Tavarez v. Sipprell

• Decision Date: 26 May 1978
• Citation: Tavarez v. Sipprell, 405 N.Y.S.2d 531, 62 A.D.2d 631 (N.Y. App. Div. 1978)
• Parties: In the Matter of Dona TAVAREZ, Edna Stover and Joan Dorn, on behalf of themselves and all other persons similarly situated, Respondents, v. George G. SIPPRELL, as Commissioner of the Erie County Department of Social Services and Abe Lavine, as Commissioner of the New York State Department of Social Services, and The New York State Department of Social Services, Appellants. Application of Ruby FERGUSON, Respondent, and Lorraine Lindsey, Annie Green, Mianna Battle, Catherine Hundley and Barbara Chambers, Respondents-Intervenors, v. George G. SIPPRELL, as Commissioner of the Erie County Department of Social Services, and Abe Lavine, as Commissioner of the New York State Department of Social Services, and New York State Department of Social Services, Appellants.
• Court: New York Supreme Court — Appellate Division

Page 531

405 N.Y.S.2d 531

62 A.D.2d 631

In the Matter of Dona TAVAREZ, Edna Stover and Joan Dorn, on

behalf of themselves and all other persons

similarly situated, Respondents, v.George G. SIPPRELL, as Commissioner of the Erie County

Department of Social Services and Abe Lavine, as

Commissioner of the New York State Department of Social

Services, and The New York State Department of Social

Services, Appellants.

Application of Ruby FERGUSON, Respondent,

and

Lorraine Lindsey, Annie Green, Mianna Battle, Catherine

Hundley and Barbara Chambers, Respondents-Intervenors, v.George G. SIPPRELL, as Commissioner of the Erie County

Department of Social Services, and Abe Lavine, as

Commissioner of the New York State Department of Social

Services, and New York State Department of Social Services,

Appellants.

Supreme Court, Appellate Division,Fourth Department.

May 26, 1978.

Louis J. Lefkowitz, Atty. Gen., Albany (Elaine L. Weiss, Niagara Falls, of counsel), for appellant Lavine.

Thaddeus J. Szymanski, Buffalo (John J. Barone, Buffalo, of counsel), for appellant Sipprell.

George L. Cownie, Buffalo, for respondents and respondents-intervenors.

Before CARDAMONE, J. P., and DILLON, HANCOCK, DENMAN and WITMER, JJ.

DENMAN, Justice.

Petitioners in both actions are recipients of Aid to Families with Dependent Children (AFDC) as well as recipients of various educational grants from the Federal and State governments.The question presented is whether the amounts by which such educational grants exceed the actual costs of education and education-related expenses may be considered by Social Service agencies as an available resource in determining need for assistance under the AFDC program.We hold that such excess grant funds may be used to offset AFDC assistance.

In Matter of Tavarez v. Sipprell petitioners are recipients of New York State Educational Opportunity Program(EOP) grants in conjunction with their enrollment at the State University of New York at Buffalo.Petitioner Tavarez is also the recipient of a federally funded Basic Educational Opportunity Grant (BEOG).The Erie County Department of Social Services(hereinafter, the Agency) determined that petitioners' educational grants, excluding only an amount attributable to school fees, were available income to be budgeted against their AFDC grants.After Fair Hearings the New York State Department of Social Services(the Department) confirmed the Agency determinations that petitioners had received overgrants of assistance and notified petitioners that their AFDC grants would be discontinued to provide for recoupment of overpayment.

Petitioners instituted an article 78 proceeding as a class action in Special Term, arguing that the Agency may not consider Federal educational grants for any purpose and may consider State grants as an available resource only to the extent that the State grants exceed the amount necessary for bona fide education-related expenses, viz., child care, transportation, lunch money, fees, books and materials.Petitioner Dorn also claimed the cost of extra-curricular activities as a legitimate educational expense.Petitioners conceded that if State grants alone exceeded educational expenses, AFDC grants could be reduced to the extent of the excess.

Special Term agreed with petitioners, holding that Federal educational grants must be totally excluded from computation of petitioners' resources; that the Agency must allow verified education-related expenses such as those enumerated to be compensated by grant funds; and that after deducting such expenses, the Agency could then look to any excess as an available resource for the purpose of reducing the AFDC grant.It held further that the Agency's discontinuance of present AFDC grants to recoup past overpayments was improper in that it failed to take into consideration petitioners' present available income.The Agency and the Department appeal from that determination.

In Matter of Ferguson v. Sipprell, 91 Misc.2d 281, 397 N.Y.S.2d 847, petitioner and her four children are AFDC recipients.During the 1974-1975 school year petitioner was a full-time college student and received a Tuition Assistance Program (TAP) Grant, an EOP Grant, and a BEOG Grant.The Agency determined that petitioner's grant funds were in excess of her verified educational expenses and reduced her monthly assistance accordingly.Following a Fair Hearing the Department affirmed the Agency's determination.

Petitioner then commenced this article 78 proceeding.The motion of Lorraine Lindsey, Annie Green, Mianna Battle, Catherine Hundley and Barbara Chambers to intervene was granted.Intervenors are all recipients of public assistance.Green, Hundley and Battle, like petitioner Ferguson, receive TAP, EOP and BEOG grants; Chambers receives TAP, EOP, BEOG grants as well as a Rosary Hill College award and a National Defense Student Loan (NDSL); Lindsey is not herself a college student, but her son receives TAP, EOP and BEOG grants.Special Term held that the Agency must completely disregard petitioners' Federal grants and loans as available resources in determining their need for public assistance.The Agency and the Department appeal from that determination.

The Agency and the Department argue that under the mandate of 42 U.S.C. § 602(a), par. 7, they are required to examine all income and resources in order to determine a recipient's needs for AFDC.They also rely on 18 NYCRR, 9352.16, which provides, in pertinent part:

"Exemption of income and resources general policy.

"a.All income and resources of an applicant for or recipient of ADC or HR shall be considered in order to determine its availability; such income and resources shall be reasonably evaluated; and, when determined to be available, . . . shall be applied towards meeting the needs of an individual and his dependents . . . .

"b.When the terms of the award, (or)the legislative intent of a government benefit, . . . limits the use of cash income, the social services official shall abide by such restrictions, when verified.The restriction may limit the use of the income to a specified purpose or to a particular member or members of the household."

Respondents contend that only a government grant ¹ which is restricted in use is exempt from consideration and since no such restriction is placed on the funds awarded petitioners here, such funds may be considered in determining need and levels of assistance.

Petitioners contend, however, that respondents are prohibited from considering in any way any Federal grant or loan made or insured under programs administered by the United States Commissioner of Education, and further contend that State grants may be considered only to the extent that they are not necessary for educational purposes.They rely on regulations set forth at 45 C.F.R. 233.20(a)(3)(iv)(b) which provides, in pertinent part:

" . . . (i)n determining the availability of income and resources, the following will not be included as income:

"b.loans and grants, such as scholarships obtained and used under conditions that preclude their use for current living costs; . . ." and

45 C.F.R. 233.20(a)(4)(ii)(d) which provides, in pertinent part:

" . . . (i)n determining eligibility for public assistance and the amount of assistance payment, the following will be disregarded as income and resources:

"d.(a)ny grant or loan to any undergraduate student for educational purposes made or insured under any program administered by the Commissioner of Education."

A virtually identical argument was rejected by a three-judge court in Richman v. Juras, D.C., 393 F.Supp. 349, involving the same Federal regulations relied on by the parties here.Petitioners there were also AFDC recipients as well as recipients of various Federal and State (Oregon) educational grants.In interpreting the meaning of 45 C.F.R. 233.20(a)(3)(iv)(b) and (a)(4)(ii)(d), the court reviewed the legislative history of the amendment of 42 U.S.C. § 1382a(b)(7), ² the basis of the regulations, and concluded that Congress exempted from consideration as income "only scholarship and loan funds actually used to pay tuition and fees."(Richman v. Juras, supra, p. 351.)The legislative history (Public Law 92-603, Social Security Amendments of 1972, 1972 U.S.Code Cong. & Admin.News, Vol. 3)defined the inter-relationship between available income and educational grants, defining income as excluding only "the tuition part of scholarships and fellowships"(id., at 5019).The specific intent expressed is that "the bill would exclude from consideration as income any portion of a grant, scholarship, or fellowship received for use in paying the costs of tuition and fees at any educational institution.Any portion of such payments which are intended for general living expenses, however, would be included as unearned income."(Emphasis added)(id., at 5164).Based on that interpretation, the court went on to find that "no regulation requires the State to pretend that these Federal monies are not also used to pay tuition and fees.The State may not violate regulation 233.20(a)(3)(iv)(b) by ignoring as income State loans and scholarships which are available to be used in meeting current living expenses."(Richman v. Juras, supra, p. 351.)

It seems clear that the exemption is directed only at that portion of a Federal educational grant which is used to pay tuition costs and fees in order to insure that the Social Services Agencies do not attempt to consider those funds as available resources offsetting a living cost grant.Examination of the many cross-references between the applicable Federal and State Social Service regulations and the Federal and State educational grant regulations indicates an overall scheme and common purpose, namely, to provide needy families with dependent children with a decent way of life while at the same time enabling the parents to obtain an education in order to become self-supporting....