Kelley v. Iowa Dept. of Social Services

• Decision Date: 13 April 1972
• Docket Number: No. 55129,55129
• Citation: 197 N.W.2d 192
• Parties: Carrie KELLEY, Appellee, v. IOWA DEPARTMENT OF SOCIAL SERVICES, Appellant.
• Court: Iowa Supreme Court

Page 192

197 N.W.2d 192

Carrie KELLEY, Appellee, v. IOWA DEPARTMENT OF SOCIAL SERVICES, Appellant.

No. 55129.

Supreme Court of Iowa.

April 13, 1972.

Richard C. Turner, Atty. Gen., and Lorna Lawhead Williams, Sp. Asst. Atty. Gen., for appellant.

Donald H. Canning, Waterloo, for appellee.

UHLENHOPP, Justice.

The determinative issue in this appeal is whether a stepparent living with his stepchildren in Iowa has the same obligation as a natural parent to support them.

Mrs. Carrie Kelley has four children and one grandchild. Prior to December 20, 1970, the family in question consisted of these six individuals. Mrs. Kelley received child support for the four children from her former husband in the amount of $195 (all figures are monthly), public assistance in the form of aid to dependent children (ADC) for herself and the four children in an amount not shown, and a separate ADC grant for the grandchild of $76. (The grandchild's grant was not terminated by the Iowa Department of Social Services and will not be considered.) On December 20, 1970, Mrs. Kelley (her then surname does not appear) ceremonially married Mr. Kelley. Thereafter the family consisted of the seven individuals.

Mr. Kelley earned $501.63 net at the time of the hearing in this matter but he had income-connected expense for transportation and union dues of $44.87. He had been previously married and divorced, and his own seven children were with his former wife. He paid her child support of $247 ($217 at time of hearing), and she received ADC in addition in an amount not shown. He also had numerous debts on which he made some payments.

Upon learning of the marriage of Mr. and Mrs. Kelley, a caseworker investigated the ADC grant to Mrs. Kelley and her four children. Under the Department's regulations, the needs of Mrs. Kelley and the four children were computed at $320, of which Mrs. Kelley's former husband paid $195, leaving a remaining need of $125. Then in accordance with its regulations, the Department considered Mr. Kelley's income of $501.63, which it reduced, pursuant to the regulations, by the sum of $44.87 for his income-connected expense, $247 for his child support payment, and $64 for his living allowance in the family. This left $145.76, which was in excess of the remaining need of $125 of Mrs. Kelley and the four children.

Accordingly, the local caseworker recommended termination of the grant to Mrs. Kelley and the four children and gave notice that the Department proposed to terminate the grant. Mrs. Kelley took an administrative appeal and obtained assistance of counsel through the Black Hawk County Legal Aid Society. A hearing was held, attended by Mr. and Mrs. Kelley and their counsel, and the facts were brought out. After the hearing, the grant was terminated. (Payments have continued pending appeal in the courts.)

Mrs. Kelley appealed the Department's order to district court. See Code, 1971, § 239.7 ('The district court shall review the department's decision to determine its legality.'). The district court reversed. Hence the present appeal by the Department from the district court judgment.

The Department claims, and Mrs. Kelley denies, that the income of Mr. Kelley is a 'resource' of his stepchildren which is to be considered in computing the amount of the ADC grant.

In deciding the case, we confine ourselves to the situation in which a stepparent is living with the family. The Department does not claim the stepparent's income could be considered in other situations in the absence of actual contributions by him, and could not successfully so claim in the face of regulations which we will presently consider. 45 C.F.R. § 233.20(a)(3)(ii)(c), § 233.20(a)(3)(vi)(b).

We are confronted with several legal problems. What law is applicable--Iowa, federal, or both? Can the income of a stepparent be considered under applicable law? What obligation to support does a stepparent have under Iowa law? Must the Department, in considering a stepparent's income, allow deduction of the stepparent's debts? To what result does application of the legal principles lead us in the case at bar?

I. Applicable Law. Originally, Congress created a grant-in-aid program under which States could establish programs to aid needy families with children and obtain federal financial assistance in accordance with a prescribed formula. The States were not, of course, required to establish such programs, but if they did and desired federal cost-sharing, they had to follow guidelines set out in the federal statute and in the regulations promulgated thereunder by the United States Department of Health, Education, and Welfare (HEW). 42 U.S.C.A. §§ 601--610; 45 C.F.R. Part 203 et seq. The federal statute provides for termination of federal cost-sharing if a State does not abide by the guidelines. 42 U.S.C.A. § 604.

Iowa established an ADC program by statute, and the Iowa Department of Social Services promulgated regulations under that statute. Code, 1971, ch. 239; 1971 Iowa Dept'l Rules 928--933. HEW approved the Iowa program and the United States and Iowa have been sharing the cost.

The present litigation involves a dispute over the Department's consideration of the income of a stepparent who is living with the family. In addition to federal and Iowa statutes and regulations relative to ADC, Iowa has substantive statutory and common law regarding the general obligation of stepparents to support stepchildren. We have no difficulty on the choice-of-law problem regarding the latter body of law--the substantive obligation of stepparents generally. Clearly, Iowa law on that subject is applicable. But the choice-of-law question is more puzzling as to the former body of law--the federal statute and regulations regarding the federal grant-in-aid program vis-a-vis the Iowa statute and regulations regarding the Iowa ADC program.

Most disputes of this sort arise in the federal courts. The state statute and regulations are there tested against the Federal Constitution, statute, and regulations. If the state statute or regulations are found wanting, the relief granted is usually an injunction against state use of federal funds or against further granting of federal funds to the state, or, if the state plan is unconstitutional, against continuation of that plan. Rosado v. Wyman, 397 U.S. 397 at 420--423, 90A S.Ct. 1207 at 1221--1223, 25 L.Ed.2d 442 at 460--461.

A constitutional challenge is not involved here, but Mrs. Kelley does charge in part that the Iowa statute and regulations do not square with the federal statute and regulations. Such can make such a challenge in the Iowa administrative and judicial tribunals, and in such event the federal statute and regulations are to be applied. But if she is successful in that challenge, is the only relief an injunction against use of federal funds? We need not decide that interesting question because of the result we reach on the merits.

Mrs. Kelley also charges that the Iowa regulations are invalid under the Iowa statute. Manifestly as to that charge, we apply the Iowa statute. We think that if Mrs. Kelley is successful in that challenge in whole or in part, she is entitled to judgment requiring the Department to compute her grant without reference to the part of Mr. Kelley's income not in fact applied to the support of the family.

We thus hold that Iowa substantive law is to be applied in ascertaining the general obligation of a stepparent to support; the federal statute and regulations are to be applied in testing the Iowa statute and regulations, at least as to federal funding; and the Iowa statute is to be applied in testing the Iowa regulations. We proceed, therefore, to consider whether the income of a stepparent can be considered under the federal statute and regulations and under the Iowa statute.

II. Can Stepparent's Income Be Considered? The presence of a stepfather in the family or some other 'man in the house' has resulted in a collision between a desire to require such a person to apply his income to the support of the spouse and children with whom he lives and a desire to see that needy children in fact receive support.

Two aspects of ADC are involved in cases of this kind: the Eligibility of a family group for any ADC and the Amount of ADC of an eligible family. Comprehensive of the case requires understanding of both aspects.

(a) Eligibility. ADC eligibility depends on the existence of a 'dependent child,' who is defined thus in 42 U.S.C.A. § 606(a):

The term 'dependent child' means a needy child (1) who has been deprived of Parental support or care by reason of the death, continued absence from the home, or physical or mental incapacity of a Parent, and who is living (in any of several specified homes) and (2) (who is within a certain age). (Italics added.)

The statute appears to require that a child be deprived of the care or support of his own Parent. The statute uses the term 'stepfather' or 'stepmother' where such relationship is intended, but uses the term 'parent' here. 42 U.S.C.A. § 606(a).

Various states, confronted with the problem of stepfathers and other men living with ADC families, attempted by statute to enlarge the term 'parent' to include a substitute parent such as a stepfather or other man in the house. The United States Supreme Court ruled out such attempts unless the substitute parent was 'an individual who owed to the child a state-imposed legal duty of support.' King v. Smith, 392 U.S. 309, 329, 88A S.Ct. 2128, 2139, 20 L.Ed.2d 1118, 1132.

After King was decided, HEW promulgated regulations delineating the 'state-imposed legal duty of support' in the stepparent situation in 45 C.F.R. § 203.1(a):

A State plan for aid and services to needy families with children . . . must provide that the determination whether a child has been deprived of parental support or care . . . will be made only in relation to the child's natural or adoptive parent, or in relation to a child's...