23 Cal. App. 5th 425
Cal. Ct. App. 5th2018Background
- Kerrie Reilly receives Section 8 housing assistance administered by the Marin Housing Authority (MHA) and also receives IHSS payments for providing in‑home care to her severely developmentally disabled adult daughter.
- Reilly failed to timely report a household change in 2004, entered a repayment agreement with MHA for overpayment damages, and repeatedly missed scheduled repayments.
- Reilly asked MHA to exclude IHSS payments from income when recalculating her subsidy; MHA counted IHSS payments as income and issued termination notices when repayments were missed.
- An administrative hearing upheld termination based on missed payments; the hearing officer did not decide whether IHSS payments are includable as income.
- Reilly filed a petition for writ of mandate claiming MHA misapplied 24 C.F.R. § 5.609(c)(16) by treating IHSS payments to her for caregiving as income; the trial court sustained MHA’s demurrer, holding IHSS caregiver payments are income.
- The Court of Appeal affirmed, holding the HUD exclusion for amounts paid “to offset the cost of services and equipment” applies to state payments that reimburse or pay for services/equipment the family itself pays for, but not to payments compensating a family member for providing services (i.e., wages/opportunity‑cost compensation).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IHSS payments to a family member who provides in‑home care are excluded from HUD income under 24 C.F.R. § 5.609(c)(16) | Reilly: IHSS compensates costs (including opportunity cost) of care and therefore "offsets the cost of services" and should be excluded from income. | MHA: The exclusion applies only to payments that offset concrete out‑of‑pocket costs the family incurs (e.g., paying a third‑party provider or equipment); payments that compensate a family member for services are income. | The court held IHSS payments that compensate a family member for providing care are income under § 5.609; the exclusion covers amounts that offset actual monetary costs the family pays for services or equipment, not wages/opportunity costs. |
Key Cases Cited
- Norasingh v. Lightbourne, 229 Cal.App.4th 740 (Cal. Ct. App. 2014) (discusses IHSS protective supervision and program context)
- Basden v. Wagner, 181 Cal.App.4th 929 (Cal. Ct. App. 2010) (explains IHSS administration and reimbursable services)
- Anthony v. Poteet Housing Authority, 306 Fed.Appx. 98 (5th Cir. 2009) (refused to exclude wages paid to a parent caregiver under § 5.609(c)(16))
- Blank v. Kirwan, 39 Cal.3d 311 (Cal. 1985) (standards for demurrer review and leave to amend)