DCL-00-103, Attachment of Social Security Benefits

DCL-00-103 OCT 6, 2000

TO: ALL STATE IV-D DIRECTORS

RE: Attachment of Social Security Benefits

Dear Colleague:

With the widespread implementation of Financial Institution Data Match programs, lien and levy activity has increased. We have received numerous inquiries regarding the attachment of funds originating as Social Security benefits. To assist States and financial institutions in determining their obligations regarding actions taken against Social Security funds, we are providing the following answers to frequently asked questions on this subject.

Question: Are Social Security Disability benefits attachable for child support purposes?

Answer: Yes. Generally, Social Security Disability (SSD) payments under Title II of the Social Security Act (the Act) are not subject to attachment or other legal process, pursuant to section 207(a) of the Act (42 U.S.C. 407(a)). No other provision of law can override this protection "except to the extent that it does so by express reference to this section." Section 207(b) of the Act, 42 U.S.C. 407(b).

SSD benefits are attachable for child support purposes, because section 207 of the Act is expressly overridden by section 459(a) of the Act (42 U.S.C. 659(a)). Section 459 provides that payments from the Federal government, the entitlement to which is based upon remuneration for employment, are subject to income withholding or other legal process brought by a State IV-D agency or an individual obligee for purposes of enforcing child support obligations. Section 459(h)(1)(A)(ii)(I) of the Act (42 U.S.C. 659(h)(1)(A)(ii)(I)) specifies that payments under Title II of the Act, which includes SSD payments, are considered to be based upon remuneration for employment. In addition, federal regulations governing federal personnel at 5 C.F.R. 581.103(c)(1) specify that SSD is attachable for child support purposes.

SSD funds can be attached to satisfy child support obligations even if the support entitlement has been assigned to the State. The assignment does not change the nature of the debt, only the payee. See, Knickerbocker v. Norman, 938 F.2d 891 (8^th Cir., Iowa,1991), Shepherd v. Shepherd, 467 N.W.2d 237 (Iowa 1991).

Question: Are Supplemental Security Income benefits attachable for child support purposes?

Answer: No. The provisions of section 207(a) of the Act (42 U.S.C. 407(a)), prohibiting attachment of benefits, are specifically made applicable to Supplemental Security Income (SSI) benefits pursuant to section 1631(d)(1) of the Act (42 U.S.C. 1383(d)). Federal regulations at 5 CFR 581.104(j) also specify that SSI benefits are not subject to garnishment. In addition, section 459 of the Act (42 U.S.C. 659), which overrides section 207 of the Act, provides that only benefits which are based upon remuneration for employment are subject to legal process for child support enforcement. Supplemental Security Income (SSI) payments are not based upon remuneration for employment; rather, they are provided based on need. Some courts have held that SSI is a form of public assistance, intended to protect the individual recipient from poverty. See, Becker County Human Servs. Re Becker County Foster Care v. Peppel, 493 N.W.2d 573 (Minn. App. 1992), Tennessee Dept. of Human Servs ex rel Young v. Young, 802 S.W.2d 594 (Tenn. 1990). SSI payments are not included as moneys subject to process in section 459(h) of the Act.

(Some courts have held that, although SSI payments can not be attached through legal process for the enforcement of child support obligations, they can be considered income for purposes of calculating the child support obligation. See, Davis v. Office of Child Support Enforcement, 5 S.W.3d 58 (Ark. App. 1999), Commonwealth ex rel. Morris v. Morris, 984 S.W.2d 840 (Ky. 1998), reh. denied 2/18/99, Whitmore v. Kenney, 626 A.2d 1190 (Pa. Super. 1993).)

Question: When SSI benefits are paid into a bank account, do they retain their character as protected benefits?

Answer: Yes. The U.S. Supreme Court has held that Social Security funds deposited into a bank account "retained the quality of 145moneys’ within the purview of section 407[.]" Philpott v. Essex County Welfare Bd., 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973). Courts have also held that the funds remain exempt from legal process even if they are commingled in a bank account with other funds, so long as they are reasonably traceable to Social Security. NCNB Fin. Servs. V. Shumate, 829 F.Supp. 178 (W.D. Va. 1993), affd. 45 F.3d 427, cert. Denied 115 S.Ct. 2616. Since the prohibition on the attachment of SSI payments is based on the same statutory provisions as apply to Social Security, i.e. section 207 of the Act (42 U.S.C. 407), the reasoning in these cases would apply equally to SSI payments.

I hope that this is helpful to you. Thank you for your continued efforts on behalf of America’s children.

Sincerely,

David Gray Ross
Commissioner
Office of Child Support Enforcement