Kimmes v. Califano

• Decision Date: 03 July 1979
• Docket Number: Civ. A. No. 77-K-713.
• Citation: 472 F. Supp. 474
• Parties: Zella KIMMES, Plaintiff, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Defendant.
• Court: U.S. District Court — District of Colorado

472 F. Supp. 474

Zella KIMMES, Plaintiff, v. Joseph A. CALIFANO, Jr., Secretary of Health, Education and Welfare, Defendant.

Civ. A. No. 77-K-713.

United States District Court, D. Colorado.

July 3, 1979.

Lenny L. Croce, Golden, Colo., for plaintiff.

Donald M. Hoerl, Asst. U. S. Atty., Denver, Colo., for defendant.

MEMORANDUM OPINION AND ORDER

KANE, District Judge.

Plaintiff was a recipient of Supplemental Security Income on the basis of her disability and low-income, from July 1975 to August 1976, when her benefits were terminated because of alleged in-kind income that placed her above the applicable income limits. The alleged in-kind income arose from plaintiff's housing situation. She lived, in her own household, in a small mobile home owned by her daughter, and for which plaintiff paid all of the expenses— the space rental, license, and taxes, totalling approximately $70 a month, and was responsible for all repairs and other current expenses. In relevant part, the Social Security Administration charged plaintiff with income because of its view that the rental value of the trailer was $150, and that since plaintiff only paid $70 a month, she therefore had in-kind income amounting to $80 a month. Because of the applicable regulations at 20 CFR 416.1125, which sets a ceiling on countable in-kind income at one-third of the current standard payment amount (in 1976, $167.80) plus $20 (the monthly exclusion for unearned income), or $75.93, this lower figure was the amount applied as additional countable income received by plaintiff. On this basis, the Social Security Administration determined that plaintiff's total income placed her outside of Supplemental Security Income eligibility.

Having exhausted her administrative remedies, plaintiff seeks review here pursuant to 42 U.S.C. § 405(g), which gives the district courts jurisdiction to exercise review of Social Security Administration decisions. Applicable law is found in the Social Security Act, 42 U.S.C. §§ 1382 and 1382a, and 20 CRF 416.1101 et seq., particularly § 416.1125.

Does a person who pays all existing shelter expenses receive in-kind income amounting to the difference between those expenses and current market value, where that shelter is owned by the recipient's daughter and provided to the recipient?

Both statute and regulation make in-kind income countable against an applicant's or recipient's eligibility or benefit level. Plaintiff's quarrel is not with this general proposition, and it is doubtful that it would be vulnerable to any sort of attack, as consideration of total income is central to all government benefit programs.

While plaintiff challenges the Social Security Administration's mode of evaluating in-kind income, the Social Security Administration's regulations are valid and generally consistent with the Social Security Act. In effect, those regulations set up a ceiling on the amount of in-kind income which can be imputed to an individual for the value of his or her support and maintenance (i. e., room and board), which equals one-third of the current standard payment (per month) plus the $20 exclusion for unearned income. 20 CFR 416.1125. Under applicable regulation, a person may show that his or her actual in-kind income is less than this presumed value, so that the ceiling operates only to the benefit of the recipient, who can hardly claim injury on its account.

In light of the above, the central issue here is not whether in-kind income is countable or whether it should be valued in one way or another, but whether plaintiff in fact received in-kind income at all.

On the facts of this case, plaintiff did not receive in-kind income equal to the difference between her expenses and her household's current rental value. Where a recipient of government benefits lives in her own household and pays all expenses for doing so, no in-kind income is received on account of the difference between those expenses and the household's current rental value.

The law is clear that income, in-kind or otherwise, must be "actually available" to the welfare recipient in order for it to be counted against his or her eligibility or level of benefits. Numerous regulations that have presumed income or standardized certain expenses have been struck down by the courts as inconsistent with this principle. See, e.g., Van Lare v. Hurley, 421 U.S. 338, 95 S.Ct. 1741, 44 L.Ed.2d 208 (1975) (invalidating a New York regulation assuming lodger's contribution to welfare family's household expenses); Shea v. Vialpando, 416 U.S. 251, 94 S.Ct. 1746, 40 L.Ed.2d 120 (1974) (affirming a Tenth Circuit decision striking down a Colorado regulation that established a standard deduction for workrelated expenses without providing that a recipient could show that his expenses were in fact greater than that presumed amount); Green v. Barnes, 485 F.2d 242 (10th Cir. 1973) (holding that the actually available resource of a welfare recipient's home is the amount of the recipient's equity and not the property's market value); Wilczynski v. Harder, 323 F.Supp. 509 (D.Conn. 1971) (holding that a life insurance policy must be valued at its cash surrender rather than face value).

At first blush, it appears that plaintiff would somehow receive some sort of economic benefit from living in the trailer owned by her daughter; that is, that it would cost her more, perhaps, to live in comparable housing elsewhere. However, no payments were made by the daughter on her behalf and plaintiff received no equity in the property. Instead, plaintiff paid all expenses related to her living in the trailer. In such a situation, it is incongruous to charge her with the trailer's...