DeFREITAS v. Noot

• Decision Date: 29 October 1981
• Docket Number: Civ. No. 4-81-344.
• Citation: 527 F. Supp. 147
• Parties: Patricia DeFREITAS, et al., Plaintiffs, v. Arthur E. NOOT, in his official capacity as Commissioner of the Minnesota Department of Public Welfare, and Richard Schweiker, in his capacity as Secretary of Health and Human Services, Defendants.
• Court: U.S. District Court — District of Minnesota

527 F. Supp. 147

Patricia DeFREITAS, et al., Plaintiffs, v. Arthur E. NOOT, in his official capacity as Commissioner of the Minnesota Department of Public Welfare, and Richard Schweiker, in his capacity as Secretary of Health and Human Services, Defendants.

Civ. No. 4-81-344.

United States District Court, D. Minnesota, Fourth Division.

October 29, 1981.

Central Minnesota Legal Services, by Louise A. Dobbe and Michael Fargione, Minneapolis, Minn., for plaintiffs.

Warren Spannaus, Atty. Gen. by Ellen Dubuque and Beverly Jones Heydinger, Sp. Asst. Attys. Gen., St. Paul, Minn., for state defendant.

John Lee, U. S. Atty. by Deborah Kleinman, Asst. U. S. Atty., Minneapolis, Minn., for federal defendant.

ORDER

MILES W. LORD, Chief Judge.

This matter came before this Court on Thursday, September 10, 1981, on the motion of the Department of Public Welfare to modify the preliminary injunction issued by this Court on July 23, 1981. The defendant, Arthur E. Noot, Commissioner of the Minnesota Department of Public Welfare, was represented by Special Assistant Attorneys General Beverly Jones Heydinger and Ellen Dubuque. The defendant, Richard Schweiker, Secretary of Health and Human Services, was represented by Assistant United States Attorneys JoAnn Lach and Deborah Kleinman. Plaintiffs were represented by Louise Dobbe and Michael Fargione of Central Minnesota Legal Services.

This action concerns the eligibility standards applied by the defendant Noot in determining Medical Assistance and AFDC eligibility for children residing in a home with a stepparent. After argument, this Court issued a preliminary injunction on July 23, 1981, which requires the defendant Noot to make a factual determination of need and available income before he may terminate AFDC or Medical Assistance benefits to the plaintiffs. This determination is to be made in accordance with the standards established by the Defendant Noot in his AFDC Manual at IV-K, rather than according to his new standards.

The defendant Noot now moves to modify the procedures for determining need and available income which are contained in the July 23 injunction. If the motion were granted, a significant change would occur in the method of counting earned income. Under the existing injunction (the old system), the agency may count as available only net earned income; money spent on items such as state and federal income tax, social security tax, transportation costs, and other reasonable work expenses cannot be considered as income available to support the needy child. The modification proposed by the defendant Noot would permit a deduction of no more than $75 from "earned income" of a stepparent, regardless of the stepparent's actual work expenses. Gross income minus $75 would be counted by the agency whether or not it was in fact available to meet the needs of the child. This modification is requested on the basis of new congressional legislation, § 2306 of the Omnibus Budget Reconciliation Act of 1981.

This ill-conceived system assumes that children can buy food, groceries, and medicines with money which is withheld from their stepparents' paychecks for taxes, social security, and other reasonable work expenses. It is totally inconsistent with any previous Congressional or state pronouncements as to the definition of the standard of need. To the extent that monies are counted as income which are not available to buy the necessities of life, the "standard of need" is meaningless. This procedure not only encourages the adults in an AFDC family to stop working but forces them to stop work or to allow their children to go hungry. They must be, in effect, totally on welfare and not help themselves at all, or their children must go without. The wisdom, the foresight, and the legality of the federal law is not for decision here, at this time. The propriety and legality of the state's enforcing it, under circumstances existing in Minnesota, is highly questionable.

For the purpose of calculating family income, resources, and expenses, § 2306 of the Omnibus Budget Reconciliation Act of 1981 provides as follows:

the State agency shall take into consideration so much of the income of the dependent child's stepparent living in the same home as such child as exceeds the sum of (A) the first $75 of the total of such stepparent's earned income for such month (or such lesser amount as the Secretary may prescribe in the case of an individual not engaged in full-time employment or not employed throughout the month), (B) the State's standard of need under such plan for a family of the same composition as the stepparent and those other individuals living in the same household as the dependent child and claimed by such stepparent as dependents for purposes of determining his Federal personal income tax liability but whose needs are not taken into account in making the determination under paragraph (7), (C) amounts paid by the stepparent to individuals not living in such household and claimed by him as dependents for purposes of determining his personal income tax liability, and (D) payments by such stepparent of alimony or child support with respect to individuals not living in such household.

The United States Department of Health and Human Services has issued draft amendments to its regulations to implement this change. The draft amends 45 C.F.R. § 233.20(a)(11)(vi), and instructs the state agency to calculate the grant as follows:

(vi) Whenever a stepparent of an AFDC child is living in the child's home, provide for the disregard of: (a) The first $75 of the gross earned income of the stepparent who is living in the home and employed full-time. The State agency shall have in place a procedure under which it determines and

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