April 9, 2010
BARBARA FORT-HOLLSTEIN, PLAINTIFF-RESPONDENT,
RALPH HOLLSTEIN, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Essex County, Docket No. FM-07-873-94.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted March 8, 2010
Before Judges Rodríguez, Reisner and Yannotti.
The Monmouth County Division of Social Services (MCDSS) appeals from orders entered by the Family Part on June 12, 2009, June 19, 2009, and July 24, 2009, which required the MCDSS to pay plaintiff $7,935. We reverse.
This appeal arises from the following facts. The parties were married in June 1987. One child was born of the marriage. The parties were divorced by a judgment entered by the trial court on February 28, 1995. The judgment provided, among other things, that the parties would have joint custody of the child and defendant would pay child support in the amount of $300 per week, based on his earnings of $65,000 per year and plaintiff's earnings of $24,000.
In 2006, defendant was diagnosed with certain illnesses, which rendered him incapable of working. He was laid off by both of the firms for which he worked. Defendant applied to the MCDSS for assistance under the Work First New Jersey/General Assistance Program. He also applied to the Social Security Administration (SSA) for social security disability (SSD) and supplemental security income (SSI) benefits. In October 2006, defendant signed an agreement to repay the MCDSS with the initial payment of SSI benefits and authorized the SSA to pay those monies directly to the MCDSS.
In May 2007, the trial court entered an order requiring defendant's child support payments to be made through the Essex County Probation Department (ECPD). The order noted that defendant was receiving public assistance and his social security claims were pending. The court entered another order on March 3, 2008, which again provided that the support payments would be made through the ECPD. The order additionally stated that if defendant were "successful in obtaining social security benefits and receives a lump sum payment from the [SSA]," defendant must turn over the payment to the ECPD "immediately[.]"
In May 2008, defendant filed a motion in the trial court seeking a modification of his child support obligation. Defendant also sought a stay of the enforcement of his child support and arrears obligation. In a supporting certification, defendant said that his illnesses precluded him from working. He was receiving general assistance and food stamps from the MCDSS. Defendant's application for social security benefits had been denied and he was pursuing an appeal. Defendant stated that his child support arrears totaled $53,000.
The Family Part filed an order dated June 13, 2008, suspending defendant's child support obligation. The court ordered defendant to provide the court and plaintiff with a monthly status report concerning the appeal from the denial of his application for social security benefits. The order further provided that defendant's attorney must inform the court immediately upon receipt of any disability payment, so that the matter could be re-opened for review.
In June 2008, the SSA informed defendant that he had been awarded SSD benefits. The past-due SSD benefits from August 2006 through May 2008 totaled $40,562, from which counsel fees of $5,300 were deducted for the attorneys who handled the social security appeal. The parties' child was awarded $10,015 in retroactive support. In addition, in July 2008, the SSA informed defendant that he had been awarded SSI benefits. The retroactive SSI benefits totaled $7,935.
Defendant's attorney informed the court of the SSD determination. In July 2008, defendant was notified that the retroactive SSI award had been paid directly to the MCDSS and applied as partial repayment for the $14,230 that defendant had received in assistance payments.
The court filed an order dated August 1, 2008, which noted that plaintiff had received the benefits that had been awarded to the parties' child. The order provided that $2,000 of that sum shall be paid to defendant. The order further provided that the retroactive SSD benefits of $40,562 must be paid to plaintiff.
On October 6, 2008, plaintiff filed a motion to enforce litigant's rights, arguing that the SSA had paid the past-due benefits to defendant and she had not received the monies due to her. The court entered an order dated December 5, 2008, which required the MCDSS to pay plaintiff the $7,935 it had received from the SSA. The order stated that the court had previously ordered that all of the retroactive SSD benefits be paid to plaintiff for child support arrears.
Thereafter, plaintiff filed a motion to enforce the December 5, 2008 order. Plaintiff asserted that the MCDSS had not complied with the order. The court entered an order dated June 12, 2009, which stated that "welfare" was required to pay plaintiff $7,935 before any reimbursement for assistance payments made to defendant. The court issued an amended order dated June 19, 2009, which stated in pertinent part: "[c]hild support arrears to be paid in full to direct recipient for minor child prior to any reimbursement to welfare. $7,935.00 to be paid to [p]laintiff . . . by the [MCDSS] by June 30, 2009. $7,935.00 was improperly debited by welfare. All arrears to be paid to . . . [plaintiff]."
By letter dated June 24, 2009, the MCDSS advised the court that plaintiff had contacted it regarding the monies that it had received from the SSA. The MCDSS noted that there had apparently been two court hearings at which this issue had been addressed but the MCDSS was not a party to the action and had not been notified of these proceedings.
The MCDSS also noted that it had never been served with copies of the court's orders. The MCDSS stated that it never received any SSD payments for defendant. It did, however, receive SSI benefits in the amount of $7,935. The MCDSS asserted that it had a lien on the SSI award and, by law, the SSI benefits could not be attached for child support purposes.
The court entered an order dated June 30, 2009, which directed that that the MCDSS be added to the case as a third-party defendant. The order required the parties to appear in court on July 24, 2009. At the hearing held on July 24, 2009, the court rendered a decision from the bench, finding that the MCDSS was required to pay the $7,935 it had received to plaintiff. The court rejected the MCDSS's argument that the court did not have authority to order the MCDSS to pay plaintiff the SSI benefits it had received.
The court entered an order dated July 24, 2009, memorializing its decision. The order also denied the MCDSS's motion for a stay. The MCDSS filed a notice of appeal and moved before us for a stay of the Family Part's order. The MCDSS then moved in the Family Part for a limited stay of enforcement of its order, pending a decision by this court on its motion for a stay. The court denied the motion. We thereafter entered an order dated September 11, 2009, staying the court's order pending disposition of this appeal.
MCDSS argues that the Family Part misinterpreted and misapplied the law when it ordered MCDSS to turn over to plaintiff the SSI benefits received by the agency. We agree.
Here, the court erroneously determined that the lump-sum SSI benefits awarded to defendant and paid to the MCDSS could be garnished and applied to his child support arrears. However, "[b]enefits received through the SSI program are exempt from attachment, garnishment, levy, execution or any other legal process." Burns v. Edwards, 367 N.J. Super. 29, 39 (App. Div. 2004) (citing 42 U.S.C.A. § 407(a); 20 C.F.R. § 581.104). Indeed, SSI benefits "cannot be garnished or attached for child support or alimony." Ibid. (citing 42 U.S.C.A. § 659(a)).
In Burns, we held "that SSI benefits cannot be included in the child-support calculus." Id. at 45. We stated that "42 U.S.C.A. § 407(a) and the Congressional intent in creating the program preclude the inclusion of such benefits in establishing, modifying or collecting child support when the sole income of the parent consists of those SSI benefits and the parent otherwise has no ability to generate additional income." Ibid.
In Crespo v. Crespo, 395 N.J. Super. 190 (App. Div. 2007), we considered whether the trial court erred by denying the defendant's motion to suspend payments towards his child support arrears when his only source of income was SSI benefits. Id. at 193. We noted that, in Burns, we had held that federal law barred the inclusion of SSI benefits in the calculation of child support when the disabled parent receives no other income and does not have the ability to generate such income. Id. at 194-95 (citing Burns, supra, 367 N.J. Super. at 32-33). We held in Crespo that the SSI benefits could not be garnished for payment of child support arrears. Id. at 195.
In this case, it is undisputed that the $7,935 that the SSA paid to the MCDSS consisted of SSI benefits awarded to defendant. By requiring the MCDSS to pay that amount to plaintiff, the court essentially garnished defendant's SSI benefits to satisfy his child support arrears. The court's order was inconsistent with our decisions in Burns and Crespo.
We note additionally that the MCDSS had a clear right to retain defendant's SSI benefits. Although SSI benefits cannot generally be attached or garnished, 20 C.F.R. 416.1904 permits the SSA to withhold an individual's SSI benefits and send those monies to a state in order to repay interim assistance paid to the claimant if the SSA has "an interim assistance agreement with the State," the claimant authorizes the withholding, and the authorization is in effect when the SSI benefits are paid. The State and the SSA have entered into such an agreement. See N.J.A.C. 10:90-14.5(a).
The record establishes that defendant applied to the MCDSS for interim assistance payments, while he was seeking SSD and SSI benefits. As part of that application process, defendant executed forms authorizing the SSA to withhold the initial payment of any SSI benefits and to turn over those funds to the MCDSS to reimburse it for the interim assistance paid to defendant. It is undisputed that the MCDSS paid defendant $14,230 in interim assistance and the $7,935 was applied as partial reimbursement for those payments. Clearly, the MCDSS had the right to retain the $7,935 and the trial court erred by ordering the MCDSS to turn over those monies to plaintiff.
At the hearing on July 24, 2009, the court stated that it was ordering the MCDSS to pay plaintiff because it wanted to ensure that the child support arrears had priority over repayment to the MCDSS "despite the fact [defendant] signed this agreement that said [the MCDSS] get[s] to pull out a piece of it." As we have explained, however, the court did not have the authority to give plaintiff's right to receive the past-due child support payments priority over the MCDSS's right to apply defendant's SSI benefits as reimbursement for the interim assistance payments it made to defendant.
At the hearing, the court also commented that it was not ordering the attachment of defendant's SSI benefits, it was merely directing that they be paid to plaintiff. There is, however, no valid distinction between attachment or direction of the monies. The court's order effectively attached defendant's SSI benefits and ordered that they be applied to defendant's child support arrears. Our decisions in Burns and Crespo make clear that the court did not have authority to enter such an order.
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