Cunningham v. ToanCunningham v. Toan
Appellants, public officials responsible for the administration of the Aid to Families with Dependent Children (AFDC) program in Missouri, appeal from a final order entered in the District Court1 for the Western District of Missouri granting appellee‘s motion for summary judgment and permanently enjoining the state‘s practice of automatically regarding a minor parent‘s Old Age, Survivor and Disability Insurance (OASDI) benefits, paid to a representative payee, as income available to the minor parent‘s dependent child in determining the dependent child‘s eligibility and grant amount under the state‘s AFDC program. The named appellee and members of the class she represents are minor parents who were receiving OASDI benefits through a representative payee when they applied for AFDC benefits. For reversal appellants argue that the district court erred in (1) entering its judgment on the basis of appellee‘s motion for summary judgment and (2) holding that the state practice was in conflict with regulations promulgated under the Social Security Act,
At the time of filing, appellee was a fifteen-year-old recipient of OASDI benefits which were based on the earnings record of her disabled father. A representative payee was receiving these benefits on behalf of appellee when appellee applied to the state for an AFDC grant for her dependent son. The Missouri Department of Social Services considered the OASDI benefits as income to the family unit consisting of appellee and her son in calculating the AFDC grant amount for the unit. Appellee contended that she should have been excluded from the AFDC assistance unit and that in determining eligibility and grant amount for her son, only the OASDI benefits actually used to meet his needs should have been counted. After an administrative hearing, the initial AFDC grant calculation was affirmed.
Appellee brought this class action under
AFDC is a joint federal and state benefit program established by the Social Security Act,
AFDC is financed in large measure by the federal government. The program, however, is administered by the participating states which are given broad discretion in determining both the standard of need and the level of benefits. Shea v. Vialpando, 416 U.S. 251, 253, 94 S.Ct. 1746, 1750, 40 L.Ed.2d 120 (1974); King v. Smith, 392 U.S. 309, 316, 88 S.Ct. 2128, 2133, 20 L.Ed.2d 1118 (1968); Johnson v. Likins, 568 F.2d 79, 81 (8th Cir.1977). Participation by a given state in the AFDC program is voluntary, but if a state does participate, its plan must comply with the requirements of the Social Security Act and regulations promulgated thereunder. King v. Smith, 392 U.S. at 317, 88 S.Ct. at 2133; McCoog v. Hegstom, 690 F.2d 1280, 1284 (9th Cir.1982).
In determining the need of a child for AFDC benefits, a state must consider the “income and resources of the child.”
We hold that the policy of deeming income of a parent as available to his or her minor children is invalid when the income is OASDI benefits received by a representative payee on behalf of the parent, because such a policy is in direct conflict with the federal statutes and regulations governing the conduct of representative payees. Title
Appellants argue that there is no conflict between the state procedure and the OASDI regulations, noting
Our holding is a narrow one and only applies to parents receiving OASDI benefits through a representative payee when they apply for an AFDC grant for their dependent children. Furthermore, to the extent that the OASDI benefits are actually available to the dependent child, the state may consider them in calculating the child‘s eligibility and grant amount.
Those courts which have had the opportunity to consider state AFDC “deeming” procedures as they relate to a parent‘s OASDI benefits paid to a representative payee have all applied a similar analysis and have enjoined the procedure. See Riddick v. D‘Elia, 626 F.2d 1084 (2d Cir.1980); Snider v. Creasy, 548 F.Supp. 601 (S.D.Ohio 1982), appeal docketed, No. 82-3731 (6th Cir. argued Oct. 11, 1983); Barnes v. Reagen, 501 F.Supp. 215 (N.D.Iowa 1980); Griffith v. Burns, No. C77-2012 (N.D.Iowa Nov. 9, 1977). See also Johnson v. Harder, 383 F.Supp. 174 (D.Conn.1974), aff‘d, 512 F.2d 1188, 1189 (2d Cir.) (state AFDC regulation providing that OASDI benefits received by a child through a representative payee may be included as income to legally dependent parent for purposes of determining parent‘s eligibility and grant amount is in conflict with federal regulations on representative payee‘s responsibilities and discretion), cert. denied, 423 U.S. 876, 96 S.Ct. 149, 46 L.Ed.2d 109 (1975).
Summary Judgment
Appellants argued in their brief that the district court erred in entering its order based on appellee‘s motion for summary judgment because there is a question regarding the position of the Secretary of the Department of Health and Human Services (HHS) on the validity of the state‘s practice. Appellants characterized this question as a genuine issue as to a material fact precluding summary judgment under
Deference Due HHS‘s Interpretation
The Secretary of HHS has submitted an amicus brief in this case taking the position that the district court misinterpreted the statutory and regulatory obligations of representative payees in administering OASDI benefits, and that it is permissible for a state to utilize its AFDC standard of need to determine what part of OASDI payments will satisfy a beneficiary‘s maintenance needs and to conclusively attribute the remainder as income available to the beneficiary‘s dependent child.
An agency‘s interpretation of its own regulations is entitled to deference by the courts, but an agency‘s interpretations are not conclusive and courts are not bound by them. White Industries, Inc. v. FAA, 692 F.2d 532, 534 (8th Cir.1982); McGoog v. Hegstrom, 690 F.2d at 1284. In the present case, the Secretary‘s interpretation of
The district court was correct in holding that the state practice conflicted with federal law and was therefore invalid. Accordingly, we affirm the order and judgment of the district court.