## Facts

- The Social Security Administration (SSA) may appoint a representative payee for a beneficiary found unable to manage benefits.
- SSA regulations require the payee to use benefits for the beneficiary’s “use and benefit” and define “current maintenance” to include customary charges of an institution providing care.
- Federal law generally bars creditors from serving as payees, but permits a state-licensed or certified care facility to act as representative payee for an institutionalized beneficiary.
- Indiana state mental health hospitals were appointed as representative payees for certain institutionalized, mentally impaired Social Security beneficiaries and received beneficiaries’ monthly payments.
- The hospitals applied a portion of those benefits to the costs of the beneficiaries’ institutional maintenance.
- A certified class, represented by Ivy Mason, sued Indiana officials, alleging the practice unlawfully took benefits without beneficiaries’ voluntary consent, violated the Social Security Act’s anti-attachment provision, and denied procedural due process.
- The district court granted summary judgment to the state officials, and the class appealed.

## Issues

1. Whether a state mental health institution acting as an SSA-appointed representative payee violates 42 U.S.C. § 407 by applying a portion of benefits to the beneficiary’s institutional care without the beneficiary’s voluntary consent.
2. Whether the representative-payee practice of applying benefits to institutional maintenance violates procedural due process under the Fourteenth Amendment.

## Decision

- The Seventh Circuit affirmed summary judgment for the state officials.
- The court held that § 407 does not bar an SSA-appointed representative payee, including a state hospital, from using benefits to pay for the beneficiary’s institutional care as authorized by statute and regulation.
- The court held that the procedures embedded in the representative-payee framework, including SSA appointment and oversight mechanisms, satisfied procedural due process.

## Legal Principles

- Under 42 U.S.C. § 405(j) and implementing regulations, a representative payee must use benefits in the beneficiary’s best interests, and “current maintenance” may include customary charges of the institution providing care.
- The Social Security Act permits a state-licensed or certified care facility to serve as a representative payee for an institutionalized beneficiary despite the general restriction on creditors serving as payees.
- The anti-attachment provision in 42 U.S.C. § 407 targets seizure of benefits through execution, levy, attachment, garnishment, or other legal process by third parties; it does not prohibit SSA-authorized expenditures by a representative payee for the beneficiary’s maintenance.
- A procedural due process claim requires a protected property interest and constitutionally inadequate procedures; SSA’s appointment, reporting requirements, supervision, and remedies for misuse can provide sufficient process for payee-administered benefit use.

## Conclusion

The Seventh Circuit held that Indiana state mental health hospitals, when acting as SSA-appointed representative payees, could apply beneficiaries’ Social Security benefits to institutional maintenance costs without violating § 407, and that the representative-payee system’s SSA oversight provided adequate procedural due process.


Mason v. Sybinski, 280 F.3d 788 (7th Cir. 2002)