(CN) – California can use veteran’s benefits to cover the costs of housing a patient at a state mental hospital, the 9th Circuit ruled.
Paul Gossett, an inmate at Napa State Hospital, accused his caretaker of illegally diverting his U.S. Department of Veterans Affairs benefits to pay part of his mental health-care costs.
But the appeals court in San Francisco said the hospital can seek reimbursement from veteran’s benefits, upholding a district court ruling that a “representative payee’s” use of veteran’s benefits does not violate federal law.
The VA had appointed a hospital official as legal custodian for Gossett in 1997 after it determined that he was mentally incompetent. The official signed an agreement authorizing a portion of Gossett’s benefits to go towards hospital bills.
Gossett was committed to a mental hospital in 1982 after being found not guilty of murder by reason of insanity. He has been at Napa State Hospital since 1996.
Though veteran’s benefits are kept out of the reach of creditors under federal law, a state hospital can claim a portion of those benefits when the veteran has been rated “incompetent” by Veterans Affairs.
“While we recognize the importance of shielding VA benefits from the claims of creditors, we also recognize that the purpose of those benefits is to provide for the care and maintenance of veterans,” Judge Milan Smith wrote.
The San Francisco court cited a 2003 Supreme Court ruling allowing a state to tap into a child’s Social Security benefits to pay for foster care despite legal protections of the funds. In the child’s case, as in Gossett’s, the state is acting as a representative of an individual and can use federal funds to pay the costs of care, the court said.
If Gossett won, the state would be forced to pay his mental health bills. The ruling “prevents the somewhat perverse result of taxpayers ‘picking up the bill’ twice for the care of an incompetent veteran,” Smith wrote.