Harbolic v. Berger

• Decision Date: 21 November 1977
• Citation: 400 N.Y.S.2d 780,43 N.Y.2d 102,371 N.E.2d 499
• Parties: , 371 N.E.2d 499 In the Matter of Alfred HARBOLIC, Appellant, v. Stephen BERGER, as Commissioner of the New York State Department of Social Services, et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 780

400 N.Y.S.2d 780

43 N.Y.2d 102, 371 N.E.2d 499

In the Matter of Alfred HARBOLIC, Appellant, v. Stephen BERGER, as Commissioner of the New York State

Department of Social Services, et al., Respondents.

Court of Appeals of New York.

Nov. 21, 1977.

Richard Peyton Whiteley, Yonkers and John T. Hand, Mount Vernon, for appellant.

Louis J. Lefkowitz, Atty. Gen. (Maryellen Weinberg, Samuel A. Hirshowitz and Herbert J. Wallenstein, New York City, of counsel), for Stephen Berger, respondent.

OPINION OF THE COURT

FUCHSBERG, Judge.

This case turns on whether an administrative regulation of the State Commissioner of Social Services, 18 NYCRR 352.19, is in contravention of sections 131-a and 131-i of the Social Services Law because it mandates that income and Social Security taxes withheld from the wages of an employed head of a family in need of a home relief subsidy be regarded as available income only to the extent that it is possible to include them within the strict statutory limitation on the amount of the recipient's work expenses that are reimbursable.

The commissioner, by confirming a decision of the Westchester County Department of Social Services applying the regulation, indicated that the statutes and the regulation are not in conflict. In this proceeding, brought pursuant to CPLR article 78, Special Term upheld the determination; the Appellate Division affirmed. Petitioner now appeals by leave of this court.

Petitioner, a low-income factory worker residing with his wife and two minor children, applied to the county department for a public assistance supplement. Because he was fully employed, his family was eligible only for home relief, a program totally funded by our State and local governments to provide "minimum level subsistence" to needy individuals and families (see Social Services Law, §§ 157, 158; Matter of Reyes v. Dumpson, 40 N.Y.2d 725, 727, 389 N.Y.S.2d 827, 829, 358 N.E.2d 510, 511).

The size of a home relief grant is determined by measuring a family's available financial resources, including work income, against the "standard of monthly need", a term of art used to designate the amount which the department deems necessary to supply the family with basic shelter, heat, food, clothing and other needs for everyday living (Social Services Law, § 131-a). In the case before us, the family's sole resources were the father's earnings. Recognizing that gross earnings usually exceed what is actually available to an employee, the Legislature provided for "allowing appropriate amounts from his earnings for expenses necessary and incident to his employment", limiting that allowance, however, to a maximum of $80 per month unless otherwise required by Federal law or regulation (Social Services Law, § 131-i). ¹

Presumably in implementation of this statute, the State Commissioner promulgated regulation 352.19. In pertinent part, it reads:

"(a) The following expenses incident to employment shall be deducted from gross earnings.

"(1) All non-personal work expenses such as union dues, cost of tools, materials, uniforms and other special clothing required for the job, mandatory fees for licenses or permits fixed by law.

"(2) All personal work expenses such as Federal, State and local taxes, social security taxes, group insurance, child care, meals and transportation."

Acting under section 131-i, but applying regulation 352.19, the county department totaled petitioner's monthly "work expenditures" at $129.20. Of that sum, $62.65 consisted of mandatory payroll deductions on account of income and Social Security taxes; the rest, $66.55, covered transportation to work, union dues, compulsory disability insurance, a dollar a day for lunch and the like. Neither side questions the accuracy or propriety of any of the items which made up the $129.20. It is also agreed that petitioner's gross income came to $481 and that $441 represented his family's "standard of monthly need". Applying the regulation, the county department reduced the $129.20 figure to the statutory $80 ceiling. It then deducted the $80 from the gross earnings of $481, leaving an "available income" of $401. That rendered the petitioner eligible for a monthly grant of $40, which supposedly provided his family with the $441 minimum level set forth in the statute (Social Services Law, § 131-a, subd. 2).

Petitioner complained that in reality, however, the available earnings before subsidy were only $351.80 ($481 less $129.20) and that, even after adding the $40 subsidy, the family would end up with a shortfall of $49.20 from the standard certified as necessary to sustain his family.

There is no challenge to the statutory $80 ceiling. The petitioner accepts it as a reasonable means of encouraging recipients to control the total amount of their reimbursable expenses (accord Roundtree v. Berger, D.C., 420 F.Supp. 282, affd., 430 U.S. 912, 97 S.Ct. 1322, 51 L.Ed.2d 590). Rather, he takes issue with the inclusion of withheld income and Social Security payments in the category of "expenses incident to employment". He also urges that the tax payments ought first to have been deducted from the gross earnings for the purpose of reaching the amount from which the work-related expenses (not to include tax withholdings) were to be deducted in the process of determining true available income.

Furthermore, he asserts that the pursuit of such a course in this case would have disclosed $418.35 ($481 income less $62.65 withholdings = $418.35) to be the sum from which the $66.55 in nontax work-related expenses should have been deducted. The result, he goes on, would have proved the correct amount of available income to be $351.80 ($418.35 less $66.55) and have called for a supplement of $89.20 instead of the $40 arrived at by the respondents, a difference which, though perhaps small to some, obviously could represent a serious hardship to a family at the very limited income level of the one in this case. On this analysis, petitioner's position is that regulation 352.19, by compelling serious distortion instead of reasonable evaluation in the denomination of what is "available" to meet the "standard of monthly need", frustrates the intent of subdivision 2 of section 131-a of the Social Services Law. ²

In appraising that analysis, we first note that section 131-i of the Social Services Law is silent on the items to be budgeted as "expenses necessary and incident to * * * employment." It does not specifically list allowable deductions from earnings, nor does it expressly define them (compare Social Services Law, § 366, subd. 2, par. (a)).

Under such circumstances, it is appropriate to examine the intention of the Legislature, if ascertainable (Williams v. Williams, 23 N.Y.2d 592, 598, 298 N.Y.S.2d 473, 478, 246 N.E.2d 333, 336). In doing so, we "look to the entire statute, its legislative history and the statutes of which it is made a part" (Rankin v. Shanker, 23 N.Y.2d 111, 114, 295 N.Y.S.2d 625, 628, 242 N.E.2d 802, 804).

The legislative history of section 131-i of the Social Services Law strongly suggests that the statutory allowance was not intended to include tax withholding as a work expense. It discloses that, when the legislation was still under consideration, the State Executive Department submitted a memorandum in which it set forth a twofold purpose: "The bill removes any potential incentive for persons who are working to voluntarily end their employment or reduce their earnings without good cause in order to receive or increase their welfare payments. It also subjects the allowances for work expenses to a reasonable maximum limit" (1971 McKinney's Session Laws of N.Y., p. 2511). We note too that, on approving the bill, the Governor also emphasized that the statute was "designed to provide increased opportunities for gainful employment to persons who are presently dependent upon the welfare system and to deter gainfully employed persons from leaving their jobs in order to obtain public assistance" (id., pp. 2636-2637).

The first of these purposes is served by limiting allowance for...