In the case of Philpott et al. v. Essex County Welfare Board, the U.S Supreme Court ruled that federal laws prohibit states from attaching or garnishing funds received through Social Security benefits to repay public assistance provided by a state agency. The dispute began when Essex County Welfare Board in New Jersey sought reimbursement for financial aid given to two recipients who later started receiving retroactive disability payments under the Federal Social Security Act. The court held that these social security benefits were protected from legal process and could not be seized by state agencies for repayment of welfare assistance, as it would contravene Section 207 of the Social Security Act which aims at protecting beneficiaries' livelihoods.

In the dissenting opinion for Philpott v. Essex County Welfare Board, Justice Rehnquist argued that Congress did not intend to prevent states from recovering public assistance funds when it passed legislation prohibiting the attachment or garnishment of federal benefits. He contended that allowing states to recoup welfare payments from recipients who later receive a lump sum of Social Security benefits does not conflict with the federal government's goal of ensuring beneficiaries have adequate means of support. Instead, he suggested this practice could help maintain the financial integrity and sustainability of state welfare programs by preventing individuals from receiving an unintended windfall at taxpayers' expense. Furthermore, Justice Rehnquist pointed out that several other federal benefit programs explicitly allow for such recovery actions, indicating Congress is not universally opposed to them.