Does This Make Sense To You?

     Is there some tension, or perhaps self-contradiction, in this section of Social Security's manual?

Section 207 of the Social Security Act (42 U.S.C 407) states: “The right of any person to any future payment under this title shall not be transferable or assignable, at law or in equity, and none of the monies paid or payable or rights existing under this title shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the operation of any bankruptcy or insolvency law.”...

Any arrangement in which the claimant shares control of the funds from his or her benefit with a person or entity that has an interest in charging or collecting money from the claimant is an assignment-like situation that violates SSA’s policy.  ...

Some representatives are authorized by third parties to ensure that debts beneficiaries owe to the third parties are repaid immediately after the beneficiary starts to receive benefits. There is no assignment-like situation if:

• The representative has no financial interest in the beneficiary’s direct deposit account (i.e.., he is not named on the account and/or has no authority to direct the money in the account); and
• The representative is not charging the beneficiary a fee; and
• The beneficiary pre-authorizes (according to his financial institution’s policy) a withdrawal of funds from his account to repay a debt to a third party; but
• The representative did not obtain the pre-authorization from the beneficiary through deceit, coercion, or intimidation; and
• The representative gets confirmation from the beneficiary (oral or written) of the pre-authorization to withdraw the money from the account after the funds are deposited into the beneficiary’s account and before a transfer of funds is made to pay the third party debt. This confirmation is necessary because a beneficiary may have signed the pre-authorization before learning whether he will receive benefits and the amount of past-due benefits he will receive (i.e., authorizing the representative to take benefit funds before the beneficiary has had any chance to exercise control over the funds). The beneficiary also may have signed the pre-authorization without specifying the amount of money that the representative will withdraw from the account. This circumstance is different than other pre-authorizations (e.g., mortgage payments, loan repayments, investments, nursing home fees, etc.) because, in most cases involving pre-authorizations, the beneficiary has an ongoing relationship with the organization that is making pre-authorized withdrawals, the beneficiary knows the amount of money they are pre-authorizing, and those pre-authorizations occur continuously after the beneficiary is receiving regular benefits.

     Right. Assignments are forbidden unless there is an ongoing relationship with the entity to which you are making the assignment and the assignments continue after you start receiving benefits.
     In my opinion, this is indefensible. This was a Bush era policy that should have never happened and which should be undone as soon as possible. If Long Term Disability insurers want this section of the statute amended, they need to lobby Congress.