Lilly v. Wisconsin Dept. of Health and Social Services

• Decision Date: 19 December 1995
• Docket Number: No. 95-1025-FT,95-1025-FT
• Citation: 543 N.W.2d 548,198 Wis.2d 729
• Parties: Urlene LILLY, Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Respondent-Respondent.
• Court: Wisconsin Court of Appeals

Page 548

543 N.W.2d 548

198 Wis.2d 729

Urlene LILLY, Petitioner-Appellant, v. WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES,

Respondent-Respondent.

No. 95-1025-FT.

Court of Appeals of Wisconsin.

Submitted on Briefs July 21, 1995.

Opinion Released Dec. 19, 1995.

Opinion Filed Dec. 19, 1995.

Appeal from an order of the circuit court for Milwaukee County: Thomas P. Doherty, Judge.

For the petitioner-appellant the cause was submitted on the briefs of Coral D. Pleas of Legal Action of Wisconsin, Inc., of Milwaukee.

For the respondent-respondent the cause was submitted on the briefs of Donald P. Johns, Assistant Attorney General.

Before WEDEMEYER, P.J., and FINE and SCHUDSON, JJ.

WEDEMEYER, Presiding Judge.

Urlene Lilly appeals from a circuit court order affirming a decision of the Department of Health and Social Services (DHSS), which affirmed the decision of the Milwaukee County Department of Social Services (the county) to terminate her Aid to Families with Dependent Children (AFDC). The county terminated Lilly's AFDC benefits when she failed to submit a completed income worksheet by the county's deadline. Pursuant to this court's order dated May 10, 1995, this case was submitted to the court on the expedited appeals calendar. Because once Lilly submitted the completed form to the county, the county was required to redetermine her benefits pursuant to WIS.ADM.CODE §§ HSS 201.09(3)(b) & (c), we reverse.

The facts necessary to resolve this appeal are undisputed. Lilly applied for AFDC benefits prior to July 1993, and the county determined that she was eligible for those benefits. On August 6, 1993, the county financial aid worker assigned to Lilly's case provided her with a "Request for Verification Letter." The letter specifically asked Lilly to complete a "Self Employment Income Worksheet" so that it could determine if she was earning income from Akeem Enterprises, a business owned by her brother-in-law. Lilly was advised that the deadline for returning the form to the county was September 6, 1993.

Lilly failed to return the completed worksheet to the county by the deadline. On September 14, 1993, the county notified Lilly that her AFDC benefits would terminate on October 1, 1993. Lilly failed to provide the county with a completed worksheet in a meeting on September 15, 1993, but she did submit the form on September 23, 1993. ¹ The worksheet showed that Lilly received no income from Akeem Enterprises. However, the county declined to redetermine Lilly's benefits after she provided the necessary information, and her benefits were terminated on October 1, 1993.

Lilly appealed the termination of her benefits to DHSS. DHSS held a hearing on October 7, 1993. On October 28, 1993, DHSS affirmed the county's decision, determining that Lilly had failed to provide financial information to the county in a timely manner, and that, as a result, the county had properly terminated her benefits. DHSS did not, however, address whether Lilly's submission of the completed form on September 23, 1993, required a redetermination of her eligibility for benefits.

Lilly sought circuit court review, arguing that she submitted the required financial information prior to the actual termination of her benefits and that once she had done so, DHSS should have redetermined her eligibility for benefits under WIS.ADM.CODE § HSS 201.09(3)(b). WIS.ADM.CODE § HSS 201.09(3) sets forth the circumstances under which an AFDC recipient's eligibility "shall be redetermined." Subsection (b) provides that the recipient's eligibility shall be redetermined "[p]romptly after a report is obtained which indicates changes in the recipient's circumstances that may affect eligibility[.]" The circuit court held that, for Lilly, "[n]o such change" in her circumstances had occurred. The circuit court reasoned:

[Lilly]'s benefits were terminated not because her income was previously too high and subsequently dropped down. Her benefits were terminated because [she] failed to comply with the verification procedures. Therefore, [Lilly]'s argument must fail.

The circuit court concluded that Lilly would be eligible for redetermination six months from the date of her initial eligibility. See WIS.ADM.CODE § HSS 201.09(3)(d) (recipient's eligibility shall be redetermined "within 6 months from the date initial eligibility is determined and every 6 months thereafter").

On appeal, Lilly renews her argument that her submission to the county of the completed financial statement on September 23, 1993, was a change in her circumstances that could affect her eligibility such that DHSS was required to redetermine her eligibility for benefits. We agree. We also conclude that the agency should have redetermined her eligibility for benefits under WIS.ADM.CODE § HSS 201.09(3)(c) (a recipient's eligibility "shall be redetermined ... [a]t any time the agency can justify the need.")

In an appeal involving an administrative agency's decision, this court reviews the decision of the administrative agency, not that of the circuit court. Wisconsin Pub. Serv. Corp. v. Public Serv. Comm'n, 156 Wis.2d 611, 616, 457 N.W.2d 502, 504 (Ct.App.1990). This court generally defers to an agency's interpretation of its rules, Pfeiffer v. Board of Regents, 110 Wis.2d 146, 155, 328 N.W.2d 279, 283 (1983), but we will not defer to an interpretation that "directly contravenes the words of the statute, is clearly contrary to legislative intent, or is otherwise unreasonable or without rational basis." Lisney v. LIRC, 171 Wis.2d 499, 506, 493 N.W.2d 14, 16 (1992).

We conclude that the administrative agency's refusal to redetermine Lilly's eligibility for benefits after she filed the completed form is without support in the statutes and the administrative regulations, and is without rational basis. The AFDC program is designed to:

encourag[e] the care of dependent children in their own homes or in the homes of relatives by enabling each State to furnish...