§ 108A-25.3. Garnishment of wages to recoup fraudulent public assistance program payment. - North Carolina Statutes

§ 108A‑25.3. Garnishment of wages to recoup fraudulent public assistance program payment.

(a)        The following definitions apply in this section:

(1)        Disposable income. – The part of the compensation paid orpayable for personal services, whether denominated as wages, salary,commission, bonus, or otherwise which remains after the deduction of anyamounts required by law to be withheld.

(2)        Fraudulent payment. – Any public assistance program paymentmade because of a recipient's false statement or representation or failure todisclose a material fact which occurs willfully and knowingly and with intentto deceive.

(3)        Garnishee. – The person, firm, association, or corporationowing compensation for personal services, whether denominated as wages, salary,commission, bonus, or otherwise.

(4)        Public assistance program. – Any means‑tested benefitprogram administered or supervised by a county department of social services orthe Department of Health and Human Services which is funded in whole or in partby federal, State, or county resources.

(b)        In any case in which a recipient or former recipient of apublic assistance program, who while a recipient, obtained or benefited from afraudulent payment, a judge of the district court in the county where therecipient or former recipient resides or is found, or in the county where thepayment was made, may enter an order of garnishment to recoup a fraudulentpayment after 10 days following the entry of a judgment for a sum certain forfraudulent payments pursuant to a petition filed in the action in accordancewith subsection (c) of this section. Not more than twenty percent (20%) of therecipient's or former recipient's monthly disposable income may be garnished torecoup payment in cases of fraudulent payment. The order of garnishment shallbe subject to all federal and State laws or regulations that may apply torecoupment of fraudulent payments. Garnishment shall not be a remedy under thissection when the recipient or former recipient is required to pay restitution forfraudulent public assistance payments pursuant to a criminal court order.

(c)        A county department of social services or the Department ofHealth and Human Services may petition the court for an order of garnishment torecoup a fraudulent public assistance program payment. Garnishment shall be aremedy to recoup payment only after all administrative remedies are exhaustedunsuccessfully. The petition shall be verified and provide the court with factsand circumstances of the fraudulent payment to or on behalf of the recipient orformer recipient, the name and address of the garnishee, the recipient's orformer recipient's monthly disposable income (which may be based on informationand belief), and the amount sought to be garnished from the recipient's or formerrecipient's disposable income. The petition shall be served on both therecipient or former recipient and the garnishee in accordance with theprovisions for service of process set forth in G.S. 1A‑1, Rule 4. Thetime period for answering or otherwise responding to process issued pursuant tothis section shall be in accordance with the time periods set forth in G.S. 1A‑1,Rule 12.

(d)        Upon a hearing held pursuant to this section, the court mayenter an order of garnishment. Provided, the court may not enter an order ofgarnishment if the court finds that the order jeopardizes the recipient's orformer recipient's ability to become or remain financially self‑sufficientand will result in the likelihood of an increased or recurring dependency onpublic assistance or an inability to secure basic necessities including, butnot limited to, housing, food, health care, and utility costs. If an order ofgarnishment is entered, a copy of the same shall be served on both therecipient or the former recipient and the garnishee either personally or bycertified or registered mail, return receipt requested. The order shall setforth sufficient findings of facts to support the action by the court and theamount to be garnished for each pay period. The amount garnished may beincreased by an additional one dollar ($1.00) processing fee to be assessed andretained by the garnishee for each payment under the order. The order shall besubject to review for modification and dissolution upon the filing of a motionin the cause.

(e)        Upon receipt of the order of garnishment, the garnisheeshall transmit without delay to the clerk of superior court the amount orderedby the court to be garnished. These funds shall be disbursed to the countydepartment of social services to recoup fraudulent payments subject to theorder of garnishment entered pursuant to this section.

(f)         A garnishee who violates the terms of an order ofgarnishment shall be subject to punishment for contempt.

(g)        The Social Services Commission shall adopt rules toimplement this section. The rules shall ensure that a petition for an order ofgarnishment sought pursuant to this section is consistent with all federal andState laws and regulations. (1997‑443, s. 11A.122; 1997‑497, s. 1.)