable to fulfill your
responsibility to use the payments for the "use and benefit" of Kasey in a manner
you determine to be in Kasey's best interest.
Although SSA's obligation is discharged when a correct payment is made to a representative
payee on behalf of the beneficiary, SSA is responsible for ascertaining that you are
using the Social Security payments for Kasey's benefit. If the court order precludes
you from fulfilling this responsibility, it may be appropriate to select another representative
payee.
Conclusion
We realize that the question of whether there has been a violation of section 207
is a federal question. However, because SSA was not required to pay Kasey's Social
Security payments directly to the conservatorship, and because SSA was not otherwise
made a party to the state court civil action, SSA does not have standing to challenge
Judge R~'s order. We are not in a legal position to ask the court to reconsider its
order or to appeal the order. If any court action is to be taken, it should be taken
by you, the person subject to the court's order.
SSA's responsibility for protecting benefits against legal process and assignment
ends when the beneficiary is paid. Once the benefits are paid, however, they continue
to be protected under section 207 as long as they are still identifiable as Social
Security payments. If a beneficiary is ordered to pay his or her benefits to someone
else, or his or her benefits are taken by legal process, section 207 can be used as
a personal defense against such actions.
In addition, SSA is responsible for ascertaining that you, as representative payee,
are using the Social Security payments for Kasey's benefit. If, by virtue of the court
order, you are not able to do so, it may be appropriate to select another representative
payee.
We hope this letter will be of assistance to you.