The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Saturday, October 8, 1994              TAG: 9410080251
SECTION: LOCAL                    PAGE: B1   EDITION: NORTH CAROLINA 
SOURCE: ASSOCIATED PRESS 
DATELINE: WASHINGTON                         LENGTH: Short :   50 lines

THOSE WHO USED INSANITY DEFENSE TO LOSE BENEFITS

A North Carolina man confined to a mental hospital since being found not guilty by reason of insanity in the killings of four people is about to lose his federal disability payments.

The U.S. House and Senate voted unanimously Thursday for a bill that includes a provision to stop disability payments to those committed to mental institutions after being acquitted of crimes.

About 1,500 patients, including Michael Charles Hayes of Winston-Salem, will be affected, the Winston-Salem Journal reported.

``It's about time,'' said R.B. Nicholson, whose son was one of four people slain in a shooting spree near Winston-Salem in 1988.

In 1989, a Forsyth County jury found Hayes not guilty of all charges by reason of insanity, and a judge committed Hayes to Dorothea Dix Hospital in Raleigh, where he remains. Because mental illness is considered a disability, Hayes and other patients like him receive Social Security to compensate for lost wages, even though states typically provide room and board.

Nicholson learned when he sued Hayes for civil damages that Hayes was receiving $511 a month and stocking his room with luxuries.

``It was wrong,'' Nicholson said. ``Since he has been in the hospital, he has had much more disposable income than he ever enjoyed in his life.''

Karl Knudsen, Hayes' court-appointed attorney, has questioned whether the new law is constitutional, and predicted that a class-action lawsuit is all but inevitable. Because Hayes was acquitted, Knudsen argues, he should be considered not guilty.

The new law is expected to save the Social Security Administration an estimated $10 million a year. Under the bill, disability payments will be denied to anyone confined by court order to an institution at public expense who was found mentally incompetent to stand trial, not guilty by reason of insanity or other similar court action.

The House voted 423-0 to approve the bill Thursday afternoon. The Senate passed it without dissent on a voice vote Thursday night, said Steve Phillips, a spokesman for Sen. Jesse Helms, R-N.C. The bill now goes to President Clinton for his signature.

The provision regarding benefits paid to the criminally insane is part of a bill that will raise the threshold at which homeowners must pay Social Security withholding tax for domestic help to $1,000 a year. by CNB