SSR 70-9: SECTION 204(d)(7). -- UNDERPAYMENT -- STATUS OF COUNTY WELFARE AGENCY UNDER INDIANA'S SMALL ESTATE STATUTE
20 CFR 404.503
- Where, under the Indiana small estate statute, only the State may be considered the "distributee" of the estate of a deceased title II beneficiary and public welfare recipient who died intestate and without natural heirs, held, a county department of public welfare cannot qualify as the "legal representative" of the decedent's estate within the meaning of section 204(d)(7) (42 U.S.C. 404(d)(7) of the Social Security Act to receive the benefit underpayment due the estate.
J, a retirement insurance beneficiary, died intestate in Indiana with no widow, children, or parents surviving him. Retirement insurance benefits were still due him. According to the provisions of section 204 of the Act the amount of benefits unpaid at death constitutes an underpayment. Since J was a recipient of public assistance, the X County Department of Public Welfare has requested the underpayment as his "legal representative." The welfare agency's claim is based upon its purported status as a distributee of J's estate under section 7-201 of Burns Indiana Statutes (Indiana small estate statute).
Section 204(d)(7) of the Act provides, as pertinent here, that in the absence of any surviving spouse, child, or parent of the decedent, payment of the amount due the decedent may be made to the "legal representative" of his estate. Qualification as "legal representative" depends on whether or not the party can give the Social Security Administration good acquittance.
The question to be resolved here is whether the X County Department of Public Welfare can give the Administration good acquittance for the underpayment and thus qualify for such underpayment as "legal representative" of the estate within the meaning of section 204(d)(7) of the Social Security Act, as amended.
The Indiana "small estate statute," (section 7-201) provides in pertinent part that:
- The widow, or if there is no widow, then the distributees of an estate shall be entitled thereto without awaiting the appointment of a personal representative or the probate of a will . . .
- (c) The value of the entire assets of the estate does not exceed two thousand dollars ($2,000), and
- (d) There is furnished . . . an affidavit showing . . . the right of the widow or distributees to receive such money or property. . . .
The Social Security Administration may pay underpayments owed to a "legal representative" or persons entitled under a proper affidavit if the affidavit received specifically sets forth the existence of the conditions enumerated in section 7-201 supra. Where there is no widow, the Indiana statute provides that distributees must submit in the affidavit allegations of their right to receive such money. Distributees are defined in section 6-103 of Burns Indiana Statutes as "those persons who are entitled to real and personal property of a decedent under his will or under the statutes of intestate succession."
Assuming that a county is considered a "person" under the statute, it still must be determined whether a county can be deemed a distributee under the Indiana rules of intestate succession enumerated in section 6-201 of Burns Indiana Statutes. If a person dies without a will and leaves no heirs, a county under section 6-201(c)(8) does not have any intestate inheritance rights; such rights, acquired through the process of escheat by the State, are reserved only to the State, and the State alone can be a "distributee" of a decedent's estate.
It has been suggested that even though the State alone has the legal status of "distributee" under Indiana's small estate statute, the State (or county) welfare department may act as agent for the State in receiving the underpayment payable in this case under section 204(d)(7) of the Social Security Act. This suggestion is based upon an implied comparison with the authority granted the welfare agency under the Indiana Public Welfare Act to collect claims against the estates of deceased public assistance recipients on behalf of the State. However, this is not a tenable comparison for the following reasons:
(1) The Indiana Public Welfare Act, from which the county public welfare agencies derive this authority, is separate and distinct from the State law of intestate succession, under which the State may, through the process of escheat, have rights of inheritance in a decedent's estate. Authority granted by the first statute confers no authority in connection with any rights arising under the second. (2) A county welfare department's authority with respect to enforcement of claims for reimbursement for old-age assistance furnished appears to be essentially that of a creditor and exists irrespective of whether the State is or is not a "distributee" through the process of escheat in a particular case. (3) The county welfare departments, creations of Indians statute, must be considered to have only such authority, direct and incidental, as is granted them by statute. Thus, since those departments do not appear to have been given authority with respect to situations where, through the process of escheat, the State may be considered to be a "distributee" of the estate of an underpaid decedent under section 6-201, Burns Indiana Statutes, the above-mentioned Indiana small estate statute affords no basis for payment of an underpayment to such a department in such cases.
Finally, it is not clear from the pertinent Indiana statutes whether, in those cases where the State could be considered to be a "distributee" of a decedent's estate through the process of escheat because of failure of natural heirs, there is anyone who could receive an underpayment on behalf of the State. For these reasons, it held that the X County Department of Public Welfare cannot qualify for the underpayment as the "legal representative" of J's estate within the meaning of section 204(d)(7) of the Social Security Act, as amended.