Redding v. Burlington County Welfare Bd.

• Decision Date: 30 July 1974
• Citation: 65 N.J. 439,323 A.2d 477
• Parties: Elijah REDDING, et al., Plaintiffs-Respondents, v. BURLINGTON COUNTY WELFARE BOARD, a body corporate and politic, Defendant-Appellant.
• Court: New Jersey Supreme Court

Page 439

65 N.J. 439

323 A.2d 477

Elijah REDDING, et al., Plaintiffs-Respondents, v. BURLINGTON COUNTY WELFARE BOARD, a body corporate and politic, Defendant-Appellant.

Supreme Court of New Jersey.

Argued June 3, 1974.

Decided July 30, 1974.

John B. Mathews, Palmyra, for defendant-asppellant.

Murray J. Klein of Camden Regional Legal Services, Camden, for plaintiffs-respondents.

The opinion of the Court was delivered by

SULLIVAN, J.

This appeal involves the issue of whether a county welfare board is empowered under applicable federal and state legislation to recoup overpayments of welfare made to recipients of assistance under the Aid to Families with Dependent Children (AFDC) program. The Superior Court, Law Division, held that the Burlington County Welfare Board had no such power and in instituting civil suits to recover overpayments it acted in violation of its authority under both the Federal Social Security Act and implementing State act. Redding v. Burlington Cty. Welfare Bd., 123 N.J.Super. 572, 304 A.2d 205 (1973). The Appellate Division affirmed essentially for the reasons expressed in the trial court's opinion. 126 N.J.Super. 152, 313 A.2d 221 (1973). Certification was granted by this Court. 64 N.J. 504, 317 A.2d 717 (1974).

The AFDC program is one of a series of aid and assistance programs established under the Social Security Act of 1935. 42 U.S.C.A. §§ 301--1396. The category singled out for welfare assistance by AFDC is the 'dependent child' who is defined in the act as an age-qualified 'needy child' who has been deprived of parental support or care and who is living with any one of several listed relatives.

Participation in the program by a state is on a voluntary basis. However, once a state elects to establish an AFDC program and takes advantage of the substantial federal funds available for distribution to needy children, it is required to submit an AFDC plan for administration of the program to the Secretary of Health, Welfare and Education (H.E.W.) for approval. The plan must conform with the several requirements of the Social Security Act as implemented by rules and regulations promulgated by H.E.W.

Every state in the Union has elected to participate in the AFDC program. New Jersey adopted its plan of Assistance for Dependent Children in 1959, N.J.S.A. 44:10--1 et seq., under which the county welfare boards administer the program subject to the supervision of the Department of Institutions and Agencies which has adopted general policies, rules and regulations for carrying out the purposes of the act.

Pursuant to the statutory authorization granted it, the Burlington County Welfare Board has been administering the AFDC program in that county. However, commencing in 1972 the Board began to file suits against particular AFDC welfare recipients alleging that they had received payments in excess of amounts authorized by law. In each suit the Board sought to obtain a civil judgment for the amount of the overpayment. To date more than 100 such suits have been filed by the Board. ¹

A number of the defendants in these suits then filed a class action in the Law Division to restrain the prosecution of this type of action on the ground that the Board has no power or authority under the Social Security Act, state law or applicable federal or state regulations, to bring a civil suit to recover AFDC overpayments made to welfare recipients. It was also charged that these suits violated plaintiffs' rights to due process and equal protection.

The Board's position, simply stated, was that it not only had the power but the duty to obtain civil judgments for these overpayments. It concedes that it could not collect on any such judgment by reducing current welfare payments, but it did asset the power to reduce its claim for overpayment to a civil judgment 'so that it will have the benefit of the lien thereby created, if, as and when the welfare recipient ever acquires assets or resources sufficient to remove him from the welfare roles (sic) and to permit a recovery by way of execution as provided by law as in the case of any judgment debtor.'

As heretofore noted, the trial court held that the AFDC provisions of the Social Security Act, as implemented by H.E.W. regulations, did not permit the bringing of a suit to recover overpayments made to AFDC welfare recipients, nor did the State act provide for such recovery even if it were permitted by federal law.

Our analysis of the relevant court decisions and other authorities leads us to a contrary result. It is clear that a state participating in the AFDC program can establish proper procedures for the rocovery not only of overpayments, but of basic AFDC grants. Snell v. Wyman, 281 F.Supp. 853 (S.D.N.Y.1968), aff'd without opinion, 393 U.S. 323, 89 S.Ct. 553, 21 L.Ed.2d 511 (1969); Charleston v. Wohlgemuth, 332 F.Supp. 1175 (E.D.Pa. 1971), aff'd without opinion, 405 U.S. 970, 92 S.Ct. 1204, 31 L.Ed.2d 246 (1972). In each of these cases state statutes and regulations imposing an obligation on AFDC recipients to repay welfare grants out of specified kinds of assets were upheld as not being in conflict with the Federal Social Security Act.

Cases dealing with state provisions allowing recovery of Overpayments of AFDC welfare assistance uniformly support the right of the state to recoup such overpayments provided the method of recovery does not diminish present or future AFDC grants below actual need.

In Holloway v. Parham, 340 F.Supp. 336 (N.D.Ga.1972), the court sustained as constitutionally valid on its face a Georgia statute which permitted the bringing of a civil suit to recoup AFDC overpayments.

The court held that since the statute required the welfare director to consider the need of dependent children before recouping AFDC overpayments and to waive repayment if there was need, the statute was consistent with the Social Security Act and H.E.W. regulations and also complied with the equal protection and due process clauses of the Fourteenth Amendment. To the same effect are Cooper v. Laupheimer, 316 F.Supp. 264 (E.D.Pa.1970) and Bradford v. Juras, 331 F.Supp. 167 (D.Or.1971) both of which upheld the right of a participating state to recover AFDC overpayments, but held the particular procedures for recoupment to be illegal in failing to assure current basic needs.

In National Welfare Rights Organization v. Weinberger, 377 F.Supp. 861 (D.C.Dist.Col.1974), a challenge to the validity of 45 C.F.R. § 223.20(a)(12) (i), 38 Fed.Reg. 22010 (Aug. 15, 1973) promulgated by H.E.W. covering recoupment by a state of AFDC overpayments, was upheld since the regulation permitted the state to recover the overpayment by reducing current assistance payments without regard to the effect of such reduction on present need. However, the right of a state to recover incorrectly paid assistance...