Buening v. Wisconsin Dept. of Health and Social Services
| Decision Date | 30 September 1996 |
| Docket Number | No. 94-0891,94-0891 |
| Citation | 205 Wis.2d 32,556 N.W.2d 116 |
| Parties | Tracy A. BUENING, Petitioner-Respondent, v. WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Respondent-Appellant. |
| Court | Wisconsin Court of Appeals |
For the respondent-appellant the cause was submitted on the brief of James E. Doyle, Attorney General, with Donald P. Johns, Assistant Attorney General.
For the petitioner-respondent the cause was submitted on the brief of Jack Longert of Legal Action of Wisconsin, Inc. of Madison.
Before EICH, C.J., and PAUL C. GARTZKE and ROBERT D. SUNDBY, Reserve Judges.
This appeal presents the question: Does a child meeting all other eligibility requirements qualify for Aid for Families with Dependent Children (AFDC) when her parent becomes unemployed but is paid unemployment compensation exceeding the state's level of assistance? 1 We reject the argument of the Wisconsin Department of Health and Social Services ("department") that a child is per se "dependent" as defined in 42 U.S.C. § 607(a) when the principal-earner parent becomes unemployed. We further conclude that because unemployment compensation is not a social welfare benefit, but under Wisconsin law is temporary substitute income, it must be considered in determining eligibility for AFDC benefits. Because it is undisputed that the principal-earner parent's unemployment compensation was sufficient under the state's standards to support himself and his child, the child was not a "dependent child," as defined in 42 U.S.C. § 607(a), and was not eligible for AFDC benefits. Therefore, the state agency administering the state's AFDC plan, the Dane County Department of Human Services (DCHS), incorrectly added the child and her father to petitioner Tracy Buening's assistance unit. We affirm the trial court's order reversing the department's decision affirming DCHS's action.
Prior to March 1, 1993, Tracy Buening and her daughter, Azeria, constituted an assistance unit 2 and received $440 per month in AFDC benefits. Buening's partner, Bradley Smith, and their two-year-old child, Caitlin, live with Buening and her daughter. Smith has lived with Buening since 1987. Smith is not Azeria's natural or adoptive father. Nor is he her stepfather because he and Buening have not married. Azeria is eligible for AFDC benefits because she is a "dependent child," as defined in 42 U.S.C. § 606(a), 3 by reason of the continued absence of her natural father from her home. Until December 19, 1992, Smith was fully employed and earned approximately $1,500 per month. He was laid off and in January 1993 began to draw monthly unemployment compensation of approximately $652. DCHS determined that upon Smith's unemployment, Caitlin became a "dependent child" "who has been deprived of parental support or care by reason of the unemployment ... of the parent who is the principal earner." DCHS added both Smith and Caitlin to Buening's "filing unit" and concluded that 42 U.S.C. § 607(b)(1)(B)(iv) 4 required that it deduct Smith's monthly unemployment compensation from the budgetary requirement of $617 per month for four persons. Section 49.19(11)(a), STATS. Because Smith's unemployment compensation exceeded this assistance standard, DCHS terminated Buening's and Azeria's AFDC grant, effective March 1, 1993. The department affirmed.
Prior to Smith's unemployment, the combined monthly income of the Buening/Smith "family" was $1,940. Upon his unemployment, Smith's monthly income dropped from $1,500 to approximately $652. DCHS could not consider Smith's income while employed because he was merely the "man-in-the-house" who had no obligation to support Buening and Azeria. 45 C.F.R. § 233.90(a)(1) provides that the determination of whether a child has been deprived of parental support may be made only in relation to a parent who has an obligation to support the child. "Under this requirement, the inclusion in the family, or the presence in the home, of a 'substitute parent' or 'man-in-the-house' ... is not an acceptable basis for a finding of ineligibility or for assuming the availability of income by the State...." Id. (emphasis added).
The existence of a joint legal duty of support on behalf of both the beneficiary and representative payee is crucial when determining the availability of income for AFDC purposes. The Supreme Court noted in Heckler v. Turner, 470 U.S. 184, 200, 105 S.Ct. 1138, 1147, 84 L.Ed.2d 138, 150 (1985), that the availability principle serves to prevent states from "imputing financial support from persons who have no obligation to furnish it." This language suggests that the practice of "deeming" or imputing income to be available to an AFDC recipient is improper only when there is no legal obligation of support existing between the AFDC recipient and the person whose income is "deemed" available to the recipient.
Fransen v. Iowa Dep't of Human Servs., 376 N.W.2d 903, 907-08 (Iowa 1985) (footnote omitted).
45 C.F.R. § 233.20(a)(3)(ii)(D) provides that in determining eligibility for AFDC benefits, a state plan must provide that:
See Deel v. Jackson, 862 F.2d 1079, 1082 (4th Cir.1988) (quoted source omitted), cert. denied, 490 U.S. 1092, 109 S.Ct. 2434, 104 L.Ed.2d 991 (1989).
Courts have construed this language to mean that AFDC eligibility determinations may be based only on income and resources actually available to the applicant for assistance. Heckler v. Turner, 470 U.S. 184, 199, 105 S.Ct. 1138, 1146-47, 84 L.Ed.2d 138 (1985). The United States Supreme Court's decisions applying the availability principle "clearly reflect that its purpose is to prevent the States from relying on imputed or unrealizable sources of income artificially to depreciate a recipient's need." Id. at 201, 105 S.Ct. at 1147. For example, in King v. Smith, 392 U.S. 309, 319-320 & n. 16, 88 S.Ct. 2128, 2135 & n. 16, 20 L.Ed.2d 1118 (1968), the Court held that Alabama could not deny assistance to otherwise eligible children solely because their mother cohabited with a "substitute father" without regard to whether the "father" actually contributed to the children's support.
"Applications of the availability principle have ... been consistent with the purpose that the rule seeks to achieve--precluding the fictional imputation of income to AFDC applicants from relatives and housemates who never actually contribute to the AFDC assistance unit." Deel, 862 F.2d at 1084 (emphasis added).
In Sundberg v. Mansour, 627 F.Supp. 616, 621 (W.D.Mich.1986), aff'd, 847 F.2d 1210 (6th Cir.1988), the Secretary argued that the DEFRA amendments (Deficit Reduction Act of 1984), 5 which added 42 U.S.C. § 602(a)(38) to the Social Security Act, did not "deem" sibling income and resources available to Medicaid applicants or recipients, but merely required that certain siblings be added to the public assistance filing unit. The court held that the Secretary argued "a distinction without a difference" because by requiring that siblings be included in the filing unit, the Secretary in effect "deemed" their income available to the Medicaid applicant or recipient. Id.
We agree that § 602(a)(38) is a "deeming" requirement; however, income of a sibling is not available to the assistance unit unless that sibling is a "dependent child." Further, the sibling's income must be actually available. Caitlin has no income which may be "deemed" available to support Buening and Azeria. While Caitlin's father has a legally enforceable obligation to support her, there is no court order requiring him to pay a certain amount periodically to her, as is the case when a child receives child support from an absent parent. The Secretary's regulations bar any state presumption that income of a nonlegally responsible person in a household is available to support all dependent children who reside therein. See Bray v. Dowling, 25 F.3d 135, 144 (2d Cir.1994) , cert. denied, 514 U.S. 1052, 115 S.Ct. 1431, 131 L.Ed.2d 312 (1995).
In Lewis v. Martin, 397 U.S. 552, 90 S.Ct. 1282, 25 L.Ed.2d 561 (1970), the Court said:
In the absence of proof of actual contribution, [the States] may not consider the child's "resources" to include either the income of a nonadopting stepfather who is not legally obligated to support the child as is a natural parent, or the income of a MARS [man assuming the role of a spouse]--whatever the nature of his obligation to support.
Id. at 559-60, 90 S.Ct. at 1285-86, quoted in Malloy v. Eichler, 628 F.Supp. 582, 595 (D.Del.1986), aff'd, 860 F.2d 1179 (3d Cir.1988). In Malloy, the court interpreted the DEFRA amendments as not requiring the states to attribute income of siblings or grandparents, who live in the same assistance unit, to Medicaid applicants. DEFRA may require the income of dependent siblings to be attributed to the AFDC assistance unit, but the language of the amendments does not permit us to assume that Congress intended to eliminate or modify the availability principle. Congress must be presumed to have been aware of the Secretary's interpretive regulations and policies that did not permit the states to attribute income not actually available to the assistance unit.
If DCHS had determined after a hearing that Smith actually supported Buening and Azeria, we would have a different case, but it elected to create a per se rule that Caitlin became a dependent child merely because her father became unemployed.
If Smith had remained employed but his monthly wages were reduced to...
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