Georgia Department of Human Resources, DAB No. 995 (1988)


	       DEPARTMENTAL APPEALS BOARD

	 Department of Health and Human Services


SUBJECT:  Georgia Department of   DATE:  November 4, 1988 Human
	  Resources Docket No. 88-40 Decision No. 995

			DECISION

The Family Support Administration (FSA or Respondent) disallowed $1,008
which the Georgia Department of Human Resources (Georgia or Appellant)
claimed under Title IV-A of the Social Security Act (Aid to Families
with Dependent Children (AFDC)).  The disallowed amount represented
corrective payments ordered by Georgia courts for two AFDC
beneficiaries, based on the position that a part of the beneficiaries'
Social Security disability and veterans' benefits should not have been
considered in computing the AFDC payments.  FSA took the position that
these benefits did not qualify to be disregarded in computing AFDC
benefits.  Although the amount in dispute is small, the issue
potentially has substantial consequences and has been the subject of
litigation in other states.  The Georgia Legal Services Program (Amicus)
submitted a brief in support of Appellant's position here.

Based on our review of the evidence and argument in the record, and the
relevant provisions of the Social Security Act, we have determined that
FSA's interpretation of the Act is reasonable, and we uphold the
disallowance.  As we explain below, the central focus of this dispute
concerns whether the term "child support payments," part of which may be
disregarded when calculating AFDC, is broad enough to include the Social
Security and veterans' benefits involved here.  We conclude that while
these benefits might be viewed generally as child support, FSA
reasonably determined that they did not fall within the narrower concept
in the Act.

Introduction Under section 402(a)(8)(A)(vi) of Title IV-A (42 U.S.C.
602(a)(8)(A)(vi)), a state AFDC agency, in determining AFDC eligibility
--

     . . . shall disregard the first $50 of any child support payments
     received in such month with respect to the dependent child or
     children in any family applying for or receiving [AFDC] (including
     support payments collected and paid to the family under section
     457(b)) . . . . (emphasis added)

This provision is commonly called the AFDC "disregard," and has the
effect of increasing a beneficiary's income by up to $50 a month.
Section 457(b) (42 U.S.C. 657(b)), cited in the provision quoted above,
is part of a separate title in the Act (IV-D, Child Support and
Establishment of Paternity).  This provision (called "pass-through" by
FSA to distinguish it from the "disregard" provision) provides that the
first $50 of periodic child support collections shall be paid to the
family without affecting eligibility for other assistance.  Both
provisions of law were added to the Social Security Act by section 2640
of the Deficit Reduction Act of 1984 (Pub.L. No. 98-369) (DEFRA).

The dispute here primarily concerns what the term "child support
payments" -- the first emphasized phrase in the quote above --  means
for purposes of the disregard provision.  Essentially, FSA's position is
that it covers only direct support payments owed by an absent parent (an
interpretation which, indeed, was pressed in litigation by Appellant
until Georgia's courts determined otherwise).  Under this reading, the
disregard is an incentive for AFDC recipients to assist support
enforcement under Title IV-D.  Now, Georgia would read the phrase more
broadly to cover the Social Security and veterans' payments involved
here.  In part, Georgia relies on the second, parenthetical, phrase
emphasized above, arguing that this parenthetical phrase also, and more
specifically, covers the kind of payments FSA speaks of, so that the
first phrase must cover something broader.

Background facts

The basic facts are undisputed.  An AFDC participant challenged the
refusal of a county welfare agency (a division of Appellant) to apply
the disregard provision to disability insurance benefits under Title II
of the Social Security Act.  In September, 1985, the Superior Court of
Fulton County, applying State law, found that these payments should have
been considered child support subject to the disregard provision, and
ordered recalculation of plaintiff's AFDC benefits.  Later, the same
court issued a similar order for an AFDC participant who sought to apply
the disregard provision to veterans' dependents' benefits. Meanwhile,
Georgia had appealed the first decision to the Georgia Court of Appeals,
which affirmed the Superior Court's ruling.  The Georgia Supreme Court
declined to hear the case.  FSA was not a party to any of this
litigation.  In April, 1987, Appellant claimed federal financial
participation in the corrective payments.  Appellant's Brief, pp. 2-4;
Respondent's Brief, pp. 2-6.  Respondent disallowed the claim on the
bases that the Title II and veterans' benefits were not child support
within the narrow meaning of the AFDC and Title IV-D programs; the
payments were not otherwise within the scope of the programs; and
Respondent had not been enjoined by the courts involved.

Related litigation

A federal district court, and the Eighth Circuit Court of Appeals,
considered a case quite similar to the ones before us and essentially
upheld the FSA position.  Todd v. Reagen, CA No. 85-300-A (S.D. Iowa,
December 18, 1986),  aff'd sub nom. Todd v. Norman, 840 F.2d 608 (8th
Cir., 1988), rehearing and rehearing en banc denied, May 20, 1988.  In
this class action, AFDC beneficiaries sought to have Social Security
children's insurance benefits, payable because of the disability of the
children's fathers, declared child support payments for purpose of the
disregard provision.  The district court found FSA's interpretation of
the provision -- essentially the same interpretation presented here --
permissible and a "harmonious construction of the Act." Todd v. Reagen,
supra at p. 3 (see Respondent's Supplement to Appeal File, item 4).  On
appeal, the 8th Circuit affirmed, rejecting an argument that the Social
Security benefits were attributable to the work effort of the
non-custodial parent and used for that person's child, becoming for all
practical purposes child support.  The court said:

     . . . it would expand the meaning of "child support payments" far
     beyond its contemporary denotation as a non-custodial parent's
     legal obligation to contribute to the support and maintenance of
     the children.  For example, proceeds from virtually any insurance
     or annuity program that are attributable in part to the work effort
     of the parent could be considered "child support," once payment to
     the dependent children begins.  Indeed, under appellants' criteria,
     part of every parent's income could be deemed "child support," a
     result that would transform a carefully crafted legislative concept
     into a generality.  Todd v. Norman, 840 F.2d 608, 610.

The court noted that the insurance benefits in question were payable
regardless of any legal obligation to pay child support and were paid by
the federal government, not the parent;  these factors were inconsistent
with the court's view of the ordinary meaning of "child support
payments."  Id., pp. 611-12.  The court also analyzed the AFDC program
and concluded that Social Security benefits and child support were
intended as separate and distinct sources of income.  Id., p. 611.  In
the absence of evidence of Congress's intent concerning the disregard
provision, the court referred to an earlier, almost identical provision
of the Social Security Act (discussed below) which had expired;  the
court found "little doubt" that the provision was meant as an incentive
for AFDC recipients to help establish paternity and assist in
collections.  Id., pp. 611-12.  The court also acknowledged the HHS
Secretary's "broad authority" to interpret the complex provisions of the
Social Security Act, and found the interpretation "credible and
coherent."  Id., pp. 612, 613.  While the Eighth Circuit's majority
opinion is reasonable and persuasive, we have nevertheless reviewed the
record and arguments here to respond afresh to Georgia's arguments, some
of which appear not to have been presented to the court.

Applicable regulations

HHS published regulations on September 10, 1984 implementing the DEFRA
provisions (which were effective October 1, 1984).  The precise term
"child support payments" is not defined in the regulations.  However, 45
C.F.R. 232.20(a) (1984), which has not been changed, stated:

     Definition.  For purposes of this section, notwithstanding any
     other regulations in this chapter, support collections, monthly
     collections and support amounts for a month mean the assigned
     amount that the support enforcement agency collects from an absent
     parent or spouse on a monthly support obligation, less the
     disregarded sum under section [302.51(b)(l)].  (emphasis added)

Section 302.51(b)(1) is the implementation in the Title IV-D regulations
of the pass-through provision.  The preamble to the quoted definition
specifically tied this regulation to the disregard, indicating that the
disregard was viewed as a pass-through of support collected by the IV-D
agency.  49 Fed.Reg. 35589-90 (September 10, 1984) (discussed below).
FSA's position was that the disregard and the pass-through are two sides
of the same coin:  FSA also argued, without specific rebuttal from the
State, that the kind of federal benefits involved in this case cannot
legally be "assigned" under Title IV-A and are never collected under
Title IV-D, and thus cannot fall within the language of the regulation.
FSA's Brief, pp. 5, 12.  The court in Todd v. Norman took this position
also.  840 F.2d 608, 612.  Georgia's response, which is part of a larger
argument (discussed below) concerning other provisions of the Act and
Congressional intent, is that the regulation should be read as
implementing the second (parenthetical) phrase in the statutory
disregard provision, and as silent on the allegedly broader first
phrase.  We discuss the regulation further in responding to Georgia's
arguments below.

Georgia's arguments and our analysis

	The meaning of "child support payments"

A primary issue in this case is whether FSA reasonably gave the term
"child support payments" a narrow meaning, or whether Georgia's broader
reading should prevail.  Georgia argued that its reading accorded with
statutory intent, that FSA's interpretation was not entitled to
deference, and that FSA (as well as the court in Todd) erred in focusing
on the "underlying obligation" of the payments rather the "character of
the payments" themselves.  Georgia's Brief, pp. 5-10; Reply Brief, pp.
1-7.  All parties acknowledged the lack of specific legislative history.
Georgia's Brief, p. l4;  Amicus Brief, p. 5;  FSA's Brief, p. 19.

We deal first with the issue of deference to FSA. Georgia's point
basically was that deference should not be given (and should not have
been given by the Court in Todd) to FSA's interpretation, particularly
in the absense of an explicit regulatory definition, because in the
State's view Congress's intention is clear and compels a different
result.  Georgia's Brief, pp. 6-8, 16; Reply Brief, pp. 5-7.  However,
what is clear from the record here (including the history of Appellant's
position and the different approaches taken by several levels of state
and federal courts) is that Congress's intent is not so easily discerned
from the face of the statute nor from the legislative history of DEFRA.
In section 1102 of the Social Security Act (42 U.S.C. 1302), Congress
gave FSA (through delegation from the Secretary) broad authority to
resolve ambiguities in this remarkably complex statute.  This Board has
repeatedly determined that we will not substitute our judgement for, nor
overturn, a reasonable interpretation of the agency charged with
administering this intricate statute merely because there may be an
alternative interpretation which arguably also is a permissible
construction.  See, e.g., Missouri Dept. of Social Services, DGAB No.
468 (1983).

Thus, our focus here is on the reasonableness of the FSA position in the
face of the challenge in Georgia's arguments.

As one line of reasoning in support of its position that the statute is
clear, Georgia argued that the veterans' and Social Security benefits
involved in this case undeniably were intended to benefit children, and
that Congress generally sought to help parents support their families
through AFDC.  Georgia's Brief, pp. 9-10.  Against that background,
Georgia termed "irrational" the distinction between allowing the
disregard for support produced directly by a working father, and denying
the disregard for support produced indirectly from benefits to which a
disabled father under Social Security and veterans' programs had become
entitled.  Id., p. 11.

We must reject this argument.  It simply does not respond persuasively
to FSA's position that the disregard is, in context, a specific
incentive to reward and promote cooperation in child support collection
efforts as part of an extensive and well-defined interaction between
Titles IV-A and IV-D.  Rewarding cooperation in seeking "child support
payments" fits concretely into this scheme, while Georgia's alternative
would create from mere ambiguity a very substantial and open-ended
exception.  Whether such an exception might be desirable policy is not
the issue; the point is that in the absence of some clear indication
that Congress has chosen such a policy, it is inherently less reasonable
to stretch the term "child support payments" to cover all imaginable
benefits to children, than it is to read the term to fit, as it easily
does, into an existing specific structure.

There are other factors which favor FSA's interpretation and disfavor
Georgia's:

  -  As is apparent from its very name, DEFRA primarily was meant to
  accomplish deficit reduction.  Georgia acknowledged this.  Georgia's
  Brief in opposition to FSA's reply to Amicus, pp. 3-4.  Georgia's
  substantial expansion of the scope of "child support payments" could
  make the disregard provision an open-ended and very costly bonus --
  not something to be lightly implied as Congress's intent in this
  particular legislation.

  -  There is legislative history related to an earlier enactment which
  supports FSA's view.  Title IV-D was added to the Act by amendments in
  1974 which also added a one-year disregard provision providing that
  $20 of support collected would be paid to the family without affecting
  AFDC eligibility.  Except for the increase in amount, the current
  disregard provision and the old provision were virtually identical,
  and there is legislative history that the Senate Finance Committee
  specifically designed the earlier provision as a demonstration of a
  financial incentive to cooperate in obtaining support benefits.
  Details, undisputed here, are set forth in FSA's Brief at pp. 10-14,
  19-22.  The court in Todd v. Norman was persuaded by this history, and
  specifically found that resort to it was appropriate.  840 F.28 608,
  611.  In implementing the DEFRA version, FSA treated the effort as
  reinstatement of an old concept with a new and slightly larger dollar
  value.  49 Fed.Reg. 35605 (September 10, 1984).  Georgia, however,
  argued that the incentive element was of little importance in view of
  strengthened support enforcement, and that it was inappropriate to
  infer one Congress's intent from actions of another.  Georgia's Brief,
  pp. 17-18; Reply Brief, pp. 7-9.  FSA responded to the first point
  (accurately, we believe) by noting that requirements for cooperation
  are not always heeded, and that "a small carrot may frequently be more
  persuasive than any form of a stick."  FSA's Brief, p. 21.  As to
  Georgia's second point, common sense and case law indicate that we
  need not ignore the earlier, nearly identical enactment in the absence
  of any legislative history of the current law.  U.S. v. Plesha, 352
  U.S. 202. (1957); Todd v. Norman, supra.  Georgia also argued that the
  new provision was different in intention from the old because of an
  alleged interrelationship of the new with the "single family unit"
  (SFU) provision also enacted in DEFRA, but since we reject Georgia's
  SFU argument on its own merits (see discussion below), we also reject
  the effect that position would have here.

  -  The veterans' benefits and Social Security benefits in question are
  paid as a matter of statutory right regardless of any child support
  obligation and even in the absence of such an obligation.  This is
  inconsistent with the common understanding of what child support is
  generally (and particularly in the Title IV-D program), and strongly
  suggests that Congress would have been more explicit had it intended
  Georgia's interpretation.

  -  Georgia's interpretation could not be limited in its application to
  the two types of benefits coincidentally involved here;  assuming
  Georgia was right, there appears to be nothing to distinguish a wide
  range of other benefits, including non-governmental benefits such as
  insurance, trust funds, and annuities.  Again, such an expansion in
  the scope of the Act is unreasonable in the absence of more explicit
  legislative direction.

  -  If the benefits in question are treated as child support, then
  problems arise concerning how the benefits would be treated under
  other provisions of the Social Security Act.  Under section 402(a)(26)
  of the Act (42 U.S.C. 602(a)(26)), an AFDC beneficiary must assign
  rights to support to the state, but section 207(a) (42 U.S.C. 407(a))
  prohibits the assignment of the benefits in question here.  The
  veterans' benefits are subject to a similar prohibition (31 U.S.C.
  3101(a)).  Under section 458(b) of the Act (42 U.S.C. 658(b)), a state
  is entitled to an incentive payment of a portion of support
  collections, but it is questionable whether Congress contemplated that
  states would take part of a person's entitlements under the other
  federal programs.  These and other such problems of statutory
  construction are discussed at some length in FSA's brief (pp. 15-34).
  Georgia offered no direct and substantial rebuttal.  We do not here
  decide whether or not each of these problems is an insurmountable
  obstacle to Georgia's interpretation; again, the point is that these
  factors cumulatively make it appear unlikely that Congress meant the
  disregard to be a general bonus for recipients.

With the general argument discussed above, Georgia presented two
specific arguments on statutory interpretation.  One concerned the two
phrases in the language of the disregard provision itself, and the other
concerned the relationship of the disregard provision to the "standard
filing unit."  We discuss these next.

	The disregard and the pass-through

As noted, section 402(a)(8)(A)(vi) says that the state agency, in making
the AFDC eligibility determination, shall disregard a part of "any child
support payments received . . . (including support payments collected
and paid to the family under section 457(b)) . . . ."   Georgia argued
that the second, parenthetical, phrase fully covered the kind of child
support payments that FSA said were the only payments covered by the
disregard, so that the first phrase must cover some broader category of
payments -- arguably, Social Security and other benefits. The court in
Todd specifically rejected this argument, saying that:

     A more plausible explanation of the parenthetical language exists;
     one that gives the Social Security Act its most comprehensive and
     coherent meaning in light of the entire legislative scheme . . .
     Despite the imperative that all child support payments be assigned
     to the state, instances arise where child support payments are made
     directly to families despite assignment, or where child support
     payments are made before the assignment becomes effective . . .
     regulations establish alternative procedures by which the state can
     collect child support paid directly to the AFDC family [citations
     omitted] . . . the state can collect child support payments outside
     of 42 U.S.C. 657(b), and thus provide a ready explanation for the
     parenthetical language in the amendment.  840 F.2d 608, 612-13.

FSA reiterated this position here.  See, e.g., FSA's Brief, p. 18.  It
was also mentioned in the preamble to the 1984 regulations. Georgia's
response was that while the Todd analysis is "plausible at first blush"
it simply is insufficient to support FSA's interpretation.  Georgia's
Brief, p. 16.  We disagree, for not only is FSA's interpretation
reasonable on its face, but Georgia's alternative suffers by comparison
because of its open-ended consequences lacking in evidence of
Congressional approval.  Viewing the two interpretations in the context
discussed previously makes FSA's interpretation all the more reasonable.

	The "Standard Filing Unit"

A major Georgia argument was that there was a reason why Congress would
have expanded the disregard:  the enactment at the same time as the
disregard, in section 2640(a)(3) of DEFRA, of another deficit reduction
measure called the "Standard Filing Unit" (SFU), codified at section
402(a)(38) of the Act (42 U.S.C. 602(a)(38)).  This section limited the
practice whereby families might increase AFDC benefits by excluding from
the AFDC family unit family members with income who were living with the
dependent child and presumably sharing expenses and resources.  The
provision requires the inclusion of resident parents, brothers and
sisters with income -- including, apparently, the kinds of benefits in
dispute here -- in the filing unit for purposes of determining the need
of the dependent child.  The practical effect was to reduce AFDC for
children in homes where the support benefits of others were available in
the household.

On the face of the Act, there is no explicit linkage between the
disregard and the purpose of the SFU, nor have we been shown any
legislative history of either provision to support Georgia's position.
However, Georgia argued that it was reasonable to assume that Congress
enacted the disregard as a way of mitigating the impact of the SFU.
Georgia's Brief, p. 12; Reply Brief, pp. 2-5.  Georgia based this
speculative linkage in part on dicta in a U.S. Supreme case in which the
SFU was the subject of an unsuccessful constitutional challenge.  In
Bowen v. Gilliard, 483 U.S. __, 107 S.Ct. 3008, 97 L.Ed 2d 485 (1987),
in discussing the impact of the SFU on the family, the Court said,
"[t]he burden of the change was mitigated somewhat by a separate
amendment providing that the first $50 of child support collected by the
State must be remitted to the family . . . ."  107 S.Ct. 3008, 3013.  We
agree with FSA that this is not dispositive of the question of any
controlling linkage, much less Congressional intent.  The Court was
merely observing a fact:  there is a disregard.  The statement merely
begs the question we have here, which is the scope of benefits subject
to the disregard (a matter not at issue in Gilliard).  Indeed, if one
insists on divining from the Court's statement some meaning relevant
here, one may note that the court's statement mentioned only child
support "collected by the state," which would favor FSA's
interpretation, not Georgia's (since the Social Security and veterans'
benefits are not collected by the state as is Title IV-D child support).
FSA also argued that the Court's mitigation quote merely reflected an
alternative Constitutional argument made before the Court (by the U.S.)
that the SFU, if it was a taking of property, was part of a statutory
scheme that provided compensation.  FSA's Brief, p. 26.  This, too, did
not deal with the scope of the "compensation"  -- i.e., the benefits
covered by the disregard provision (and FSA also maintained that the
diminution of governmental benefits by Congress is not subject to the
Takings Clause.  Id.).  For all the foregoing reasons, we conclude that
Georgia has not shown a linkage with the SFU provision which is
sufficient to disturb FSA's otherwise reasonable interpretation of the
scope of the disregard provision.

Other arguments

Georgia argued that the disallowance was invalid because it was based on
an interpretation which was not published as a regulation or otherwise
disseminated as proper notice.  Georgia's Brief, pp. 19-23.  An FSA
Regional Administrator, in a September 18, 1985 memo to the State, had
specifically advised Georgia of FSA's interpretation, effectively
confirming Georgia's own stance in pending litigation.  FSA's Appeal
File, Item 1.  Georgia admitted that the State made the corrective
payments (in early 1987) underlying the disallowed claim after FSA had
specifically warned the State of FSA's interpretation (Id., pp. 21-22),
but argued that the first trial court decision, issued on September 10,
1985 in the Foster case, (albeit not the later Tidwell decision)
preceded such notice.  Aside from the fact that Georgia had already
adopted the FSA interpretation for the specific benefits involved here
before the State's courts rejected it, we note that the regulations
implementing DEFRA, published on September 10, 1984 (prior to the
October 1 effective date of the law), gave notice of FSA's
interpretation (or, at least, were sufficient to give Georgia an
obligation of further inquiry).  The preamble stated that the terms
"support collection," "monthly collections" and "support amounts for a
month" all referred to ". . . the assigned amount that the support
enforcement agency collects on behalf of an AFDC family as payment on
the required support obligation . . . [this] merely represents a
pass-through of support collected by the IV-D agency."  49 Fed. Reg.
35589-90 (September 10, 1984).  There is nothing in the preamble to
indicate that FSA contemplated any other (and certainly no significantly
broader) meaning for the concept of child support.  Whether or not one
might agree with the policy (and we note again that Georgia itself had
urged the interpretation on its own courts, and has legislatively
negated the courts' interpretation), there seems little question that
FSA had articulated the policy from the beginning, and had not merely
developed the policy in response to litigation.  To the extent there is
an issue under the Administrative Procedure Act (5 U.S.C. 552, 553),
FSA's determination was an interpretation of which Georgia clearly had
notice (including notice of the application of the interpretation to the
specific  benefits involved here -- a level of detail which, in any
event, does not appear to be required to be published).

Georgia and the Amicus also argued that FSA could not disallow a
court-ordered payment which was within the "scope" of the program.
Georgia's Reply Brief, pp. 11, 22; Amicus Brief, pp. 7-8.  Georgia
referred to 45 CFR 205.10(b), which provides in part that federal
financial participation is available for:

     (2) Payments of assistance made to carry out hearing decisions . .
     . [and]

     (3) Payments of assistance within the scope of Federally aided
     public assistance programs made in accordance with a court order.

The first quoted provision (section 205.10(b)(2)), strictly speaking, is
not applicable here, since the disallowed corrective payments were those
made in 1987 pursuant to court orders.  Furthermore, although the record
does not show whether administrative hearings were held (and the State
sometimes described the trial court actions as administrative hearings),
the State obviously made some kind of administrative determinations
adverse to the individuals involved, which were then overruled in court
(in actions in which FSA was not a party).  Georgia's Brief, pp. 2-3;
Reply Brief, p. 12.  On the other hand, the second quoted provision
(section 205.10(b)(3)) requires not only a court order, but a payment of
assistance within the "scope" of the program;  Since we are upholding
the FSA position that the court-ordered payments were inconsistent with
FSA's long-standing and reasonable interpretation of the Act, and FSA
was not subject to the court orders , it follows that the payments were
not within the scope of the AFDC program.  We do not believe that
section 205.10(b)(3) established a wholesale right to federal funds in
every instance where a state court disagrees with a substantive federal
funding determination, particularly in the absence of the federal party
as a participant in the case.  The Board's previous applications of
section 205.10(b)(3) generally have dealt with cases where a court has
ordered continued Medicaid payments on behalf of recipients in a
particular provider pending resolution of an appeal by the provider of
its right to participate in the Medicaid program.  There was no dispute
in these cases that payments to the recipients were substantively
correct and authorized by the Medicaid statute aside from the issue of
the status of the provider agreements that were under appeal.  See,
e.g., Ohio Department of Public Welfare, DGAB No. 173 (1981).  Moreover,
in a case involving abortion funding, we concluded that section
205.10(b)(3) could not be applied where a federal appropriation
restriction specifically prohibited the expenditures by the federal
agency.  Joint Consideration -- Abortion Funding, DGAB No. 260 (1982).
Finally, in the context of the fair hearings provided under section
205.10, the regulations specifically distinguish between appeals
involving the meaning and effect of Federal Law or policy and appeals
that merely apply the law to the specific facts of a particular case.
Only in the latter instance would assistance payments be continued
pending a hearing decision.  (45 C.F.R. 205.10(a)(6))  Accordingly, we
conclude that the Agency reasonably interprets section 205.10(b)(3) not
to apply here to overcome a Departmental determination of the
substantive requirements of federal law.

Georgia and the Amicus also argued that family matters, including the
determination of what constitutes child support, should be left to state
law, that such deference is particularly appropriate here because of the
absence of a specific definition of child support, and that Georgia
courts had determined that Social Security benefits could be treated as
child support.  Georgia's Brief, pp. 9-10; Reply Brief, pp. 9-10; Amicus
Brief, pp. 2-4, 6-7.  We do not disagree with the general principle of
deference to state policy in family law matters, nor that Georgia
generally may define and control what is child support in that state.
But it does not follow that Georgia has control over questions of
whether federal funds fall within the ambit of a term used in a federal
program.  The issue here is the allowability under federal law of a
particular cost item, not the handling of child support funding and
family matters within the State.  Since we are persuaded that there is a
reasonable federal interpretation of the law, there is no breach for the
State to fill with its own interpretation. Certain state court cases
described by Georgia (see Reply Brief, pp. 9-10) do not define child
support for federal purposes or purposes of allowability under the
disregard provision:   As the court in Todd v. Norman observed, the
cases dealt with the propriety of substitution of Social Security
disability payments for a father's or husband's support obligations
under court order.  840 F.28 608, 611.  Merely because funds derived
from Social Security or other benefits may be used to meet a person's
support obligation in Georgia does not answer the question of whether
the disregard provision is applicable to such benefits.  There simply is
no basis in law for holding that Georgia may establish as controlling
its own interpretation of federal law in the face of a clear and
reasonable interpretation by the administering agency.

The Amicus argued that this disallowance was improper because federal
payments to a state can only be reduced through the "quality control"
(QC) system.  Amicus Brief, pp. 8-10.  The QC system basically is a
management device for reducing costs by reducing errors in high-volume
AFDC transactions, and involves rewarding (or punishing) states'
performance in relation to a national target error rate.  See 45 CFR
205.40 - 205.44.  The Amicus alleged that the mechanisms in the QC
system, which were not used in this case, were the exclusive means for
effecting a disallowance, and that a double penalty is implied.  Georgia
itself did not raise this argument in its main or reply brief, but did
join the Amicus in the State's reply to FSA's response to the Amicus
brief (pp. 7-9).   FSA's response, which we conclude is correct (and
which Georgia did not specifically rebut), was that the payments here
simply were not within the scope of potential payment errors covered by
the QC system, as described in 45 CFR 205.40(a).  The payments were
corrective payments in closed cases, and thus would never be included in
the universe of allegedly erroneous assistance payments under the QC
system;  thus, there is no possibility of a double penalty.  Where the
QC system is not applicable, there is no reasonable basis to hold that
FSA is deprived of authority to exercise the general disallowance
authority under section 1116(d) (42 U.S.C. 1316(d)) for specific cases.
Cf. Florida Dept. of Health and Rehabilitative Services, DGAB No. 955
(1988).

Conclusion

For the foregoing reasons, we conclude that FSA's position on the
meaning and implementation of the disregard provision was reasonable,
and we uphold the disallowance.

			    ____________________________ Cecilia Sparks
			    Ford


			    ____________________________ Donald F.
			    Garrett


			    ____________________________ Norval D.
			    (John) Settle Presiding Board