Huber v. Blinzinger

• Decision Date: 08 April 1985
• Docket Number: No. S 82-542.,S 82-542.
• Parties: Aileen J. HUBER, Plaintiff, v. Donald BLINZINGER, as Administrator of Public Welfare; and Robert Goshert as Director of the St. Joseph County Department of Public Welfare, Defendants. Donald L. BLINZINGER, as Administrator of the Indiana State Department of Public Welfare, Third Party Plaintiff, v. Margaret HECKLER, as Secretary of the Department of Health and Human Services; Clyde Downing as Regional Administrator, Office of Family Assistance, Third Party Defendants.
• Court: U.S. District Court — Northern District of Indiana

626 F. Supp. 30

Aileen J. HUBER, Plaintiff, v. Donald BLINZINGER, as Administrator of Public Welfare; and Robert Goshert as Director of the St. Joseph County Department of Public Welfare, Defendants.

Donald L. BLINZINGER, as Administrator of the Indiana State Department of Public Welfare, Third Party Plaintiff, v. Margaret HECKLER, as Secretary of the Department of Health and Human Services; Clyde Downing as Regional Administrator, Office of Family Assistance, Third Party Defendants.

No. S 82-542.

United States District Court, N.D. Indiana, South Bend Division.

April 8, 1985.

Wendell W. Walsh, Legal Services Program, South Bend, Ind., for plaintiff.

Gary L. Shaw, Deputy Atty. Gen., Indianapolis, Ind., Bruce BonDurant, David Kreider, Asst. U.S. Atty., South Bend, Ind., for defendants.

MEMORANDUM AND ORDER

ALLEN SHARP, Chief Judge.

This case is presently before the court on a Motion to Amend and Alter Judgment pursuant to Rule 59(e) of the Federal Rules of Civil Procedure filed December 5, 1984 by the State defendants and a Motion for Relief from Judgment pursuant to Rule 60(b) of the Federal Rules of Civil Procedure filed January 8, 1985 by the Third Party defendants. Both motions seek a dissolution of a permanent injunction entered against the State defendants by order of this court on November 28, 1984 and judgment in their favor as a result of a change in federal law and regulations. All parties have fully briefed the issues and oral argument was heard on March 5, 1985 at which time the permanent injunction issued in this case was stayed.

In its Memorandum of Decision and Order entered on November 28, 1984, this court held that the policy of the Indiana Department of Public Welfare (DPW) considering Old Age, Survivor and Disability Insurance (OASDI) benefits received by a representative payee on behalf of a child as "income" to an AFDC applicant and his or her family for the purpose of calculating AFDC benefits was in violation of applicable federal law. More specifically, the court found that the DPW policy of deeming income was in conflict with federal statutes and regulations governing the conduct of a representative payee and limited its decision accordingly. On July 18, 1984, Congress passed the Deficit Reduction Act of 1984 which contained the following provision:

That in making the determination under 42 U.S.C. § 602(a)(7) with respect to a dependent child and apply 42 U.S.C. § 602(a)(8) , the State agency shall (except as otherwise provided in this part) include —

(A) any parent of such child, and (B) any brother or sister of such child, if such brother or sister meets the conditions described in clauses (1) and (2) of 42 U.S.C. § 606(a) , if such parent, brother, or sister is living in the same home as the dependent child, and any income of or available for such parent, brother or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 205(j) in the case of benefits provided under Title II).

Section 2640 of the Deficit Reduction Act of 1984. The issue before the court is what effect, if any, this provision has on this court's order of November 28, 1984.

Section 205(j) of Title II, 42 U.S.C. § 405(j), establishes the payment of OASDI benefits to a representative payee for an individual entitled to receive the benefits. As indicated in the Deficit Reduction Act provision, notwithstanding the requirements under 42 U.S.C. § 405(j) for the purposes of AFDC eligibility, OASDI benefits made to a representative payee on behalf of a member of the AFDC assistance unit must be counted as income. In recent interim regulations, the Secretary of Health and Human Services further highlighted the requirement to consider OASDI benefit payments to a representative payee on behalf of a member of an AFDC assistance unit. In the comments to the regulations regarding AFDC assistance, the Secretary stated:

All of the income and resources of the individuals required to be included in the assistance unit must be considered in determining eligibility and payment for the assistance unit. In this connection, the statute specifically provides for the inclusion of title II benefits, notwithstanding 42 U.S.C. § 405(j) . When title II benefits are paid to a representative payee on behalf of a member of the assistance unit and the payee lives in the same household as the assistance unit, the title II benefits must be counted as income. When the representative payee does not live in the household, the title II benefits are included only to the extent that the payee makes them available for the support of the beneficiary. Conforming changes in title II regulations will be published shortly.

49 Fed.Reg. 35588-89 (September 10, 1984). Thus, under Section 2640 of the Deficit Reduction Act and the Secretary's regulations and interpretations thereof, the DPW's policy of considering OASDI benefits received by a representative payee on behalf of a child as "income" to an AFDC applicant or his or her family for the purposes of calculating AFDC benefits was required by federal statute.¹ Accordingly, since the underlying basis for the issuance of the permanent injunction in this case has been undermined by the Deficit Reduction Act of 1984, the permanent injunction must be dissolved.

The plaintiff maintains, however, that the permanent injunction in this case should be reinstated because Section 2640 (1) creates an irrebutable presumption which denies plaintiff's due process rights; and (2) did not repeal Sections 205(j) and 208(e) of the Social Security Act so that plaintiff would be forced to violate a criminal statute by the application of Section 2640. This court does not find these arguments persuasive.

Section 205(j) of the Social Security Act provides that:

When it appears to the Secretary that the interest of an applicant entitled to a payment would be served thereby, certification of payment may be made, regardless of the legal competency or incompetency of the individual entitled thereto, either for direct payment to such applicant, or for his use and benefit to a relative or some other person.

42 U.S.C. § 405(j).

Section 208(e) of the Social Security Act provides, in relevant part:

Whoever —

* * * * * *

(e) having made application to receive payment under this subchapter for the use and benefit of another and having received such a payment, knowingly and willfully converts such payment, or any

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