In People v Lampart, __ Mich App __ (#315333, 7/31/2014) the Court of Appeals held that, to the extent the trial court’s consideration of SSDI benefits results in an order of restitution that could only be satisfied from those benefits, the use of the court’s contempt powers then would violate 42 USC 407(a). As noted, the protection afforded to SSDI benefits extends after those benefits are received. Philpott, 409 US at 415-417; State Treasurer, 468 Mich at 155;Whitwood, 265 Mich App at 654. See also United States v Smith, 47 F3d 681, 684 (CA 4, 1995) (holding, under a federal statute employing similar language to 42 USC 407(a), that a court could not order restitution against benefits after they were received because “[t]he government should not be allowed to do indirectly what it cannot do directly[,]” meaning that it could not require the defendant “to turn over his benefits as they are paid to him.”). 42 USC 407(a) represents a clear choice by Congress to exempt all social security benefits, whether from SSDI or SSI, from any legal process, save for a few enumerated exceptions not at issue in this case. See Bennett, 485 US at 398 (explaining that 42 USC 407(a) demonstrates Congress’ “clear intent . . . that Social Security benefits not be attachable.”); Philpott, 409 US at 417 (emphasis added) (explaining that 42 USC 407(a) acts as a “broad bar against the use of any legal process to reach all social security benefits.”).
Under the Michigan Constitution, crime victims are entitled to restitution. Const 1963, art 1, § 24. Under the Crime Victims’ Rights Act (CVRA), MCL 780.751 et seq, it is mandatory, not discretionary, for trial courts to order convicted defendants to “make full restitution to any victim of the defendant’s course of conduct that gives rise to the conviction.”People v Fawaz, 299 Mich App 55, 64-65 (2012), quoting MCL 780.766(2). The defendant’s ability to pay is irrelevant; only the victim’s actual losses from the criminal conduct is to be considered. Id. at 65; People v Crigler, 244 Mich App 420, 428; 625 NW2d 424 (2001) (“Since June 1, 1997, MCL § 780.767; MSA 1287(767) no longer includes the defendant’s ability to pay among the factors to be considered when determining the amount of restitution.”).
42 USC 407(a) acts as an anti-attachment statute for social security benefits, and provides that: The right of any person to any future payment under this subchapter 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 protection afforded to money received as social security benefits extends before and after the benefits are received. Philpott v Essex Co Welfare Bd, 409 US 413, 415-417; 93 S Ct 590; 34 L Ed 2d 608 (1973). See also State Treasurer v Abbott, 468 Mich 143, 155 (2003); Whitwood, Inc v South Blvd Prop Mgt Co, 265 Mich App 651, 654 (2005). The fact that the payments have been made does not make them lose the character of “Social Security benefits” or make them subject to legal process. To the contrary, the protections of 42 USC § 407(a) apply, by their terms, to “moneys paid or payable”; the fact that benefits have been paid and may be on deposit in a recipient’s bank account does not shed them of that protection until they are in some way converted into some other kind of asset. Philpott, 409 US at 415-417. Thus, even after a recipient receives SSDI benefits and deposits them into a bank account, the SSDI benefits are still protected by 42 USC 407(a). Whitwood, 265 Mich App at 654. When a state court order attaches to social security benefits in contravention of 42 USC 407(a), the attachment amounts to a conflict with federal law, and such a conflict is one “that the [s]tate cannot win.” Bennett v Arkansas, 485 US 395, 397; 108 S Ct 1204; 99 L Ed 2d 455 (1988).
Trial courts must be careful to avoid any order that in fact would compel one to satisfy a restitution obligation from the proceeds of one’s SSDI benefits. Trial courts may appropriately (and perhaps periodically) ascertain one’s assets and sources of income, perhaps through a contempt hearing, and to enter such further orders as are appropriate, while avoiding any directive, either explicit or otherwise, that will in fact cause one to have to invade one’s SSDI benefits (or the proceeds thereof) to satisfy her/his continuing restitution obligation. If it were determined that the only asset, or source of income, is and remains from SSDI/SSI benefits, 42 USC 407(a) prohibits the use of legal process—including by a finding of contempt—from reaching those benefits to satisfy the restitution order. See Philpott, 409 US at 417. If, however, one is found to have other income aside from SSDI/SSI benefits, or other assets that are derived from other sources, that income or those assets could be used to satisfy the restitution award. A trial court’s contempt powers are a permissible tool to enforce a restitution order. A contempt hearing can be an appropriate vehicle for determining income and assets from which the restitution order may properly be enforced. See Causeley, 78 Mich App at 251;Moncada, 81 Mich App at 27-28. However, a trial court may not compel one to satisfy her/his restitution obligation out of her SSDI/SSI benefits, by a contempt finding or other legal process, as to which one is entitled to the protections of 42 USC 407(a).
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