Opinion · Supreme Court of the United States
Philpott v. Essex County Welfare Board
Philpott v. Essex County Welfare Bd., 409 U.S. 413 (1973)
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1973-01-10
- Topic
- bankruptcy
holding that a state could not recover SSDI benefits paid because “the protection afforded by § 407(a) is to ‘moneys paid’ ” | holding that New Jersey may not attach social security benefits to reimburse itself for welfare benefits | holding that § 407 “imposes a broad bar against the use of any legal process to reach all [S]ocial [S]ecurity benefits” | holding that New Jersey may not attach social security benefits to reimburse itself for welfare benefits | holding that § 407 “imposes a broad bar against the use of any legal process to reach all [S]ocial 15 [S]ecurity benefits” | holding that social security benefits paid to beneficiary retained their exempt status pursuant to § 407 so long as the funds were invested such that they remained “readily withdrawable” | holding that the statutory exemption protects benefits held in bank accounts | holding that the statutory exemption protects benefits held in bank accounts | stating that the welfare department’s attempt to attach a welfare recipient’s bank account violated section 407 | explaining that 42 USC 407(a) acts as a “broad bar against the use of any legal process to reach all social security benefits” | noting that section 407 "is broad enough to include all claimants, including a State" | noting that section 407 "is broad enough to include all claimants, including a State" | barring New Jersey welfare agency from imposing lien on welfare recipient's lump sum retroactive federal disability payments to recover previously advanced state funds | concluding section 407 “[o]n its face,” barred a State “from reaching” federal disability payments made to a recipient, and stating “the funds on deposit were readily withdrawable and retained the quality of ‘moneys’ within the purview of [section] 407” | "commingfing of an eamed income credit refund with other funds does not affect the ability to claim the statutory earned income 0 N credit exemption• | barring New Jersey welfare agency from imposing lien on welfare recipient’s lump sum retroactive federal disability payments to recover previously advanced state funds | finding remittance of social security benefits to state governments barred by § 407 | invalidating agreement requiring claimant to assign Social Security 9 payments to a state agency | protecting retroactive social security payments that had been deposited into an account under broad statutory language: "[N]one of the moneys paid or payable ... under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process ....” | interpreting the anti-attachment provision of the Act to bar New Jersey from enforcing agreements with welfare recipients requiring them to assign to the state their retroactive lump-sum social security benefit payments as a means of reimbursing the state for welfare benefits received | payments retain character as protected monies so long as available for use and not converted into permanent investments | “[Section] 407 does not refer to any ‘claim of creditors’; it imposes a broad bar against the use of any legal process to reach all social security benefits” | payments retain character as protected monies so long as available for use and not converted into permanent investments | analogy to veterans benefits exemptions reviewed in Porter should be applied to social security benefits | question of whether state agency can garnish welfare recipient’s Social Security benefits is controlled by federal law | question of whether state agency can garnish welfare recipient's Social Security benefits is controlled by federal law | Social Security Act prohibits state enforcement of reimbursement from retroactive Social Security disability benefits | Social Security funds on deposit retain protection as “ ‘moneys paid’ ” (quoting Social Security Act of 1935, ch. 531, § 208, 49 Stat. 620, 625 (1935)) | funds on deposit “retained the quality of ‘moneys’ within the purview of § 407” | which held that a state may not seek re
Citator
- Authority status
- pending
- Cited by
- 360 opinions
- Distinguished
- 2 times
delivered the opinion of the Court.
Wilkes, 1 one of the petitioners, applied to respondent, one of New Jersey’s welfare agencies, for financial as *414 sistance based upon need by reason of permanent and total disability. As a condition of receiving assistance, a recipient is required by New Jersey law to execute an agreement to reimburse the county welfare board for all payments received thereunder. 2 The purpose apparently is to enable the board to obtain reimbursement out of subsequently discovered or acquired real and personal property of the recipient.
Wilkes applied to respondent for such assistance in 1966 and he executed the required agreement. Respondent determined Wilkes’ monthly maintenance needs to be $108; and, finding that he had no other income, respondent fixed the monthly benefits at that amount and began making assistance payments, no later than January 1, 1967. The payments would have been less if Wilkes had been receiving federal disability insurance benefits under the Social Security Act, and respondent advised him to apply for those federal benefits.
In 1968 Wilkes was awarded retroactive disability insurance benefits under § 223 of the Social Security Act, 70 Stat. 815, as amended, 42 U. S. C. § 423, covering the period from May 1966 into the summer of 1968. Those benefits, calculated on the basis of $69.60 per month for 20 months and $78.20 per month for six months, *415 amounted to $1,864.20. A check in that amount was deposited in the account which Philpott holds as trustee for Wilkes. Under New Jersey law, we are told, the filing of a notice of such a reimbursement agreement has the same force and effect as a judgment. 59 N. J. 75, 80, 279 A. 2d 806, 809.
Respondent sued to reach the bank account under the agreement to reimburse. The trial court held that respondent was barred by the Social Security Act, 49 Stat. 624, as amended, 42 U. S. C. § 407, from recovering any amount from the account. 3 104 N. J. Super. 280, 249 A. 2d 639. The Appellate Division affirmed. 109 N. J. Super. 48, 262 A. 2d 227. . The Supreme Court reversed. 4 59 N. J. 75, 279 A. 2d 806. The case is here on a petition for a writ of certiorari which we granted. 406 U. S. 917.
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: 5 “[N]one of the moneys paid or payable . . . under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process . . . .” The *416 moneys paid as retroactive benefits were “moneys paid . . . under this subchapter”; and the suit brought was an attempt to subject the money to “levy, attachment ... or other legal process.”.
New Jersey argues that if the amount of social security benefits received from the Federal Government had been made monthly, the amount of state welfare benefits could have been reduced by the amount of the federal grant. We see no reason to base an implied exemption from § 407 on that ground. We see no reason why a State, performing its statutory duty to take care of the needy, should be in a preferred position as compared with any other creditor. Indeed, since the Federal Government provides one-half of the funds for assistance under the New Jersey program of disability relief, the State, concededly, on recovery of any sums by way of reimbursement, would have to account to the Federal Government for the latter’s share.
The protection afforded by § 407 is to “moneys paid” and we think the analogy to veterans’ benefits exemptions which we reviewed in Porter v. Aetna Casualty Co., 370 U. S. 159, is relevant here. We held in that case that veterans’ benefits deposited in a savings and loan association on behalf of a veteran retained the “quality of moneys” and had not become a permanent investment. Id., at 161-162.
In the present case, as in Porter, the funds on deposit were readily withdrawable and retained the quality of “moneys” within the purview of § 407. The Supreme Court of New Jersey referred to cases' 6 where a State which has provided care and maintenance to an incompetent veteran at times is a “creditor” for purposes of *417 38 U. S. C. § 3101, and at other times is not. But § 407 does not refer to any “claim of creditors”; it 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.
The New Jersey court also relied on 42 U. S. C. § 404, a provision of the Social Security Act which permits the Secretary to recover overpayments óf old age, survivors, or disability insurance benefits. But there has been no overpayment of federal disability benefits here and the Secretary is not seeking any recovery here. And the Solicitor General, speaking for the Secretary, concedes that the pecuniary interest of the United States in the outcome of this case, which would be its aliquot share of any recovery, is not within the ambit of § 404.
By reason of the Supremacy Clause the judgment below is
Reversed.
The payment in controversy is in a bank account under the name of petitioner Philpott in trust for Wilkes.
N. J. Stat. Ann. §44:7-14 (a) (Supp. 1972-1973) provides: “Every county welfare board shall require, as a condition to granting assistance in any case, that all or any part of the property, either real or personal, of a person applying for old age assistance, be pledged to said county welfare board as a guaranty for the reimbursement of the funds so granted as old age assistance pursuant to the provisions of this chapter. The county welfare board shall take from each applicant a properly acknowledged agreement to reimburse for all advances granted, and pursuant to such agreement, said applicant shall assign to the welfare board, as collateral security for such advances, all or any part of his personal property as the board shall specify.”
Title 42 U. S. C. §407 provides:
“The right of any person to any future payment under this sub-chapter 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.”
Since respondent did not claim a right to the entire federal payment but only to the amount by which its own payments would have been reduced had the federal benefits been received currently rather than retroactively and because the stipulated facts were ambiguous as to when respondent actually began making assistance payments, the court remanded for a determination of the precise amount of respondent’s claim.
Supra, n. 3.
See Savoid v. District of Columbia, 110 U. S. App. D. C. 39, 288 F. 2d 851; District of Columbia v. Reilly, 102 U. S. App. D. C. 9, 249 F. 2d 524. See decision below, 59 N. J. 75, 85, 279 A. 2d 806, 812.