Nebraska Stealing Inmates' EIP Payments

© 2021 Last updated: 10/01/2021

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Congress responded to the COVID-19 pandemic by providing all Americans with Economic Incentive Payments (EIP) of, first, $1200 and then a second payment of $600. The Federal Courts decided that even prison inmates were entitled to these stimulus payments. See, Scholl v. Mnuchin, 494 F.Supp.3d 661, 689 (N.D.Cal. 2020). The Nebraska Department of Correctional Services (NDCS) sent Memos to the population describing how inmates should file to obtain their EIP payments; and inmates did so (Free Money!). It is obvious why NDCS wanted each of the nearly 4000 inmates to receive those payments that would end up being nearly $5 million in inmate accounts held by NDCS.

Many inmates were too late in filing a 2020 tax return and had to file again in 2021 to claim the (now) $1800 EIP payments. However, inmates who had outstanding child support debts received a letter from the Birmingham, Alabama U.S. Treasury Department office informing them that the State's Department of Health and Human Services (DHHS) Child Support Enforcement agency was taking their entire EIP payments. The Treasury letter informed those inmates to contact that State agency if they thought that debt was not correct.

Those inmates responded by letter to the DHHS Child Support Agency and argued that (at least) the second $600 EIP was exempt from being taken for past due child support orders. The December 2020 Consolidated Appropriations Act, an over 5000 page Public Law 116-260, made the second $600 EIP exempt from garnishment by a State child support agency for overdue child support.

Referenced under the Administrative Provisions of "26 USC 6428A: Additional 2020 recovery rebates for individuals", Public Law 116-260 Section 272(d), subsection (2)(A) says that "no applicable payment shall be subject to ... garnishment, or other legal process..." Then under subsection (2)(E) the Definitions say: (iii) the "applicable payment" means the second $600 EIP payment, and (v) "garnishment order" means "a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, ... or a State child support agency, including a lien arising by operation of law for overdue child support".

The DHHS Child Support Enforcement agency responded by telling those inmates the State was taking the money anyway, but they could appeal that decision for only one of three reasons: a) they were not the person named in the child support order, b) the amount of the past due support was incorrect, or c) there was no such support order. In other words, the inmates had no appeal coming to claim the exempt EIP payments. Presumably the State thinks that inmates are not smart enough to know how to get the money they are entitled to or, with the last $1400 payment, inmates would not want to pay the court filings fees in order to get the $600 they were entitled to. This is known as "theft by intimidation."

Some inmates who were able to file court petitions as paupers, avoiding the necessary court filing fees, have sued for writs of mandamus to order the Director of the DHHS Child Support agency to return inmates' $600 EIP payments that the State has taken in violation of federal law. The Nebraska Courts will show us how organized the State is in stealing these inmates EIP money. Stay tuned.

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