For reversal and remandment -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the Court was delivered by Hall, J.
The question in this case is whether a state welfare agency, which had advanced monthly disability assistance to a person under N.J.S.A. 44:7-38 to -42, may recoup, out of a subsequent, retroactive, lump sum federal social security disability insurance benefits payment to him, an amount representing the duplication of benefits thereby received.
The federal payment in the sum of $1864.20 to defendant Wilkes, the recipient of both sets of benefits, was deposited
and constitutes the balance in a bank account under the name of defendant Philpott (as a matter of convenience only and concededly held in trust for Wilkes) in defendant Fidelity Union Trust Company.*fn1 The state agency, plaintiff Essex County Welfare Board, brought suit in the Essex County Court to reach the bank account for reimbursement from the duplicated federal payments.*fn2 On the return of defendant's motion for summary judgment, it was agreed that the trial court would determine the matter without a jury on a stipulation of facts as if on final hearing. The sparse stipulation*fn3 was designed to present to the court only the basic legal question of whether plaintiff is barred from recovering any amount from the account by reason of a provision of the federal social security law, 42 U.S.C. § 407, which reads:
The right of any person to any future payment under this subchapter [Subchapter II -- Federal Old-Age, Survivors, and Disability Insurance Benefits -- of Chapter 7 -- Social Security -- of Title 42 -- Public Health and Welfare -- of the United States Code]
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.
The trial court held, 104 N.J. Super. 280 (Co. Ct. 1969), that plaintiff was barred from any recoupment as a matter of law by reason of a literal reading of section 407 regardless of the policies and equities involved. The Appellate Division affirmed "essentially for the reasons expressed" in the trial court opinion. 109 N.J. Super. 48 (1970). We granted plaintiff's petition for certification. 56 N.J. 480 (1970).
In August 1966 defendant applied to plaintiff*fn4 for benefits under the state program of assistance, provided for by N.J.S.A. 44:7-38 to -42 and administered by the county welfare boards, to any needy person who has attained the age of 18 but is less than 65 years of age and is permanently and totally disabled by reason of any physical or mental defect, disease or impairment other than blindness.
N.J.S.A. 44:7-39 prescribes that the assistance to be extended under this program shall in all other respects be governed by the provisions of the statutory sections dealing with old age assistance; i.e. assistance to persons who have attained the age of 65 years who lack adequate support, are unable to support themselves and are without relatives or other persons able or willing to support them. See N.J.S.A. 44:7-5. Defendant met all pertinent eligibility requirements.
Assistance to the aged needy, and so to the permanently and totally disabled as well, is granted solely on the basis of and only to the extent of need. N.J.S.A. 44:7-12 states that the county ...