Philpott v. Essex County Welfare Board

Citation34 L.Ed.2d 608,93 S.Ct. 590,409 U.S. 413
Decision Date10 January 1973
Docket NumberNo. 71-5656,71-5656
PartiesDoris PHILPOTT and William Wilkes, Petitioners, v. ESSEX COUNTY WELFARE BOARD
CourtUnited States Supreme Court
Syllabus

A Social Security Act provision, 42 U.S.C. § 407, which prohibits subjecting federal disability insurance benefits and other benefits to any legal process bars a State from recovering such benefits retroactively paid to a beneficiary, and in this case no exception can be implied on the ground that if the federal payments had been made monthly there would have been a corresponding reduction in the state payments. Pp. 415—417.

59 N.J. 75, 279 A.2d 806, reversed.

George Charles Bruno, Newark, N.J., for petitioners.

Ronald Reichstein, Montclair, N.J., for respondent.

Mr. Justice DOUGLAS 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- 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 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, 92 S.Ct. 1779, 32 L.Ed.2d 115.

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 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 and Surety Co., 370 U.S. 159, 82 S.Ct. 1231, 8 L.Ed.2d 407, 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, 82 S.Ct., at 1232.

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 cases6 where a State which has provided care and maintenance to an incompetent veteran at times is a 'creditor' for purposes of 38 U.S.C. § 3101, and at other times is not. But § 407 does not refer to any 'claim of creditors'; it imposes a...

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    • United States
    • United States Courts of Appeals. United States Court of Appeals (3rd Circuit)
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    ...lump-sum rule, such as retroactive Social Security benefits, are not subject to reimbursement. See Philpott v. Essex County Welfare Board, 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973) (Social Security Act prohibits state enforcement of reimbursement from retroactive Social Security dis......
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    ...in reimbursement of amounts granted under state welfare laws violated this Court's decision in Philpott v. Essex County Welfare Board, 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608 (1973). The District Court agreed, and while it denied retroactive relief against the State on the basis of Edelm......
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    ...407; 45 U.S.C. § 231m(a); and 38 U.S.C. § 1301(a), respectively. 68. ERISA § 2(b) (emphasis added). 69. ERISA § 2(a) (emphasis added). 70. 409 U.S. 413,93 S.Ct. 590 (1973). 71. Id. at 417. 72. 370 U.S. 159, 82 S.Ct. 1231 (1962). 73. 439 U.S. 572, 99 S.Ct. 802 (1979). 74. See, note 67, supra......
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