IN THE SUPREME COURT OF 

CALIFORNIA

KERRIE REILLY,

Plaintiff and Appellant,

v.

MARIN HOUSING AUTHORITY,

Defendant and Respondent.

S249593

First Appellate District, Division Two

A149918

Marin County Superior Court

CIV 1503896

August 31, 2020

Justice Chin authored the opinion of the Court, in which 

Justices Liu, Cuéllar, and Groban concurred.

Chief Justice Cantil-Sakauye filed a dissenting opinion, in 

which Justices Corrigan and Kruger concurred.
1

REILLY v. MARIN HOUSING AUTHORITY

S249593

Opinion of the Court by Chin, J.

The federal Housing Choice Voucher program is a key 

program in section 8 of the United States Housing Act of 1937. 

(42 U.S.C. § 1437 et seq., as amended by § 201(a) of the Housing 

and Community Development Act of 1974.) Commonly referred 

to as “Section 8,” the program provides low-income families a 

monthly subsidy to pay for a portion of their rent. The amount 

of the subsidy depends, in part, on the income Section 8 families 

receive. The program, which is funded and regulated by the 

United States Department of Housing and Urban Development

(HUD), is administered locally by public housing authorities 

(PHAs). In this case, we address whether a Section 8 

beneficiary’s compensation for providing in-home care for a

severely disabled adult daughter should be excluded from

income in calculating the rental subsidy. For reasons that 

follow, we conclude that it should be excluded and reverse the 

Court of Appeal’s judgment. 

FACTUAL AND PROCEDURAL BACKGROUND

In 1998, plaintiff Kerrie Reilly and her two daughters 

moved into a three-bedroom apartment in Novato and began 

receiving Section 8 housing assistance payments to subsidize 

their monthly rent. Reilly has an adult daughter, K.R., who is 

severely disabled and requires constant supervision. Reilly

receives compensation to provide in-home supportive care for 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

2

K.R. through the state and federally funded In-Home 

Supportive Services (IHSS) program.

In 2004, Reilly’s other daughter, R.R., moved out of their 

subsidized apartment, but Reilly did not inform the Marin 

Housing Authority (MHA), which is responsible for 

administering Reilly’s Section 8 voucher. Five years later, when 

Reilly told MHA that R.R. no longer lived with her, MHA

advised her that her failure to report her daughter’s leaving 

constituted a violation of the program rules. Reilly could only 

stay in the government-subsidized apartment if she paid 

approximately $16,000 in damages to MHA.

Reilly agreed to pay MHA in monthly installments, 

initially starting at $486 and eventually lowered to $150 per 

month at Reilly’s request. In 2010, after Reilly missed an 

installment payment, MHA warned her that future missed 

payments would result in termination of her housing assistance. 

Reilly missed multiple payments in 2012, 2014, and 2015. 

In 2015, Reilly requested that MHA recalculate her rent 

and exclude her IHSS compensation from “income” under the 

relevant federal regulation. (See 24 C.F.R. § 5.609(c)(16)

(2020).) MHA did not respond to this request, but instead served 

Reilly a notice of termination of her Section 8 voucher. After a 

hearing on MHA’s decision to terminate Reilly’s housing 

voucher, the hearing officer upheld the agency’s decision, noting 

that Reilly’s failure to pay amounts under the settlement 

agreement constituted grounds for terminating her housing 

assistance. The hearing officer did not address whether the 

IHSS compensation counted as income, however.

On October 26, 2015, Reilly filed a petition for writ of 

mandate seeking an order requiring MHA to terminate her 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

3

repayment plan and reinstitute her Section 8 voucher; she also 

sought an administrative writ ordering MHA to terminate the 

repayment plan and exclude Reilly’s IHSS payments in 

calculating her income going forward. The trial court rejected

Reilly’s assertion that IHSS payments were excepted from the 

meaning of “annual income” (24 C.F.R. § 5.609(c)(16) (2020)). It 

sustained MHA’s demurrer without leave to amend, and the CA 

affirmed the judgment. (Reilly v. Marin Housing Authority

(2018) 23 Cal.App.5th 425.) Both lower courts ordered “a stay 

in the enforcement of the administrative order terminating 

Reilly’s Section 8 benefits.” MHA later agreed to an extension 

of this stay pending review in this court. 

We granted review, limited to the issue whether IHSS 

payments should be excluded from “annual income” for purposes 

of calculating a Section 8 beneficiary’s home assistance 

payment.

DISCUSSION

A. Overview of Section 8 voucher program

In 1974, Congress added the Section 8 housing program to 

the United States Housing Act of 1937 “[f]or the purpose of 

aiding low-income families in obtaining a decent place to live.” 

(42 U.S.C. § 1437f(a); see generally Friedman et al., Cal. 

Practice Guide: Landlord-Tenant (The Rutter Group 2019) 

¶ 12.) The program gives eligible families either “tenant-based” 

or “project-based” rent subsidies administered locally through 

PHAs. (See Park Village Apartment Tenants Ass’n v. Mortimer 

Howard Trust (9th Cir. 2011) 636 F.3d 1150, 1152–1153 

[overview of Section 8 housing assistance].) “ ‘[T]enant-based 

assistance’ ” is a rent subsidy that is tied to a specific family 

even if the family moves to other suitable housing. (42 U.S.C. 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

4

§ 1437f(f)(7).) “ ‘[P]roject-based assistance,’ ” on the other hand, 

is tied to a specific housing development or unit. (42 U.S.C. 

§ 1437f(f)(6).) We focus on tenant-based assistance, which is at 

issue in this case. 

Under the tenant-based assistance program, at least 75% 

of all admitted families must be “[e]xtremely low[] income,” i.e., 

their income may not exceed 30% of the median income 

calculated by HUD for the relevant area (24 C.F.R. § 5.603(b)

(2020)); and all remaining admitted families must be “[l]ow 

income,” i.e., their income may not exceed 50% of the median 

income. (Ibid.; id., § 982.201(b)(1), (2)(i) (2020) [eligibility and 

targeting].) 

After a Section 8 family selects an eligible rental unit

approved by the applicable PHA, the PHA enters into a contract 

with the rental property owner. That owner “functions as a 

landlord in the private rental market. The owner signs a lease 

with the Section 8 tenant (which includes a HUD Lease/Tenancy 

Addendum) and also signs a Housing Assistance Payments 

(HAP) contract with the Housing Authority.” (Apartment Assn. 

of Los Angeles County, Inc. v. City of Los Angeles (2006) 136 

Cal.App.4th 119, 123.) The PHA gives the subsidy payments 

directly to the property owner. (24 C.F.R. § 982.311(a) (2020).) 

As we explain below (see post, at p. 8), the amount of the 

housing subsidy depends in large part on the “annual income”

the Section 8 family receives or expects to receive. (See 24 

C.F.R. § 5.609(a) (2020); id. § 982.201(a), (b) (2020).) The issue 

is whether the IHSS payments Reilly receives to provide 

services to keep her developmentally disabled daughter at home 

are excluded from income under 24 Code of Federal Regulations

part 5.609(c)(16) (2020). 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

5

B. IHSS

IHSS is a state social welfare program implemented under 

The Burton-Moscone-Bagley Citizens’ Income Security Act for 

Aged, Blind and Disabled Californians, enacted in 1973. (Welf. 

& Inst. Code,1§ 12000 et seq., added by Stats. 1973, ch. 1216, 

§ 37, p. 2904; see County of Sacramento v. State of California

(1982) 134 Cal.App.3d 428, 430–431.) The purpose of the 

legislation is to give the aged, blind and disabled the “assistance 

and services which will encourage them to make greater efforts 

to achieve self-care and self-maintenance, whenever feasible, 

and to enlarge their opportunities for independence.” (§ 12002.) 

IHSS is specifically “designed to avoid institutionalization of 

incapacitated persons.” (Basden v. Wagner (2010) 181 

Cal.App.4th 929, 931.) Providers perform nonmedical 

supportive services for IHSS recipients, such as domestic 

services, personal care services, protective supervision, and 

accompaniment to health-related appointments. (§ 12300; see 

Miller v. Woods (1983) 148 Cal.App.3d 862, 867, disapproved on 

other grounds by Noel v. Thrifty Payless, Inc. (2019) 7 Cal.5th 

955, 986, fn. 15.) 

“IHSS is actually provided under three programs: the 

original IHSS program (the residual program) (§ 12300 et seq.); 

the Medi-Cal personal care services program (PCSP) (§ 

14132.95); and the IHSS Plus waiver program (§ 14132.951).[2]

 

1 All further statutory references are to Welfare and 

Institutions Code unless otherwise noted.

2 Section 14132.951, subdivision (a) provides: “It is the 

intent of the Legislature that the State Department of Health 

Services seek approval of a Medicaid waiver under the federal 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

6

The latter two programs tap into federal funds, and IHSS 

recipients will receive services under the residual program only 

if they do not qualify under the other two programs. (§§ 12300, 

subd. (g); 14132.95, subd. (b); 14132.951, subd. (d).)” (Basden v. 

Wagner, supra, 181 Cal.App.4th at p. 933, fn. 4; see 2 Dayton et 

al., Advising the Elderly Client (2019) § 22:40 (Advising the 

Elderly Client); Calderon v. Anderson (1996) 45 Cal.App.4th 

607, 609–610.)

The State Department of Social Services (Department)

administers the IHSS program in compliance with state and 

federal law. The Department promulgates regulations to 

implement the relevant statutes, which are set out in its Manual 

of Policies and Procedures: Social Services Standards (July 

2019) (MPP). (MPP, §§ 30-700 to 30-785; see Norasingh v.

Lightbourne (2014) 229 Cal.App.4th 740, 744–745.) County 

welfare departments administer the IHSS program with the

Department’s supervision, and determine an applicant’s 

individual needs to authorize necessary services. (Norasingh v. 

Lightbourne, at pp. 744–745; see MPP, § 30-761 [needs 

assessment standards].)

A county welfare department may either obtain and pay 

directly a provider of the supportive services, or pay the 

recipient who hires one. (Basden v. Wagner, supra, 181 

Cal.App.4th at p. 940 [when state pays provider or recipient 

directly, it assumes certain “ ‘employer’ duties”]; MPP, § 30-

 

Social Security Act in order that the services available under 

Article 7 (commencing with Section 12300) of Chapter 3, known 

as the In-Home Supportive Services program, may be provided 

as a Medi-Cal benefit under this chapter to the extent federal 

financial participation is available. The waiver shall be known 

as the ‘IHSS Plus waiver.’ ”
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

7

763.44.) Or, as in this case, it may compensate the parent who 

provides in-home care to her disabled child. (See § 12300, subd. 

(e); MPP, § 30-763.45 et seq.; see also Fam. Code, § 3910, subd. 

(a) [parent’s responsibility extends to a “child of whatever age 

who is incapacitated from earning a living and without 

sufficient means”].) It bears noting that “[t]he vast majority of 

home care is provided by family and friends.” (Advising the 

Elderly Client, supra, § 22:17.)

Reilly’s daughter suffers from a severe developmental 

disorder and obtained authorization for protective supervision, 

i.e., 24-hours-a-day supervision that allows her to remain at 

home safely. (§ 12301.21; MPP, § 30-757.173.) Protective 

supervision involves “observing recipient behavior and 

intervening as appropriate in order to safeguard the recipient 

against injury, hazard, or accident.” (MPP, § 30-757.17; see

Marshall v. McMahon (1993) 17 Cal.App.4th 1841, 1847

[“ ‘Protective supervision’ appears to be similar to care given 

small children, that is, anticipating everyday hazards and 

intervening to avert harm”].) Such supervision is available for 

“nonself-directing, confused, mentally impaired, or mentally ill 

persons only.” (MPP, § 30.757.171; see Marshall v. McMahon, 

at p. 1847; Calderon v. Anderson, supra, 45 Cal.App.4th at 

p. 616.) There is no dispute that Reilly’s adult daughter was 

entitled to IHSS services, or that Reilly was authorized to 

receive IHSS compensation for providing those services to her.

C. HUD regulation on “Annual Income” and its 

exclusions 

The applicable federal regulation defines “annual income” 

broadly, as “all amounts, monetary or not.” (24 C.F.R. § 5.609(a)

(2020).) For example, income includes “compensation for 

personal services” (id., § 5.609(b)(1) (2020)) and “[p]ayments in 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

8

lieu of earnings, such as unemployment and disability 

compensation, worker’s compensation, and severance pay” (id., 

§ 5.609(b)(5) (2020)). However, income does not include such 

amounts as “specifically excluded” under the regulation. (Id., 

§ 5.609(a)(3) (2020).) There are 16 such exclusions. (Id.,

§ 5.609(c)(1)–(17) (2020).) 

“An extensive set of statutory provisions and regulations 

governs the calculations of the subsidy that must be paid on 

behalf of each tenant.” (Nozzi v. Housing Authority of City of 

Los Angeles (9th Cir. 2015) 806 F.3d 1178, 1184.) In general, 

Section 8 tenants must contribute 30% of their monthly adjusted 

income or 10% of their gross monthly income, whichever is 

greater, towards each month’s rent. (42 U.S.C. § 1437f(o)(2)(A).) 

The housing assistance payment covers the balance of the rent, 

up to a statutorily capped amount. (Nozzi v. Housing Authority 

of City of Los Angeles, at pp. 1184–1185.) 

We do not examine the underlying method used to 

calculate the rental subsidy, however, but focus on whether 

Reilly’s IHSS compensation for care of her disabled daughter is

“specifically excluded” (24 C.F.R. § 5.609(a)(3) (2020)) from 

income as “[a]mounts paid by a State agency to a family with a 

member who has a developmental disability and is living at 

home to offset the cost of services and equipment needed to keep 

the developmentally disabled family member at home” (id., 

§ 5.609(c)(16) (2020), italics added). The parties do not dispute 

that if Reilly’s daughter received IHSS care from a third party

rather than a family member, such amounts paid would qualify 

under the exclusion. MHA argues that for the exclusion to 

apply, however, a family must incur costs for hiring someone

because only then would the “[a]mounts paid” by the state to a 

family truly “offset” those “cost[s].” (24 C.F.R. § 5.609(c)(16) 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

9

(2020); see In re Ali (Minn. 2020) 938 N.W.2d 835, 840 (Ali) 

[“Cost means an actual monetary expense . . . incurred by the 

family to keep the disabled family member living at home”].) 

Because the state pays Reilly to provide care for her own 

daughter and not to hire a third party provider, MHA maintains

there is no actual “cost” to Reilly for such services, and

consequently, there is nothing to “offset.”

1. Meaning of “Offset” & “Cost”

MHA’s interpretation is based in part on the dictionary 

definition of “offset,” which generally means to counterbalance 

or compensate for something. (See Steinmeyer v. Warner Cons. 

Corp. (1974) 42 Cal.App.3d 515, 518.) Echoing the Court of 

Appeal, MHA asserts that payments by the state must offset 

costs the family itself incurs to keep a developmentally disabled 

member at home; “[o]therwise the payment does not 

counterbalance or compensate for the costs of services.” As 

MHA puts it, “the payment must go to the same entity that 

incurs the cost of those services.” MHA further insists that 

“cost” is a monetary term that does not encompass emotional

costs Reilly bears in caring for her daughter, nor any lost 

opportunity costs when Reilly forgoes outside employment to be 

her daughter’s IHSS provider. 

We disagree with MHA’s interpretation. Unlike the word 

“reimburse,” which means to “pay back or compensate (another 

party) for money spent or losses incurred” (American Heritage 

Dict. (5th ed. 2020) p. 1214, italics added), “offset” is not 

similarly restrictive. (See Briggs v. Eden Council for Hope & 

Opportunity (1999) 19 Cal.4th 1106, 1117 [“Where different 

words or phrases are used in the same connection in different 

parts of a statute, it is presumed the Legislature intended a 
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Opinion of the Court by Chin, J.

10

different meaning”].) For example, the term “reimbursement” 

is used in two other exclusions. (24 C.F.R. § 5.609(c)(4), (8)(iii)

(2020).) Consistent with the meaning of “reimburse,” those 

exclusions refer to compensation of specific, discrete amounts, 

e.g., “the cost of medical expenses” (id., § 5.609(c)(4) (2020)) and 

“out-of-pocket expenses” to participate in a publicly assisted 

program (id., § 5.609(c)(8)(iii)). 

While the term “reimburse” suggests there may be full 

recompense for any out-of-pocket expenses a family incurs 

under those exclusions, “offset” as used here does not necessarily 

reflect that same meaning. (See Briggs v. Eden Council for Hope 

& Opportunity, supra, 19 Cal.4th at p. 1117.) Here, what is

“offset” is the “cost of services and equipment needed to keep the 

developmentally disabled family member at home.” (24 C.F.R. 

§ 5.609(c)(16) (2020).) “[C]ost,” in turn, is defined to include both 

“an amount paid or required in payment for a purchase; a price” 

and “the expenditure of something, such as time or labor, 

necessary for the attainment of a goal.” (American Heritage 

Dict., supra, at p. 454.) Whether a family uses homecare 

payments to support itself so that it may care for a 

developmentally disabled member at home, or instead uses the 

funds to pay a third party to provide care for some of the time, 

these payments do no more than “offset” the “cost” of services 

and equipment needed to avoid institutionalization, costs that 

are not otherwise specified or limited. (24 C.F.R. § 5.609(c)(16) 

(2020).) 

Further, contrary to MHA’s suggestion, “cost” in this 

exclusion (24 C.F.R. § 5.609(c)(16) (2020)) does not have the 

same meaning as “cost” used in other provisions of the 

regulation. For instance, “actual cost of shelter and utilities” (24 

C.F.R. § 5.609(b)(6)(ii) (2020)) and “cost of medical expenses for 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

11

any family member” (id., § 5.609(c)(4) (2020)) both refer to 

discrete, monetary amounts. “[T]he presumption that ‘identical 

words used in different parts of the same act are intended to 

have the same meaning . . . readily yields whenever there is such 

variation in the connection in which the words are used as 

reasonably to warrant the conclusion that they were employed 

in different parts of the act with different intent.’ ” (Roberts v. 

Sea-Land Services, Inc. (2012) 566 U.S. 93, 108.)

2. Rulemaking history of 24 Code of Federal 

Regulations par 5.609(c)(16) (2020)

This interpretation of the terms “offset” and “cost” is also 

consistent with the rulemaking history of 24 Code of Federal 

Regulations part 5.609(c)(16) (2020). (See 60 Fed.Reg. 17388–

17395 (Apr. 5, 1995) [“Combined Income and Rent”; interim rule 

as precursor to 24 C.F.R. § 5.609(c)(16) (2020)]; 61 Fed.Reg. 

54492–54504 (Oct. 18, 1996) [final rule]). Though the Court of 

Appeal found this history to be unhelpful and not illuminating, 

we do not share that view. (See Thomas Jefferson Univ. v. 

Shalala (1994) 512 U.S. 504, 512 [relevance of agency’s “ ‘intent 

at the time of the regulation’s promulgation’ ”].) 

In 1995, HUD published an interim rule proposing eight 

new income exclusions — among them the homecare payments

exclusion — to the definition of annual income under Section 8 

and other assisted housing programs. (See 60 Fed.Reg. 17388–

17395 (Apr. 5, 1995); 24 C.F.R. § 5.609(c) (2020).) It determined 

that the new exclusions “are essential for achieving its goals of 

ensuring economic opportunity, empowering the poor and 

expanding affordable housing opportunities. Moreover, HUD 

believes that the costs of additional exclusions will be offset by 

long-term future savings because the exclusions will increase 
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Opinion of the Court by Chin, J.

12

the number of economically self-sufficient families residing in 

assisted housing.” (60 Fed.Reg. 17388, italics added.)

Regarding the “homecare payments” exclusion in 

particular, HUD explained that the “exclusion exempts amounts 

paid by a State agency to families that have developmentally 

disabled children or adult family members living at home. 

States that provide families with homecare payments do so to 

offset the cost of services and equipment needed to keep a 

developmentally disabled family member at home, rather than 

placing the family member in an institution. Since families that 

strive to avoid institutionalization should be encouraged, and 

not punished, the Department is adding this additional 

exclusion to income. The Department wishes to point out that 

today’s interim rule does not define ‘developmentally disabled’ 

since whether a family member qualifies as developmentally 

disabled, and is therefore eligible for homecare assistance, is 

determined by each individual State.” (60 Fed.Reg. 17388, 

17389 (Apr. 5, 1995), italics added.) 

In finalizing the rule and responding to public comment 

that “ ‘developmentally disabled children’ ” and “ ‘adult family 

members’ ” should be expressly defined, HUD rejected the

suggestion as unnecessary: “There is no need for HUD to define 

these terms, as they are defined by the State program providing 

the payments. If the family is receiving such a payment from the 

State because a family meets the criteria of the definition, the 

[public housing authority] should consider the family eligible for 

the exclusion.” (61 Fed.Reg. 54492, 54497 (Oct. 18, 1996), italics 

added.) 

We find several points from this rulemaking history to be 

significant. As to the meaning of “offset,” HUD recognized that 
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Opinion of the Court by Chin, J.

13

states that make payments for in-home services “do so to offset 

the cost” to the family keeping the developmentally disabled 

member at home “rather than placing the family member in an 

institution.” (60 Fed.Reg. 17388, 17389 (Apr. 5, 1995).) 

Significantly, HUD here did not use “cost” and “offset” in terms 

of a specific monetary expense or amount a Section 8 family 

incurs, but in a broad sense with respect to describing the 

overall objective of the exclusion. HUD regarded homecare 

payments as reducing or offsetting costs to families caring for 

developmentally disabled individuals, costs that would be borne 

by state and federal governments if the family member were 

institutionalized. (See Perkins & Boyle, Addressing Long Waits 

for Home and Community-Based Care Through Medicaid and 

the ADA (2001) 45 St. Louis U. L.J. 117, 119 [“Most states have 

reduced costly institutional care by shifting some public funding 

to home and community settings”].) 

This background clearly informs the interpretation of 24 

Code of Federal Regulations part 5.609(c)(16) (2020). The 

language of the regulation (“amounts paid by a State agency . . . 

to offset the costs of services and equipment needed to keep the 

developmentally disabled family member at home” [italics 

added]) closely tracks this rulemaking language (“States that 

provide families with homecare payments do so to offset the costs 

of services and equipment needed to keep a developmentally 

disabled family member at home, rather than placing the family 

member in an institution”) (60 Fed.Reg. 17388, 17389, italics 

added), and the italicized phrases at issue here are identical. 

The only express limitation HUD has placed on this

exclusion is that the in-home care payments must be for services 

and equipment needed to keep the “developmentally disabled” 

family member at home. (See post, at pp. 15–16.) Even then, 
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Opinion of the Court by Chin, J.

14

HUD found “no need” to define what “developmentally disabled” 

meant, and instead left this up to the states to decide. (61 

Fed.Reg. 54492, 54497 (Oct. 18, 1996; see 60 Fed.Reg. 17389 

(Apr. 5, 1995) [“whether a family member qualifies as 

developmentally disabled, and is therefore eligible for homecare 

assistance, is determined by each individual State”].) From 

HUD’s perspective, “If the family is receiving such a payment 

from the State because a family member meets the criteria of 

the definition, the [public housing authority] should consider the 

family eligible for the exclusion.” (61 Fed.Reg. 54492, 54497,

italics added.)

Notwithstanding the general rule that exclusions from

income should be construed narrowly (see Commissioner v. 

Schleier (1995) 515 U.S. 323, 328), we find no indication that 

HUD intended a narrow construction of the homecare payments

exclusion. We perceive no reasoned basis — including any basis 

informed by the regulation’s language — why HUD would single 

out a parent provider’s compensation as unworthy for income 

exclusion. Rather, we find HUD’s stated goals of encouraging

families to avoid the institutionalization of developmentally 

disabled individuals through the addition of this exclusion (60 

Fed.Reg. 17388, 17389 (April 5, 1995)), and more globally of

“ensuring economic opportunity, empowering the poor and 

expanding affordable housing opportunities” (60 Fed.Reg. 

17388), would be furthered by permitting all homecare 

payments for services to keep developmentally disabled family 

members at home — whether the provider is a family member 

or third party — to be excluded from the meaning of “annual 

income.” (24 C.F.R. § 5.609(c)(16) (2020).) By allowing these 

families to realize the full benefit of the homecare payments

without facing a corresponding increase in rent, the exclusion 
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Opinion of the Court by Chin, J.

15

would operate as intended by not penalizing families who take 

on the onus of caring for a developmentally disabled family 

member at home.

To that end, it is helpful to remember that “[t]he United 

States Housing Act is a program of ‘cooperative federalism.’ ” 

(James v. New York City Housing Authority (S.D.N.Y. 1985) 622

F.Supp. 1356, 1359; see 42 U.S.C. § 1437; see also Hodel v. 

Virginia Surface Mining & Recl. Assn. (1981) 452 U.S. 264, 

289.) “HUD’s delegation of eligibility requirements to local 

public housing authorities is intended to effectuate the 

underlying policy of the United States Housing Act by 

promoting efficient management of the programs . . . .” (James 

v. New York City Housing Authority, at pp. 1361–1362.) With 

respect to the exclusion for homecare payments specifically (24 

C.F.R. § 5.609(c)(16)) (2020)), HUD expressly left it to the states 

to define “developmentally disabled,” which in part determines

a family’s eligibility for the income exclusion. (See ante, at p. 

12.)

Along these lines, HUD did not limit the income exclusion 

based on whether a state allows a family to use a family member

or a third party to provide the necessary care; the exclusion 

covers “[a]mounts paid by a State agency to a family” with a 

developmentally disabled member (24 C.F.R. § 5.609(c)(16)

(2020)). Indeed, acknowledging such a distinction would do 

little to advance the complementary purposes of the federal and 

state statutes. Congress established Section 8 with “the 

purpose of aiding low-income families in obtaining a decent 

place to live.” (42 U.S.C § 1437f(a).) And our Legislature 

created IHSS with the goal of providing “supportive services . . .

to aged, blind, or disabled persons . . . who are unable to perform 

the services themselves and who cannot safely remain in their 
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Opinion of the Court by Chin, J.

16

homes or abodes of their own choosing unless these services are 

provided.” (§ 12300, subd. (a).) Like the purpose of the federal 

exclusion (see ante, at pp. 12–13), the IHSS program’s purpose 

is to enable “ ‘disabled poor persons to avoid institutionalization 

by remaining in their homes with proper supportive services.’ ” 

(Basden v. Wagner, supra, 181 Cal.App.4th at p. 939.) 

Nevertheless, MHA would have us read in the words “from third 

parties” after the phrase “cost of services” (24 C.F.R. § 

5.609(c)(16) (2020)) thereby making it correspondingly harder 

for certain families to provide necessary in-home care. Given 

this cooperative federalism regime, we ought to be reticent to 

interpret the HUD regulation in a way that would foreclose or 

hinder the objectives of the state IHSS program. 

The dissent overstates the import of the authority it cites

(see dis. opn., post, at pp. 1–2, 16–19). (See Anthony v. Poteet 

Housing Authority (5th Cir. 2009) 306 Fed. Appx. 98, 101

(Anthony) [“One must incur costs before they can be offset”]; Ali,

supra, 931 N.W.2d 835.) In Anthony, an unpublished Fifth 

Circuit decision that first addressed the issue, plaintiff Brenda 

Anthony provided in-home care for her severely disabled son in 

their Section 8 subsidized apartment. Unlike California, the 

State of Texas does not pay families directly for in-home care; 

such care is provided by third party intermediaries, who in turn 

employ in-home attendants and pay them wages partially 

funded by the state. Through her employment as a personal 

care attendant with two private for-profit companies, Anthony 

provided care not only for her son but also for other clients under 

the terms of her employment.

In determining Anthony’s annual income for purposes of 

calculating her subsidized rent, the PHA refused to exclude 

Anthony’s wages under 24 Code of Federal Regulations part 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

17

5.609(c)(16) (2020)). The Fifth Circuit agreed with the PHA’s 

decision: “[T]he fact that Anthony’s employment income 

coincides with state funds that are set aside for her son’s care 

does not make that income a form of reimbursement.” (Anthony, 

supra, 306 Fed. Appx. at pp. 101–102.) The court further 

rejected Anthony’s claim that the services she provided her son 

were at a cost and were not free: “[F]or Anthony, they are free. 

She has no out-of-pocket expenses — ‘costs’ — that must be 

reimbursed or ‘offset’ by the state.” (Id. at p. 102.) 

We are not persuaded by Anthony’s reasoning on several 

grounds. Fundamentally, Texas’s program is distinct from the 

IHSS scheme in that “all state-funded in-home attendant-care 

services in Texas are provided by private intermediaries, and 

Texas does not provide any amounts directly to families to offset 

costs incurred to keep a disabled family member at home.” 

(Anthony, supra, 306 Fed. Appx. at p. 101.) Next, although 

Anthony’s private employers paid her to provide in-home care to 

her son “with money partially provided by the state” (id. at p. 

101), it is unclear what portion of her wages truly constituted 

“pass-through” state funds. Her employers paid Anthony not 

just to care for her disabled son, but also to care for other clients. 

(Id. at p. 100.) Thus, Anthony’s compensation as an in-home 

attendant was arguably indistinguishable from wages a parent 

earns from outside employment, and therefore properly not 

excluded from income under 24 Code of Federal Regulations 

part 5.609(c)(16) (2020)). Finally, we do not agree with the Fifth 

Circuit’s narrow interpretation of the exclusion as limited to outof-pocket expenses that a state directly reimburses. (See 

Anthony, supra, 306 Fed. Appx. at pp. 101–102; see ante, at pp. 

9–11.)
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

18

Nor are we persuaded by the Minnesota Supreme Court’s 

recent decision in Ali, supra, 938 N.W.2d 835, which relied in 

part on both Anthony and the Court of Appeal opinion below to 

reach a similar conclusion. (See Reilly v. Marin Housing 

Authority, supra, 23 Cal.App.5th 425.) Under Minnesota’s

Consumer Directed Community Support option for home and 

community-based services, a family receives a budget for 

specific services and equipment needed to keep a 

developmentally disabled member at home. (Ali, supra, 938 

N.W.2d at p. 837.) The plaintiff, whose autistic son was eligible 

for the program, “chose to allocate a portion of the budget to 

herself as a paid parent to provide to her son some of the 

necessary services.” (Ibid.) Following Anthony and Reilly, the 

Ali court adopted a narrow view of “cost” to mean out-of-pocket 

expenses, and concluded that the mother incurred no actual 

monetary expenses to “offset.” (Id. at p. 840.) 

As with the Texas program, the Minnesota program —

which allowed the mother to “allocate her budget as she saw fit 

to keep her son living at home” — is structured differently from 

the IHSS program in a way that makes Ali distinguishable. 

(Ali, supra, 938 N.W.2d at p. 837.) Moreover, as with Anthony, 

we disagree with the Ali court’s narrow interpretation of “cost” 

and “offset.”

D. MHA’s policy arguments

Notwithstanding this reading of the HUD regulation, 

MHA asserts that including a parent’s IHSS compensation as 

income is necessary to achieve a measure of parity between

families in similar circumstances. An expansive reading of the 

exclusion (24 C.F.R. § 5.609(c)(16) (2020)), MHA argues, would 

unfairly advantage families who provide in-home care to a
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

19

developmentally disabled member because their compensation 

is not counted as income for purposes of calculating their rent 

subsidy, whereas no comparable income exclusion is available 

for a family with a medically disabled member or for a family 

who hires a third party provider. 

In advancing this argument, MHA asserts the state pays 

Reilly “wages” under the IHSS program. Describing an 

employment relationship between Reilly and the State of 

California, MHA relies in part on the Court of Appeal’s 

reasoning that “IHSS payments substitute in the family’s 

budget for the money the parent would have earned outside the 

home.” Such wages, MHA continues, should be considered part 

of her annual income just like the outside income of a parent 

who instead hires an in-home provider. We address these points 

in turn. 

1. Disparity based on individuals’ different

disabilities

First, we reject MHA’s and the dissent’s assertion that 

excluding Reilly’s IHSS payments from annual income under 24 

Code of Federal Regulations part 5.609(c)(16) (2020) would 

create an unfair disparity by extending the exclusion to families 

with a developmentally disabled member but not to families

with a medically disabled member. To the extent there is any

disparity, it is inherent in the federal regulation itself, which 

specifically limits the exclusion to payments made to families 

caring for a “developmentally disabled family member.” (24 

C.F.R. § 5.609(c)(16) (2020).) Put another way, even assuming 

MHA’s position is correct that the exclusion is limited to 

payments made to third party providers, it would still treat 

developmental disabilities more favorably than physical 

disabilities because whatever its scope, the exclusion by its 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

20

terms applies only to “[a]mounts paid by a State agency to a 

family with a member who has a developmental disability.” 

(Ibid., italics added.) 

The regulation, moreover, does not require that an 

individual meet a particular definition of “developmentally 

disabled” for the income exclusion to apply. As previously 

discussed (see ante, at p. 15), HUD has not defined 

“developmental disability” in the regulation, but instead left it 

up to states to determine its meaning. Specifically, if a state 

program authorizes a family to receive in-home care for a family 

member, in HUD’s view that family member “meets the criteria 

of the definition” of developmentally disabled, and the PHA 

“should consider the family eligible for the exclusion.” (61

Fed.Reg. 54492, 54497 (Oct. 18, 1996), italics added.) This 

expansive view in favor of applying the exclusion is consistent 

with HUD’s expressed concern that families of developmentally 

disabled members in particular would receive unfair treatment 

if this income exclusion were not made available to them. HUD 

added the relevant exclusion for families with a developmentally 

disabled member “[s]ince families that strive to avoid 

institutionalization should be encouraged, and not punished.” 

(60 Fed.Reg. 17388, 17389 (Apr. 5, 1995), italics added.) 

The dissent, however, asserts that precluding Reilly from 

utilizing this income exclusion would not amount to punishment

because no other group, besides foster parents, enjoys the 

benefit of the income exclusion. (See dis. opn., post, at p. 34, fn. 

18.) This critically misapprehends the nature of the penalty 

involved. The punishment here is not merely withholding a 

benefit to a family that is not otherwise given to similarly 

situated families; in other words, the dilemma a family faces is 

not choosing between enjoying or forgoing a “preferential 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

21

benefit,” as the dissent seems to suggest. (Dis. opn., post, at

p. 23.) Rather, if a family cannot utilize the income exclusion to 

exclude compensation for a parent’s in-home care, this may 

cause the family to lose its Section 8 housing altogether because 

it is unable to pay an increased portion of rent. Without such

housing, a family may face having to institutionalize a 

developmentally disabled member, a result the exclusion seeks 

to prevent in the first place.

Further, despite no expressed preference for family 

providers per se, “[r]ecipients needing 24-hour protective 

supervision — and other services — are more likely to receive 

better continuous care from relatives living with them whose 

care is more than contractual.” (Miller v. Woods, supra, 148 

Cal.App.3d at p. 870.) This continuity of care is particularly 

salient here because of the nature of need-based tasks under the 

IHSS program. Because an IHSS recipient may only receive 

specific services based on an assessed need — i.e., where 

“[p]erformance of the service by the recipient would constitute 

such a threat to his/her health/safety that he/she would be 

unable to remain in his/her own home” (MPP, § 30.761.14) —

not all time that a provider spends with a recipient would be 

compensable. (See § 12300, subd. (a); MPP, § 30.761.12.) Many 

tasks are discrete and not clustered together throughout the day 

(such as feeding, dressing, bowel and bladder care), and a 

provider may not be compensated for time spent waiting in 

between those tasks. It would no doubt prove challenging to find 

many providers — other than family members — willing to work 

that intermittently during the day.

Family members may also make particularly good 

providers because IHSS services “involve a most intimate and 

personal aspect of an individual’s life” and family providers 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

22

often “insure the least intrusion upon the recipient’s privacy.” 

(Miller v. Woods, supra, 148 Cal.App.3d at p. 878; see § 12304.1

[“preference shall be given to any qualified individual provider 

who is chosen by any recipient”].) Also recognizing that familyprovided care is often the best type of care for individuals with 

disabilities, Congress has included it as one of the “goals of the 

Nation” to provide families of children with disabilities the 

services necessary to “enable families of children with 

disabilities to nurture and enjoy their children at home”; and 

“support family caregivers of adults with disabilities.” (42 

U.S.C. § 15091(a)(6)(B), (D) [congressional findings of Families 

of Children with Disabilities Support Act of 2000]; id.,

§ 15091(a)(1) [“It is in the best interest of our Nation to preserve, 

strengthen, and maintain the family”].) Congress further 

emphasized the important cost savings when family members 

are themselves providers for their disabled children: “Families 

of children with disabilities provide support, care, and training 

to their children that can save States millions of dollars. 

Without the efforts of family caregivers, many persons with 

disabilities would receive care through State-supported out-ofhome placements.” (Id., § 15091(a)(2); see 60 Fed.Reg. 17388, 

17389 (Apr. 5, 1995).) These expressed goals fully align with 

HUD’s objective to have developmentally disabled individuals 

avoid institutionalization and instead live with their families at 

home.

3

 

3 Contrary to the dissent’s suggestion, nothing in our 

opinion should be construed as implying that third party 

caregivers as a whole will provide “substandard” care compared 

to family members. (Dis. opn., post, at p. 31.) We merely 

confirm what Congress has expressly recognized about the 

benefits of having family caregivers.
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

23

This leads us to the inescapable conclusion that parents 

who keep their disabled child at home instead of in an 

institution — while also providing care as their child’s IHSS 

provider — are different from other caregivers. That difference, 

however, cuts in favor of allowing a parent’s IHSS compensation 

under the exclusion. Unlike third party caregivers whose job it 

is to take care of someone on an hourly basis, for these parent 

providers, caring for their child “is not a day job; it is their life.” 

(In re Hite (Bankr. W.D.Va. 2016) 557 B.R. 451, 458 [holding 

parents’ in-home care payments excluded from monthly income 

and consequently not deemed disposable income subject to 

creditors].) If in-home care payments are not excluded from her 

income, the benefits Reilly receives — the in-home care for her 

disabled daughter K.R. and the Section 8 housing assistance —

would be at cross-purposes. A family should not be forced to 

make an impossible choice between these two critical benefits. 

We perceive no plausible reason why Reilly should not realize 

the full benefit of what each program has to offer her family.4 

2. IHSS payments as wages

Next, we reject MHA’s underlying assumption that a 

parent provider’s compensation under the IHSS program seeks 

to replicate the wages and hours of a parent who is employed 

outside the home. A parent’s employment is relevant only to the 

extent it relates to the parent’s suitability or availability to 

provide IHSS services to a child. (MPP, § 30-763.451; Dept. AllCounty Letter No. 19-02 (January 9, 2019) (All-County Letter 

 

4 This conclusion focuses on Reilly’s general entitlement to 

benefits under the Section 8 voucher and IHSS programs, and 

does not consider any other basis for terminating these benefits 

such as the failure to comply with any program requirements. 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

24

19-02).) As section 12300, subdivision (e) explains, the predicate 

for a paid parent provider is that “no other suitable provider is 

available.” (§ 12300, subd. (e); see MPP, § 30-763.451.) In 

providing the necessary in-home care to a disabled child, a 

parent forgoes any outside employment — not to displace 

otherwise competent professional caregivers — but to prevent a 

third party caregiver’s “inappropriate placement or inadequate 

care” for their child. (§ 12300, subd. (e).) 

For instance, in its 2019 All-County Letter 19-02, the 

Department clarified the paid parent provider requirements: 

“The paid parent IHSS provider requirements, set forth in MPP 

Section 30-763.451, do not require or imply that a parent must 

have marketable job skills or a work history to be their child’s 

paid IHSS provider, as long as it is the recipient child’s needs 

which prevent the parent from maintaining or obtaining fulltime employment.” (All-County Letter 19-02, supra, at p. 4, 

italics added.) Likewise, parents who retire or are laid off may 

also serve as their child’s provider only if their retirement or 

layoff is due to the child’s need for IHSS services. (Id. at p. 6.) 

In short, “if a parent is not employed full-time for a reason other 

than the recipient child’s IHSS needs . . . that parent would not 

qualify as a paid parent IHSS provider.” (Id. at p. 4.) 

Second, even assuming Reilly’s IHSS compensation 

represents her wages, this does not mean that providing inhome care to her child is “an employment for all purposes.” 

(Basden v. Wagner, supra, 181 Cal.App.4th at p. 940.) In Basden 

v. Wagner, the Court of Appeal recognized certain duties — such 

as the state being responsible for the provider’s unemployment 

compensation, workers’ compensation, federal and state income 

tax and the like — that would suggest providing IHSS full-time 

could be considered an employment. The court, however, 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

25

pointed out that “the Legislature defined IHSS providers as 

employees for limited circumstances, but undisputedly not for 

all circumstances. More significantly, nothing in the statutes 

even remotely suggests the Legislature defined the provision of 

in-home, full-time, IHSS funded care by a parent to a child as 

full-time employment . . . .” (Ibid., italics omitted.) The question

here is whether a parent’s compensation for providing in-home 

care is “specifically excluded” from the definition of annual 

income for purposes of the HUD regulation. (24 C.F.R. 

§ 5.609(a)(3), (c)(16) (2020).) As explained above, we conclude 

that IHSS compensation to a parent provider is excluded from

income. (See ante, at pp. 14–15.) 

Nevertheless, the dissent maintains that “[u]nlike funds 

that reimburse a family’s expenditures, funds provided by the 

state to compensate for the family’s caregiving activities are 

available to meet the family’s daily needs. That is their 

purpose.” (Dis. opn., post, at p. 25, italics added.) This 

characterization gravely misconstrues the nature and scope of 

IHSS services. 

Under the IHSS program, the main focus is on assessing 

the disabled individual’s “service needs and authorizing service 

hours to meet those needs.” (§ 12301.2, subd. (a)(1).) A

caregiver will be compensated only for those authorized service 

hours and nothing more. As previously explained (see ante, at 

p. 21), because many tasks are discrete and completed

throughout the day, a provider might not be compensated for 

time spent waiting in between those tasks. Contrary to the 

dissent’s suggestion, excluding a parent’s IHSS compensation 

from income would not artificially reduce a family’s income and 

thereby increase any resulting rent subsidy. At best, a parent’s

IHSS compensation will offset a portion of the costs of keeping 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

26

a developmentally disabled family member at home, and would 

not go far in meeting the family’s daily needs.

The dissent’s related assertion — i.e., family providers 

“are effectively selling their labor to the state, and the resulting 

income is indistinguishable, in its impact on the family’s 

standard of living, from money earned working outside the 

home” (dis. opn., post, at p. 25) — is likewise long on conclusion 

but short on facts. (See ibid. [“to receive funds from IHSS a 

parent must accept their disabled child’s care as, in effect, their 

job”].) In the case of Reilly’s daughter, K.R., for example, she 

required protective supervision that is “only available” if “a need 

exists for twenty-four-hours-a-day of supervision in order for the 

recipient to remain at home safely.” (MPP, § 30-757.173(a).) A 

person needing 24-hour supervision would require a provider’s 

services for 720 hours in a 30-day month. However, an IHSS 

provider is limited to a statutory cap of 283 hours of 

compensation. (§§ 12303.4, 14132.95, subd. (g).) The 

discrepancy between a parent provider’s actual hours of service 

and compensation belies any assertion that IHSS payments, at 

least with respect to protective supervision, are intended to 

represent wages the parent would have earned outside the 

home, where compensation would be based on every hour 

worked. 

Finally, we find it significant that the IRS also treats inhome care payments — whether the provider is related or 

unrelated to the disabled individual — as excludable from a 

provider’s income under Internal Revenue Code section 131. (26 

U.S.C. § 131; see Rev. Proc. 2014-7, 2014-4 I.R.B. 445.) In 2014, 

the IRS explained that Medicaid waiver payments to states, 

which are used to fund IHSS payments through the state MediCal program (see ante, at pp. 5–6 & fn. 2), should be excluded
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

27

from a provider’s gross income. (Rev. Proc. 2014-7, 2014-4 I.R.B. 

445.) It equated these payments to foster care payments, which 

are considered “difficulty of care” payments excludable from a 

provider’s income under Internal Revenue Code section 131. 

(26 U.S.C. § 131(a) [“Gross income shall not include amounts 

received by a foster care provider . . . as qualified foster care 

payments”].) “The programs share the objective of enabling 

individuals who otherwise would be institutionalized to live in a 

family home setting rather than in an institution, and both 

difficulty of care payments and Medicaid waiver payments 

compensate for the additional care required.” (Rev. Proc. 2014-

7, 2014-4 I.R.B. 445 [these foster parents “ ‘are saving the 

taxpayers’ money by preventing institutionalization of these 

children’ ”].) As relevant here, the IRS makes no distinction 

between care provided by a parent or by a third party — the 

exclusion for Medicaid waiver payments “will apply whether the 

care provider is related or unrelated to the eligible individual.” 

(Ibid., italics added.) 

Seeking to downplay any impact an IRS interpretation has 

on a HUD regulation, MHA notes that HUD has indicated that 

the “tax rules are different from the HUD program rules.”

(HUD, HUD Handbook 4350.3: Occupancy Requirements of 

Subsidized Multifamily Housing Programs (Nov. 2013) ¶ 5-1.) 

Be that as it may, we do not conclude that the IRS’s 

interpretation is dispositive or compels the outcome in this case. 

We do, however, acknowledge that it provides persuasive 

insight, one that is consistent with the rulemaking record of the 

HUD regulation (24 C.F.R. § 5.609(c)(16) (2020)). (See ante, at 

pp. 11–13)

For example, though payments to foster parents and inhome care payments are both considered “difficulty of care” 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

28

payments excludable from a provider’s taxable income, these 

payments would receive unequal treatment under MHA’s 

interpretation of the regulation. Under 24 Code of Federal 

Regulations part 5.609(c)(2) (2020), “[p]ayments received for the 

care of foster children or foster adults (usually persons with 

disabilities, unrelated to the tenant family, who are unable to 

live alone)” are excluded from income for purposes of Section 8 

housing. If a family takes into their home an unrelated disabled 

adult who is unable to live alone, and receives payment from the 

State for providing care to that adult, such payments are 

excluded from the family’s income. However, if that same family 

receives payment for providing the same care but to a 

developmentally disabled family member, those payments 

would not be excluded from income. To ascribe this 

interpretation to HUD, which would impose a financial penalty 

on a family simply because the care is given to a disabled family 

member rather than a disabled stranger, would not only be 

inconsistent with the IRS’s treatment of both payments, there is 

no evidence in the regulation’s rulemaking record that HUD 

intended different treatment.

E. HUD’s position

At our request, HUD filed an amicus brief in this matter.

We first note that at oral argument HUD’s counsel indicated 

that the agency did not request we give deference to its 

interpretation of the regulation because it believed the plain 

language controlled. (See Kisor v. Wilkie (2019) 588 U.S. ___

[139 S. Ct. 2400, 2415] [“If uncertainty does not exist, there is 

no plausible reason for deference. The regulation then just 

means what it means — and the court must give it effect”].) 

Urging us to affirm the Court of Appeal’s judgment, HUD opines 

that the IHSS payments Reilly receives must be treated as 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

29

income under the regulation because that “compensation 

substitutes for income Reilly would otherwise earn for working 

outside the home.” HUD essentially echoes the reasoning of the 

Court of Appeal below.

Though deference is generally accorded an agency’s 

interpretation of its own regulation in the face of ambiguity (see

Auer v. Robbins (1997) 519 U.S. 452; Skidmore v. Swift & Co. 

(1944) 323 U.S. 134, 140), we conclude that such deference is not 

compelled here. (See United States v. Mead Corp. (2001) 533 

U.S. 218, 228 [“[t]he fair measure of deference to an agency 

administering its own statute has been understood to vary with 

circumstances”].) Courts should defer to an agency’s 

interpretation unless an “ ‘alternative reading is compelled by 

the regulation’s plain language or by other indications of the 

[agency’s] intent at the time of the regulation’s promulgation.’ ” 

(Thomas Jefferson Univ. v. Shalala, supra, 512 U.S. at p. 512, 

italics added.) 

As explained above (see ante, at pp. 12–13), we conclude 

that HUD’s clearly expressed intent at the time it added the 

exclusion for homecare payments (24 C.F.R. § 5.609(c)(16)

(2020)) was to encourage families to provide in-home care to, and 

avoid institutionalization of, developmentally disabled family 

members. This contemporaneous intent is fully realized only 

when in-home payments for services needed to keep the 

developmentally disabled member at home — are excluded from

income for purposes of the Section 8 program, i.e., whether those 

payments are ultimately made to a family member or to a third 

party provider. This interpretation is consistent with

exclusion’s language, which places no restrictions on who the 

provider of services can be. (24 C.F.R. § 5.609(c)(16) (2020).) 
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

30

Contrary to MHA’s suggestion, we do not perceive any 

intent by HUD to treat families with a developmentally disabled 

member and families with a medically disabled member the 

same, or to consider a parent’s outside income the same as a 

parent’s IHSS compensation. We will not pursue parity for 

parity’s sake, especially if such pursuit runs counter to the 

language and purpose of the exclusion. Including a parent’s inhome care payments as income to determine a family’s Section 

8 eligibility will have the perverse effect of making it harder for 

a family to maintain a home in which to care for the child. 

In the end, we refuse to adopt a crabbed interpretation 

that does little to advance the tandem goals of offering 

affordable housing to low income families and of supporting 

families who themselves provide in-home care for

developmentally disabled members. We cannot endorse a

construction that yields a result antithetical to our nation’s “goal 

of providing families of children with disabilities with the 

support they need to raise their children at home.” (42 U.S.C. 

§ 15091(c).) We conclude a parent’s IHSS compensation to 

provide care to keep a developmentally disabled child at home 

is excluded from income under 24 Code of Federal Regulations

part 5.609(c)(16) (2020).
REILLY v. MARIN HOUSING AUTHORITY

Opinion of the Court by Chin, J.

31

CONCLUSION

We reverse the Court of Appeal’s judgment and 

remand the matter for further proceedings consistent with this 

opinion. 

CHIN, J.

We Concur:

LIU, J.

CUÉLLAR, J. 

GROBAN, J. 
1

REILLY v. MARIN HOUSING AUTHORITY

S249593

Dissenting Opinion by Chief Justice Cantil-Sakauye 

The federal Housing Choice Voucher program, 42 

U.S.C. section 1437f (hereafter Section 8), provides housing 

assistance to low-income families, with the amount of the 

assistance determined by the family’s annual income. Under 

24 Code of Federal Regulations part 5.609(c) (2020),1certain 

funds are excluded from the calculation of annual income. 

Among the funds excluded from that calculation are state 

payments to a family providing at-home care to a 

developmentally disabled family member if those payments 

“offset the cost of services and equipment needed to keep the 

developmentally disabled family member at home.” 

(§ 5.609(c)(16).) The majority adopts an expansive 

interpretation of part 5.609(c)(16), holding that, in addition 

to excluding the state’s reimbursement of out-of-pocket 

expenses, the regulation also covers the compensation paid to 

parents who are hired by the state to provide full-time care 

to their developmentally disabled children. Every other 

appellate court to consider part 5.609(c)(16) — the United 

 

1 Hereafter part 5.609(c) — and, when referred to in a 

citation parenthetical, § 5.609(c). (See California Style 

Manual (2000) § 2:44.)
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

2

States Court of Appeals for the Fifth Circuit, the Minnesota 

Supreme Court, and our Court of Appeal — has adopted a 

narrower construction, limiting the exclusion to those state 

payments that reimburse a family’s expenditures. In 

contrast, these courts have held that compensation to parents 

for their labor in caring for a developmentally disabled child, 

which constitutes genuine income to the family, is outside the 

scope of the exclusion.

The conclusion reached by these other appellate courts 

is the most straightforward reading of the relevant 

regulatory language, which is restricted to payments made 

“to offset the cost of services and equipment.” (§ 5.609(c)(16).) 

And this interpretation fully serves my understanding of the 

purpose underlying the regulation, which is to ensure that 

families caring for a developmentally disabled family 

member are not disadvantaged in their receipt of Section 8 

housing assistance by their acceptance of state help in 

keeping the family member at home. Significantly, the 

narrower interpretation is the one urged on us by the United 

States Department of Housing and Urban Development 

(HUD), the federal agency that drafted the regulation.

The majority’s more expansive construction of the 

regulation relies on a strained reading that disregards the 

actual language, and it will have unfortunate and selective 

public policy consequences. First, the majority’s ruling will 

introduce unintended and unwarranted inequities into the 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

3

administration of Section 8. Second, the majority’s 

misreading will siphon scarce housing assistance from 

California’s other low-income families, inevitably reducing 

the number of families who will benefit from the Section 8 

program. In light of the misguided, if well-intentioned, 

nature of the majority’s analysis, I respectfully dissent.

I. BACKGROUND

A. Plaintiff’s Circumstances

Plaintiff Kerrie Reilly and her adult daughter, K.R., 

live together in a three-bedroom apartment in Marin County. 

Due to a severe developmental disability, K.R. requires 

around-the-clock supervision. Under the In-Home 

Supportive Services program (IHSS; Welf. & Inst. Code, 

§ 12300 et seq.), the state pays plaintiff to provide full-time 

home care and supervision to her daughter. Without such 

care, K.R. would likely be placed in an institution. At the 

time of the trial court proceedings, the family’s annual 

income exceeded $52,000, comprised of K.R.’s social security 

benefits of $11,000 and more than $41,000 in IHSS 

compensation to plaintiff.

Plaintiff is a long-time participant in Section 8. In 

2004, plaintiff’s second daughter, R.R., moved from the 

family’s apartment to attend college. For the next five years, 

plaintiff falsely represented in annual, sworn certifications to 

the Marin Housing Authority (Authority), the agency 

responsible for administering her Section 8 benefits, that 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

4

R.R. continued to live with her.2 After the Authority learned 

the truth, plaintiff admitted that she made the 

misrepresentations because she was concerned that she and 

K.R. would be required to move from their three-bedroom 

apartment if she disclosed R.R.’s move. Plaintiff’s false 

representations also caused her to be granted, the Authority 

concluded, a larger Section 8 housing voucher than she would 

have received had the Authority known the true 

circumstances. When the Authority confronted plaintiff, she 

agreed to repay more than $16,000 in excess subsidies under 

a payment schedule. Unfortunately, plaintiff was often 

unable to make the scheduled payments. The Authority’s 

patience ran out in 2015, when it terminated her 

participation in the Section 8 program.

As the Authority informed the trial court in explaining 

its decision to terminate plaintiff, its implementation of 

Section 8 is severely constrained by limited funding. In 2015, 

more than 5,000 families in Marin County eligible for 

Section 8 housing assistance were on a waiting list because 

the Authority was unable to help them. At the time, the 

Authority was authorized to grant vouchers to only 2,153 

families; in practice, it provided rent vouchers only to 1,957 

 

2 The majority’s statement that plaintiff “did not inform” 

the Authority of R.R.’s departure (maj. opn., ante, at p. 2) is 

a charitable but misleading characterization of plaintiff’s 

repeated and knowing falsehoods.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

5

families due to insufficient funding. The Authority decided 

to terminate plaintiff because, it explained, although it “has 

been grappling with the possibility of terminating hundreds 

of compliant families from the Section 8 Program, [plaintiff] 

has made it a practice to violate rules of the Section 8 

Program and her contractual obligations.” Contrary to 

majority’s claim (maj. opn., ante, at p. 2), the termination did 

not require plaintiff’s eviction from her apartment, although 

she would become responsible for paying the entire rent.

In this mandate action challenging her termination, 

plaintiff argued that the Authority had improperly included 

her IHSS payments when calculating her annual income 

under Section 8, causing the Authority to understate the 

housing subsidy due her. The trial court disagreed, 

sustaining the Authority’s demurrer without leave to amend 

upon concluding that the IHSS payments were properly 

included in plaintiff’s income calculation. The Court of 

Appeal affirmed in a published decision. (Reilly v. Marin 

Housing Authority (2018) 23 Cal.App.5th 425, 439 (Reilly).) 

The Supreme Court now reverses the Court of Appeal.

B. Governing Law

1. Section 8

The Section 8 voucher program “is funded by HUD and 

administered by state and local public housing authorities 

. . . in accordance with regulations promulgated by HUD. 
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Cantil-Sakauye, C. J., dissenting

6

When a rent payment exceeds a specified percentage of a 

family’s monthly income, the federal program pays the 

balance.” (Inclusive Communities Project, Inc. v. Lincoln 

Property Co. (5th Cir. 2019) 920 F.3d 890, 900.) As HUD 

characterizes the program in an amicus curiae brief, 

“Section 8 is not an entitlement program; Congress 

appropriates only a fixed sum for vouchers . . . each year, and 

not every otherwise qualified family receives a voucher.”3 

Each administering agency is assigned a maximum number 

of annual vouchers and has a fixed budget.4 Yet Congress 

has underfunded the program in recent years, requiring 

 

3

If the Authority’s experience is any guide, HUD’s 

concession that “not every otherwise qualified family receives 

a voucher” is a gross understatement. More than 7,000 

families in Marin County are eligible for assistance under 

Section 8, but fewer than 2,000 are actually provided 

vouchers.

4 See Congressional Research Service, An Overview of 

the Section 8 Housing Programs: Housing Choice Vouchers 

and Project-Based Rental Assistance, No. RL32284 (Feb. 7, 

2014). A copy of the report can be found at 

<https://www.everycrsreport.com/reports/RL32284.html#:~:t

ext=The%20voucher%20program%20is%20funded,an%20an

nual%20budget%20from%20HUD.> (as of Aug. 28, 2020). All 

Internet citations in this opinion are archived by year, docket 

number, and case name at <http://www.courts.ca.gov/

38324.htm>.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

7

these agencies to operate at only 85 percent of their assigned 

budgets.5

Each subsidized family is required to contribute to its 

rent payment an amount equal to “thirty percent of the 

tenant family’s monthly ‘adjusted income’ or ten percent of 

its monthly gross income, whichever is greater.” (Hayes v. 

Harvey (3d Cir. 2018) 903 F.3d 32, 36, citing 42 U.S.C. 

§ 1437f(o).) “Adjusted income” for this purpose is a family’s 

“annual income,” minus certain expenses and allowances. 

(24 C.F.R. § 5.611 (2020); DeCambre v. Brookline Housing 

Authority (1st Cir. 2016) 826 F.3d 1, 9 (DeCambre).) The 

calculation of annual income therefore determines the 

proportion of its monthly rent that a family participating in 

Section 8 must pay.

For purposes of Section 8, “annual income” constitutes 

“all amounts, monetary or not” that “[g]o to, or on behalf of,

the family head or spouse . . . or to any other family member.” 

(24 C.F.R. § 5.609(a)(1), (3) (2020); DeCambre, supra, 826 

F.3d at p. 9.) Among other things, this includes “[t]he full 

amount, before any payroll deductions, of wages and 

salaries, . . . and other compensation for personal services.” 

(24 C.F.R. § 5.609(b)(1) (2020).) Subpart (c) of part 5.609 lists

 

5 Eligibility Team, How the Housing Choice (Section 8) 

Voucher Program is Funded (Jan. 22, 2016) 

<https://eligibility.com/section-8/how-the-housing-choicesection-8-voucher-program-is-funded#> (as of Aug. 28, 2020).
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Cantil-Sakauye, C. J., dissenting

8

16 exclusions from annual income. In addition to the

exclusion on which plaintiff relies, part 5.609(c)(16), which 

excludes certain payments to a family providing at-home care 

to a developmentally disabled family member, these include 

payments received “for the care of foster children” 

(§ 5.609(c)(2)), payments “for, or in reimbursement of, the 

cost” of medical expenses (§ 5.609(c)(4)), students’ financial 

aid (§ 5.609(c)(6)), certain nonrecurring payments 

(§ 5.609(c)(3), (9)), and student earnings and adoption 

assistance payments “in excess of $480” (§ 5.609(c)(11), (12)).

2. IHSS

The purpose of the IHSS program is “to avoid

institutionalization of incapacitated persons. It provides

supportive services to aged, blind, or disabled persons who

cannot perform the services themselves and who cannot

safely remain in their homes unless the services are provided

to them. The program compensates persons who provide the

services to a qualifying incapacitated person.” (Basden v. 

Wagner (2010) 181 Cal.App.4th 929, 931 (Basden).) IHSS is 

administered by the state’s counties (Skidgel v. California 

Unemployment Ins. Appeals Bd. (2018) 24 Cal.App.5th 574, 

578–579), which either hire a caregiver for the recipient or 

pay the recipient directly to cover the costs of a caregiver. 

(Basden, at p. 934; Welf. & Inst. Code, §§ 12302, 12304, subd. 

(a).) Counties are required to give preference to a care 

provider selected by the recipient, and some IHSS care 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

9

recipients are entitled to select and hire their own provider. 

(Welf. & Inst. Code, §§ 12303.4, subd. (b); 12304, subd. (a), 

12304.1; Skidgel, supra, 24 Cal.App.5th at p. 579.)

The state may hire parents to care for their children 

under IHSS, but only “when the [parent] leaves full-time

employment or is prevented from obtaining full-time 

employment because no other suitable provider is available.” 

(Welf. & Inst. Code, § 12300, subd. (e); see generally, Basden, 

supra, 181 Cal.App.4th at pp. 939–940.) Of the 535,000 IHSS 

care providers in California, about 70 percent are a relative 

or spouse of the recipient, and about one-quarter of those are 

a parent. Slightly less than half of IHSS providers — 250,000 

persons — are, like plaintiff, relatives of the person for whom 

they provide care and live in the same home.6

Plaintiff’s claim that her IHSS payments should be 

excluded from the calculation of her Section 8 annual income 

is premised on part 5.609(c)(16), which excludes “[a]mounts 

paid by a State agency to a family with a member who has a 

developmental disability and is living at home to offset the 

cost of services and equipment needed to keep the 

 

6 The State Department of Social Services reports a wide 

range of monthly data regarding participation in the IHSS 

program. The information cited in this paragraph is from a 

table of data for June 2020, maintained at IHSS Program 

Data <https://www.cdss.ca.gov/inforesources/ihss/programdata> (as of Aug. 28, 2020). The cited data is available under 

a tab labeled “Provider Details,” which does not appear to be 

accessible through a separate URL.
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Cantil-Sakauye, C. J., dissenting

10

developmentally disabled family member at home.” The 

Authority and HUD interpret the phrase “[a]mounts paid . . . 

to offset the cost of services and equipment” to cover only 

payments by the state to compensate for a family’s actual 

expenditures on services or equipment. (§ 5.609(c)(16.) 

Because plaintiff’s IHSS compensation was not used to pay 

for the costs of services or equipment purchased by the family 

to care for K.R., the Authority explains, it did not exclude 

plaintiff’s IHSS payments when calculating her annual 

income. Plaintiff contends, however, and the majority holds, 

that the phrase “[a]mounts paid . . . to offset the cost of 

services and equipment” (ibid.) should be construed to cover 

any payment made to a family by the state in connection with 

the in-home care of a developmentally disabled family 

member, regardless of whether the payment offset an 

expenditure by the family or compensated a family member 

hired by the state to care for the disabled person. 

II. DISCUSSION

A. The Language of Part 5.609(c)(16) Precludes 

the Majority’s Interpretation

We review questions of statutory interpretation de

novo. (Christensen v. Lightbourne (2019) 7 Cal.5th 761, 771.) 

Under “our familiar principles of statutory construction,”

“ ‘[w]e start with the statute’s words, which are the most

reliable indicator of legislative intent.’ [Citation.] ‘ “We

interpret relevant terms in light of their ordinary meaning,
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Cantil-Sakauye, C. J., dissenting

11

while also taking account of any related provisions and the

overall structure of the statutory scheme to determine what

interpretation best advances the Legislature’s underlying

purpose.” ’ [Citations.] ‘If we find the statutory language

ambiguous or subject to more than one interpretation, we

may look to extrinsic aids, including legislative history or

purpose to inform our views.’ ” (In re A.N. (2020) 9 Cal.5th

343, 351–352 (A.N.).) We take the same approach when

interpreting administrative regulations. (Centinela Freeman

Emergency Medical Associates v. Health Net of California,

Inc. (2016) 1 Cal.5th 994, 1011.) Based on the ordinary

meaning of its language, we should conclude that the

part 5.609(c)(16) exclusion is limited to state payments that 

compensate a family’s actual expenditures for services and 

equipment to keep a developmentally disabled family 

member in their home.

As noted above, part 5.609(c)(16), excludes from a 

Section 8 family’s annual income “[a]mounts paid by a State 

agency to a family . . . to offset the cost of services and 

equipment needed to keep the developmentally disabled 

family member at home.” According to Merriam-Webster, 

the verb “offset” means “to serve as a counterbalance for : 

COMPENSATE.” (Merriam-Webster Dict. Online (2020) 

<https://www.merriam-webster.com/dictionary/offset> [as of 

Aug. 28, 2020]; see, e.g., Steinmeyer v. Warner Cons. Corp. 

(1974) 42 Cal.App.3d 515, 518 [“An ‘offset’ may be defined as 
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Cantil-Sakauye, C. J., dissenting

12

a claim that serves to counterbalance or to compensate for 

another claim”].) Part 5.609(c)(16) therefore excludes 

payments by the state to a family that are made to 

“counterbalance” the cost of services and equipment needed 

to keep the developmentally disabled family member at 

home. Necessarily, this language anticipates that an 

equivalent cost has been or will be paid by the family for 

those services or equipment, since there would be nothing to 

counterbalance in the absence of such an expenditure.

If HUD, the agency that drafted part 5.609(c)(16), had 

intended the regulation to bear the broader meaning imposed 

by the majority, it could have used a more inclusive phrase, 

such as amounts paid by the state “for services and 

equipment,” instead of requiring the excluded payments to 

“offset the cost” of services and equipment. This is the

approach taken by HUD in drafting the only part 5.609(c) 

exclusion that undoubtedly bears the breadth bestowed on 

subpart (c)(16) by the majority. Part 5.609(c)(2) excludes 

“[p]ayments received for the care of foster children or foster 

adults (usually persons with disabilities, unrelated to the 

tenant family, who are unable to live alone),” leaving no 

uncertainty about its meaning.7(Italics added.) By imposing 

 

7 The parenthetical presumably explains the reason for 

the breadth of the exclusion: To provide a benefit to lowincome families that care for unrelated persons who are in 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

13

a similar breadth on part 5.609(c)(16), the majority’s reading 

renders pointless the use of the term “offset” because its 

reading is not restricted to the exclusion of payments that 

“offset the cost” of services and equipment. It is an 

elementary principle of statutory interpretation that “ ‘[a]n 

interpretation that renders statutory language a nullity is 

obviously to be avoided.’ ” (Tuolumne Jobs & Small Business 

Alliance v. Superior Court (2014) 59 Cal.4th 1029, 1039.) The 

majority’s expansive approach also defies the general 

interpretive principle that exceptions to a statute are to be 

construed narrowly. (Mathews v. Becerra (2019) 8 Cal.5th 

756, 771; Simpson Strong-Tie Co. v. Gore (2010) 49 Cal.4th 

12, 22.)

HUD has confirmed this understanding in an amicus 

curiae brief, arguing that it intended the regulation to reach 

only state payments that reimburse a family’s expenditures. 

As HUD reasons, this narrower reading “accords with the 

 

distressed circumstances. The majority contends that 

interpreting subpart (c)(2) differently from subpart (c)(16) 

“would be unreasonable” because both families are providing 

“the same care.” (Maj. opn., ante, at p. 28.) The different 

approaches, however, are readily explained. HUD could 

reasonably have concluded that the familial connection 

required by part 5.609(c)(16) makes it unnecessary to bestow 

this type of benefit on families covered by that exclusion. In 

any event, the distinctly different language in the two 

exclusions suggests that they should be interpreted 

differently.
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Cantil-Sakauye, C. J., dissenting

14

basic policy objectives of the regulation. [Citation.] As HUD 

has explained, in promulgating [part] 5.609(c)(16), the 

exclusion exists because ‘families that strive to avoid 

institutionalization should be encouraged, and not punished.’ 

[Citation.] The regulation pursues this goal in part by 

ensuring that families that choose different means of keeping 

the developmentally disabled family member at home are 

treated evenhandedly.”8

Plaintiff argues that the term “cost” could cover more 

than a monetary expenditure. In ordinary parlance, “cost,” 

admittedly, can refer not simply to the price paid for 

something, but more broadly to “the outlay or expenditure 

(as of effort or sacrifice) made to achieve an object” or the 

“loss or penalty incurred especially in gaining something.” 

(Merriam-Webster Dict. Online (2020)

<https://www.merriam-webster.com/dictionary/cost> [as of 

Aug. 28, 2020].) In this connection, plaintiff invokes the 

economic concept of an “opportunity cost,” that is, the 

opportunities foregone when a person makes a particular 

 

8 Leaving aside debate about the precise degree of 

deference to be accorded HUD’s interpretation under 

Yamaha Corp. of America v. State Bd. of Equalization (1998) 

19 Cal.4th 1, 7–8, the administrative agency’s interpretation 

undoubtedly deserves serious consideration. Although the 

majority does address HUD’s views, its explanation for 

rejecting them amounts to little more than a disagreement 

with HUD over which interpretation best serves HUD’s 

goals. (Maj. opn., ante, at pp. 28–30.)
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Cantil-Sakauye, C. J., dissenting

15

economic choice. Here, the argument goes, “cost” refers to the 

employment opportunities that plaintiff has foregone in order 

to provide care under IHSS. The payments therefore “offset” 

the cost to plaintiff of not having other employment. This is 

hardly the “ordinary meaning” of the language HUD chose to 

use. (A.N., supra, 9 Cal.5th at p. 351.) We typically refer to 

a payment for services as “compensation” or, more simply, 

“payment” for the work performed. We do not refer to 

compensation for providing a service as “offsetting the cost” 

of the service provider’s own effort, much less the service 

provider’s decision to take this job, rather than a different 

hypothetical job.

The majority takes a different tack in justifying its 

interpretation, suggesting that because much of the IHSS 

compensation paid to plaintiff will ultimately be spent on 

costs associated with supporting K.R. in the family home, 

that compensation is paid to “offset the cost of services and 

equipment needed to keep [K.R.] at home.” (§ 5.609(c)(16); 

see Maj. opn., ante, at p. 10 [“Whether a family uses homecare 

payments to support itself so that it may care for a 

developmentally disabled member at home, or instead uses 

the funds to pay a third party to provide care for some of the 

time, these payments do no more than ‘offset’ the ‘cost’ of 

services and equipment needed to avoid 

institutionalization”].) This rationale fails for two 

independent reasons. First, while it finds a role for the term 
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Cantil-Sakauye, C. J., dissenting

16

“offset,” it disregards other aspects of the regulatory 

language. Part 5.609(c)(16) excludes only state payments 

that offset expenditures for “services and equipment.” As 

rationalized above, the majority’s reading necessarily 

stretches the exclusion to cover any cost related to K.R.’s 

presence in the home, including food, clothing, and rent. 

These are not normally viewed as “services and equipment.”9 

By restricting the exclusion to the costs of “services and 

equipment,” HUD signaled its intent to exclude only costs 

related to the family member’s disability, rather than the 

ordinary, if necessary, expenses of daily life. Second, the 

regulation excludes “[a]mounts paid by a state agency . . . to 

offset the costs of services and equipment.” (§ 5.609(c)(16).) 

As discussed above, the IHSS compensation is paid by the 

state to compensate plaintiff for her labor in caring for her 

daughter. While it may be used by plaintiff to cover the costs 

of supporting her daughter, it is not paid by the state to offset 

those costs.

The restrictive view of part 5.609(c)(16) has been 

adopted by all other appellate courts that have considered the 

issue. The plaintiff in Anthony v. Poteet Housing Authority 

 

9

Indeed, because the majority reads the regulation to 

exclude the entirety of plaintiff’s IHSS compensation on this 

basis, it construes “the costs of services and equipment” to cover 

the cost of anything plaintiff chooses to spend her compensation 

on. 
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Cantil-Sakauye, C. J., dissenting

17

(5th Cir. 2009) 306 Fed. Appx. 98, the first decision to address 

this issue, lived with her developmentally disabled adult 

child. Under a state-funded program in Texas, she was 

employed by a private entity to care for the child and, like 

plaintiff, contended that the income she earned in this role 

should be excluded from her Section 8 income under 

part 5.609(c)(16). The court was willing to accept that her 

payments, despite being provided by a private employer, 

constituted payments by the state. It rejected her argument 

that the payments should be excluded from the calculation of 

her Section 8 income under part 5.609(c)(16), however, upon 

concluding that the exclusion applies only to reimbursements 

for costs paid for care by third-party providers. As the court 

explained, “One must incur costs before they can be offset.” 

(Anthony, at p. 101.)

The Court of Appeal below reached a similar conclusion 

after a more extensive analysis. It declined to equate “offset” 

with “reimburse,” but the distinction it found between the 

two terms was quite narrow and is inconsequential in these 

circumstances. As the court explained, part 5.609(c)(16)

“appears to reach money paid to a family so that the family 

can go out and hire services or purchase equipment necessary 

for the developmentally disabled family member. Such 

payments ‘offset the cost of services and equipment’ that 

would otherwise fall on the family. But they are not 

reimbursement for out-of-pocket expenses if the family 
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Cantil-Sakauye, C. J., dissenting

18

receives payment before, rather than after, incurring the 

expense.”10 (Reilly, supra, 23 Cal.App.4th at p. 434.) The 

appellate court below also rejected plaintiff’s argument that 

the IHSS payments should be excluded because “the services 

she provides are necessary for her daughter to live at home, 

and the IHSS payments offset the costs of those services.” 

(Id. at p. 432.) The court rightly accepted plaintiff’s 

contention that her services were necessary to keep K.R. at 

home, but it found the language of the regulation inconsistent 

with plaintiff’s argument that it excludes any payment for 

necessary services. As the court explained, part 5.609(c)(16) 

refers to payments “ ‘to a family . . . to offset the cost of 

services . . . .’ ” (Reilly, at p. 434.) “If a payment is to ‘offset 

the cost of services,’ the payment must go to the same entity 

that incurs the cost of those services. Otherwise the payment 

does not counterbalance or compensate for the cost of 

services. . . . This means that the costs these payments offset 

must be costs that the family itself incurs.” (Ibid.)

Most recently, the Minnesota Supreme Court reached 

the same conclusion in In re Ali (Minn. 2020) 938 N.W.2d 835 

(Ali). In that case the plaintiff lived at home with her 

developmentally disabled son. Under a Minnesota state 

 

10 The majority contends that “ ‘offset’ as used here does 

not necessarily reflect th[e] same meaning” as “reimburse” 

(maj. opn., ante, at p. 10), but it does not clearly articulate 

what the difference might be.
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Cantil-Sakauye, C. J., dissenting

19

program, she was provided with a budget for the services and 

equipment needed to keep him in the home, some of which 

she allocated to herself as compensation for her services as a 

caregiver. (Id. at p. 837.) In concluding that the sums 

allocated to plaintiff were not excluded from her Section 8 

income under part 5.609(c)(16), the court held that the word 

“cost” should be interpreted as “price.” (Ali, at p. 839.) It 

rejected the argument that the word should be given a 

broader definition for three independent reasons. First, 

referring to the entirety of the phrase “to offset the cost of 

services and equipment,” the court reasoned that “[t]he ‘and’ 

between the words services and equipment suggests that the 

same measurement is used for each. Typically, the cost of 

equipment is calculated in monetary terms — such as the cost 

to buy or lease.” (Ibid.) Second, like the appellate court 

below, Ali cited the use of the word “cost” elsewhere in part 

5.609, where it clearly refers to “a monetary expense.” (Ali, 

at p. 839.) Finally, the court noted that “when the regulators 

wanted to exclude amounts paid to family members for their 

own services, they knew how to do so — and did so 

unambiguously.” (Ibid.) Ali cited in support two other 

subparts of part 5.609(c), in both of which the regulatory 

language, unlike part 5.609(c)(16), unambiguously excludes 
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Cantil-Sakauye, C. J., dissenting

20

state payments made to the Section 8 family.11 (Ali, at 

p. 839.)

B. Extrinsic Aids to Interpretation Weigh 

Against the Majority’s Approach

I do not agree with the majority that the interpretation 

it has imposed on the language of part 5.609(c)(16) is 

sufficiently reasonable to create a statutory ambiguity, but 

there is no need to debate the issue. The available extrinsic 

aids to interpretation also weigh against the majority’s 

reading. Its interpretation assigns an unfounded purpose to 

the part 5.609(c)(16) exclusion that will seriously distort the 

intended operation of the annual income calculation for 

families receiving caregiving income under IHSS. In turn, 

this distortion will not only introduce unintended inequities 

among Section 8 families, but it is also likely to materially 

reduce the funds available to support housing subsidies for 

other low-income families in California. These unfortunate 

consequences weigh strongly against the majority’s ruling.

1. The rulemaking history does not support the 

majority’s reading

The majority finds support for its interpretation in 

commentary on part 5.609(c)(16) published by HUD around 

 

11 In addition to addressing part 5.609(c)(2), discussed 

above, which excludes payments to foster families, Ali cited 

part 5.609(c)(12), which excludes from annual income 

“[a]doption assistance payments in excess of $480 per 

adopted child.” (Ali, supra, 938 N.W.2d at p. 839.) 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

21

the time of its adoption. (Maj. opn., ante, at pp. 11–16.) 

Reviewing the same materials, the Court of Appeal found 

them “unhelpful in resolving the interpretive issue before 

us,” and I agree. (Reilly, supra, 23 Cal.App.5th at p. 436.) As 

quoted by the majority (maj. opn., ante, at p. 12), the 

commentary never expressly addresses the issue before us —

the distinction between state payments made to reimburse a 

family’s expenditures for services and those made to 

compensate the family’s own provision of services — and does 

little more than parrot the language of the regulation. The 

commentary does use the term “homecare payments,” but it 

characterizes those payments in the language of the 

exclusion itself. That is, “homecare payments,” as the term 

is used by HUD, are payments made “to offset the cost of 

services and equipment needed to keep a developmentally 

disabled family member at home, rather than placing the 

family member in an institution.” (60 Fed.Reg. 17388, 17389 

(Apr. 5, 1995).) HUD’s use of the term is therefore of no help 

in resolving the question before us.

The majority’s contrary conclusion is based on circular 

reasoning. Beginning with its assumption that “homecare 

payments” means any payment made by the state in 

connection with the care in the home of a developmentally 

disabled person, the majority concludes that by joining that 

term with the regulatory language HUD signaled its 

agreement with the majority’s broad interpretation. The 
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Cantil-Sakauye, C. J., dissenting

22

conclusion that “homecare payments” refers to any payment 

by the state, however, rather than only those intended to 

offset family expenditures, is unsupported by anything in the 

commentary. In fact, the commentary clearly uses “homecare 

payments” merely as a synonym for the type of payments that 

are excluded by part 5.609(c)(16). Its use therefore confirms 

the majority’s interpretation only if one assumes that the 

regulation should be interpreted in the manner adopted by 

the majority. In reality, the HUD commentary simply does 

not address the question before us.

The policy argument advanced by the majority in 

connection with HUD’s commentary is, in essence, that 

because payments made by the state to compensate a family 

for caregiving services may be critical in keeping a 

developmentally disabled family member in the home, they 

must be included within the part 5.609(c)(16) exclusion. The 

flaw in this logic, as the Court of Appeal noted in rejecting 

the same argument below (Reilly, supra, 23 Cal.App.4th at 

p. 434), is that it ignores the language of the regulation. 

Merely because these payments are important in keeping a 

developmentally disabled family member in the home does 

not alone mean that they “offset the costs of service and 

equipment” necessary to that task. As explained above, to 

reach the majority’s conclusion it is necessary to read the 

phrase “offset the costs” as synonymous with “for,” a different 

and broader term. Because it is the regulation’s language 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

23

that must guide our interpretation, we are required to 

respect HUD’s word choice.

2. The majority’s interpretation misunderstands the 

limited function of the part 5.609(c)(16) 

exclusion

The impetus underlying the majority’s interpretation of 

part 5.609(c)(16) seems to be to maximize the Section 8 

subsidy for persons in plaintiff’s situation, given the 

difficulties of their circumstances. In other words, if some 

subsidy is good, more is better. Because the purpose of the 

exclusion is to help burdened, low income families, it is 

difficult to argue with the sentiment. Yet our interpretation 

must be guided not by our own view of proper public policy, 

but by the views of Congress and HUD, the agency tasked 

with administering the Section 8 program. In implementing 

the congressional plan, HUD is required to balance a wide 

variety of pertinent policy and equity considerations, not the 

least of which is the allocation of very limited public 

resources among many needy families. Its policy choice is 

reflected in the language of part 5.609(c)(16), which limits 

the exclusion to out-of-pocket expenses. As discussed below, 

HUD’s choice is consistent with the foundational concerns of 

Section 8. The majority’s more expansive view upsets the 

balance struck by Section 8, will create unintended inequities 

in its implementation, and will ultimately lead to a 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

24

diminution in the housing assistance available to other lowincome Californians.

The purpose of the part 5.609(c)(16) exclusion is to 

ensure that the acceptance of state financial help by families 

who keep a developmentally disabled family member at home 

does not place the families at a disadvantage in receiving 

Section 8 housing assistance; they are to be “ ‘encouraged, 

and not punished.’ ” (Maj. opn., ante, at p. 12 [quoting HUD 

explanation].) To accomplish this, part 5.609(c)(16) excludes 

from the families’ annual income funds provided by the state 

that the family spends on services and equipment to support 

at-home care of the disabled family member. By excluding 

this type of payment, the regulation ensures that the 

acceptance of state aid by families maintaining a 

developmentally disabled family member does not inflate 

their annual income and result in a diminished Section 8 

subsidy. Instead, the family receives the same housing 

subsidy as other Section 8 families having a similar 

disposable income.

There is no indication in the language of the regulation 

itself or the limited regulatory history that, in adopting 

part 5.609(c)(16), HUD intended to go further and provide 

affirmative advantages to families with a developmentally 

disabled member at home. HUD did not say such families 

should be preferentially benefitted, and not punished. Yet 

such a preferential benefit is the consequence of the 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

25

majority’s interpretation of part 5.609(c)(16), since it affords 

families who are paid to provide at-home care of a 

developmentally disabled family member substantially 

greater Section 8 housing subsidies than to other low-income 

families with the same family income.

Section 8 housing subsidies are determined by a 

participating family’s income — that is, the funds available 

to the family to pay for rent and other daily needs.12 The 

part 5.609(c)(16) exclusion is necessary because the 

regulations defining “annual income” for purposes of Section 

8 are very broad, including “all amounts, monetary or not” 

that “[g]o to, or on behalf of, the family head or spouse . . . or

to any other family member.” (24 C.F.R. § 5.609(a)(1) (2020).) 

Given this comprehensive definition, any payments made by 

the state to a family for the care of a developmentally 

disabled family member are included in annual income under 

part 5.609(a), even if the payments are not available to the 

family to pay for rent and other daily needs because they 

merely offset family expenditures for at-home care. Properly 

understood, part 5.609(c)(16) prevents a family’s annual 

income from being inflated by payments covering such out-of-

 

12 Literally, it is not the subsidy that is determined by a 

family’s income. Rather, annual income determines the 

amount the family is required to contribute to its rent 

payment. The subsidy is then the difference between this 

contribution and the family’s actual rent. For purposes of 

this analysis, the difference is immaterial.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

26

pocket expenses, recognizing that those payments should not 

be treated as income because they do not increase the 

resources available to the family for daily expenses. In the 

absence of the exclusion, the acceptance of such aid would 

reduce the family’s Section 8 subsidy without improving its 

standard of living — in the words of HUD, such families 

would be “punished.”

This highlights the fundamental difference, for 

purposes of Section 8, between IHSS funds that are given to 

reimburse expenditures by a family and funds that 

compensate a family for the care of the disabled family 

member. Unlike funds that reimburse a family’s 

expenditures, funds provided by the state to compensate for 

the family’s caregiving activities are available to meet the 

family’s daily needs. That is their purpose. In accepting 

compensation for their caregiving activities, IHSS 

participants are effectively selling their labor to the state, 

and the resulting income is indistinguishable, in its impact 

on the family’s standard of living, from money earned 

working outside the home. For that reason, HUD has 

determined that this compensation is properly characterized 

as income under Section 8.

This is particularly true of parents who are hired to 

provide caregiving responsibilities under IHSS. As noted 

above, the state precludes a parent’s acceptance of full-time 

work outside the home if the parent is receiving IHSS 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

27

compensation; such funding is available to parents only if 

“the [parent] leaves full-time employment or is prevented 

from obtaining full-time employment because no other 

suitable provider is available.” (Welf. & Inst. Code, § 12300, 

subd. (e).) In other words, to receive funds from IHSS a 

parent must accept their disabled child’s care as, in effect, 

their job. Plaintiff is an example. So far as the appellate 

record reveals, caring for her daughter is her full-time 

activity, and IHSS compensation is her only income.

The majority argues that the acceptance of 

compensation from IHSS is not “ ‘an employment for all 

purposes.’ ” (Maj. opn., ante, at p. 24.) The issue here, 

however, is not whether IHSS “employs” caregivers for all 

purposes. As defined by part 5.609, “annual income” includes 

any “compensation for personal services,” not just income 

from formal employment. (24 C.F.R. § 5.609(b)(1) (2020).) 

The issue is therefore whether the compensation received 

from IHSS by persons like plaintiff should be treated the 

same as income received by Section 8 participants from other 

types of compensable labor. By limiting the exclusion of 

part 5.609(c)(16) to offsetting payments, HUD has declared 

that it should. The majority may disagree with HUD’s policy 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

28

choice, but it is HUD’s choice, not that of the majority, that 

must govern our interpretation.13

Excluding IHSS compensation from a Section 8 family’s 

annual income, as the majority requires, artificially reduces 

the family’s income and, consequently, increases the family’s 

housing subsidy above the level justified by its actual income. 

The effect can be substantial. Take, as an example, plaintiff. 

As noted above, a Section 8 family is ordinarily required to 

contribute 30 percent of its annual income toward rent. The 

remainder of its rent is paid by the program. Plaintiff’s 

family income in the latest year for which we have 

information was more than $52,000, consisting primarily of 

plaintiff’s $41,000 income from IHSS; the remainder was 

$11,000 in disability payments to K.R. If plaintiff’s IHSS 

compensation is included in her annual income for purposes 

of Section 8, the family would be expected to contribute 

$1,300 toward its monthly rent. Here, the majority would 

exclude plaintiff’s $41,000 in IHSS compensation from the 

 

13 The majority also finds support in the exclusion of inhome care payments from “income” under the Internal 

Revenue Code. (Maj. opn., ante, at pp. 26–27.) Because 

Section 8 and the Internal Revenue Code are quite different 

statutes with very different aims, there is no reason why the 

exclusion of IHSS payments from federal taxable income 

should weigh in favor of their exclusion from “annual income” 

under Section 8.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

29

family’s annual income. Plaintiff’s family will therefore be 

treated as though it had an annual income of $11,000, 

although it was living on an actual income of $52,000 per 

year. As a result, the family’s expected rent contribution will 

be reduced to $275.14 The remaining $1,005 of the family’s 

monthly rent payment, an annual gap of more than $12,000, 

must be made up from the Authority’s Section 8 funds. It is 

noteworthy that the majority nowhere acknowledges, let 

alone attempts to explain or justify, that its interpretation 

will treat a family with an annual income exceeding $52,000, 

more than three times the federal poverty level for a family 

of two, as though it were living far below the poverty line.15 

Yet that is the clear and unavoidable import of its decision.

Low-income families caring for a developmentally 

disabled family member at home face daily challenges 

 

14 This assumes the resulting subsidy does not exceed the 

maximum permitted. Section 8 housing subsidies are capped 

by a “payment standard,” which is determined by local rental 

conditions. (See Nozzi v. Housing Authority (9th Cir. 2015) 

806 F.3d 1178, 1184–1185; 24 C.F.R. § 982.503(b) (2020); 42 

U.S.C. § 1437f(o)(2).) The appellate record does not contain 

sufficient information from which we may determine whether 

plaintiff’s subsidy, as re-jiggered by the majority, would be 

capped.

15 The 2020 federal poverty level for a family of two is an 

annual income of $17,240. (See U.S. Dept. Health & Human 

Services, Poverty Guidelines (Jan. 2020) 

<https://aspe.hhs.gov/poverty-guidelines> [as of Aug. 28, 

2020].) 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

30

unknown to the rest of us. Few would begrudge such families 

a generous housing subsidy, above and beyond that provided 

to other low-income families with a similar income — if there 

was evidence that Congress or HUD intended to provide 

them such assistance. But as noted above, the 

part 5.609(c)(16) exclusion was intended to ensure that 

families receiving aid from IHSS are simply treated the same 

as, not better than, other families — to ensure that they were 

not punished, rather than to preferentially benefit them.

3. The majority’s interpretation will introduce 

unintended inequities into Section 8 

implementation and reduce the availability of 

Section 8 housing assistance in California

As discussed above, the majority’s reading of the 

part 5.609(c)(16) exclusion is contrary to its language and 

achieves the result, unintended by HUD, of granting IHSS 

participants like plaintiff substantially greater Section 8 

subsidies than are justified by their actual income. That 

alone, of course, would be sufficient to reject the reading. But 

we should be particularly wary of imposing a rule HUD did 

not write, given the serious public policy consequences that 

will follow.

As explained below, these consequences are of two 

types. First, the interpretation adopted by the majority will 

create inequities among families participating in the IHSS 

and Section 8 programs. Families that are paid through 

IHSS to care at home for a developmentally disabled person 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

31

will receive a far larger housing subsidy than families of 

similar income that (1) IHSS funds to hire a third party to 

care for a developmentally disabled family member in their 

home or (2) receive IHSS funds to care for a medically

disabled family member. 

Second, and just as important, the majority’s 

interpretation will reduce, by an unknown but potentially 

sizable amount, the number of families that can obtain 

Section 8 housing assistance in California. The majority’s 

decision will not increase by a single dollar the Section 8 

funds reaching California. Yet it will require the state’s 

counties to steer a significantly larger portion of their Section 

8 housing funds to families that receive IHSS compensation 

for caring for a disabled member in the home. These 

increased subsidies can come from only one place: The funds 

available to other low-income families who are, or would have 

been, receiving housing assistance under Section 8. The 

majority’s expansive interpretation will come at the cost of 

assistance to other families in need. 

First the inequities. IHSS provides families with the 

funds necessary to maintain a developmentally disabled 

family member in their home. The Authority or the family 

can use these funds to hire a third-party caregiver or, 

alternatively, a member of the family for the same role. Both 

approaches serve the purposes of IHSS and the 

part 5.609(c)(16) exclusion by (1) keeping the 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

32

developmentally disabled family member out of an 

institution and (2) ensuring that the family is not 

disadvantaged in the receipt of Section 8 funds by doing so. 

So far as appears, neither HUD nor IHSS favors one option 

over the other; certainly there is no language in either 

Section 8 or IHSS reflecting a preference, as the majority 

acknowledges. (Maj. opn., ante, at p. 21 [“despite no 

expressed preference for family providers per se”].) Yet 

under the majority’s reading a family that provides its own 

compensated care will receive a far larger Section 8 housing 

voucher than the family that uses IHSS funds to hire a 

nonfamily member to provide the same care, even if both 

families have identical incomes. This occurs because, under 

the majority’s interpretation, some or all of the income of the 

first family, consisting of compensation received from IHSS, 

is excluded from the annual income, while the income of the 

second family, earned outside the home, is fully included. 

Assuming both families end up with similar disposable 

income, the first family will receive a far larger subsidy under 

Section 8 due to the exclusion of a significant portion of its 

disposable income. (See Reilly, supra, 23 Cal.App.5th at 

pp. 437–438.) There is no indication in the language of 

part 5.609(c)(16) or the regulatory history to suggest that 

HUD intended this result; in its amicus curiae brief, HUD 

expressly disavows such an intent.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

33

The majority seeks to explain away this disparity by 

claiming that persons needing 24-hour care “ ‘are more likely 

to receive better continuous care from relatives living with 

them whose care is more than contractual.’ ” (Maj. opn., ante, 

at pp. 21, quoting Miller v. Woods (1983) 148 Cal.App.3d 862, 

870.) Neither Miller nor our appellate record contains 

evidence to support the proposition that third-party 

caregivers provide substandard care, compared to family 

members.16 But more to the point, the majority cites no 

evidence that HUD believed this to be true or that it crafted 

part 5.609(c)(16) based on any assumptions about the relative 

competence of family members versus third-party caregivers. 

Much of the majority’s policy justification for its 

interpretation is a recognition of the importance and 

difficulty of the work done by persons who care for a 

developmentally disabled family member at home. And I 

agree, there is no doubt that this work is difficult and 

important. If preferentially benefitting families who care for 

developmentally disabled members themselves, rather than 

 

16 The majority notes that IHSS does not pay for 24-hour 

care. (Maj. opn., ante, at p. 26.) Although true, that is of no 

policy consequence here. Families that hire a third-party to 

provide care for a developmentally disabled family member 

in their home must provide the same type of uncompensated 

off-hours care for the dependent as families that receive IHSS 

compensation.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

34

retain a third-party caregiver, were actually a motive 

underlying part 5.609(c)(16), however, one would expect 

some express indication that HUD intended to favor family 

care over care by third-party providers. As noted above, there 

is no such indication. In fact, the regulation is entirely silent, 

and therefore presumably neutral, on that issue.17

The majority’s interpretation will create a similar 

inequity between families that receive IHSS compensation to 

care for a developmentally disabled family member and 

families that receive IHSS funds to care for a medically

disabled family member. (See Reilly, supra, 23 Cal.App.5th 

at p. 438.) Like families maintaining a developmentally 

disabled member in the home, families that maintain a 

medically disabled family member in the home can receive 

IHSS reimbursement for expenditures necessary to keep that 

person at home as well as compensation for caregiving by a 

family member. The Section 8 exclusion covering families 

with a medically disabled member, however, allows the 

 

17 The majority also claims that if IHSS compensation is 

not excludable under part 5.609(c)(16), the two programs, 

IHSS and Section 8, will be at “cross-purposes,” presumably 

because accepting IHSS compensation will reduce a family’s 

Section 8 subsidy. (Maj. opn., ante, at p. 23.) Accepting IHSS 

compensation, however, is no more at cross-purposes with 

Section 8 than is employment generally, since all income 

reduces a family’s Section 8 subsidy to the same degree. In 

any event, there are no cross-purposes. The supplement to a 

family’s income from accepting IHSS compensation far 

exceeds any corresponding decline in its Section 8 subsidy.
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

35

exclusion from annual income only of “[a]mounts . . . that are 

specifically for, or in reimbursement of, the cost of medical 

expenses . . . .” (§ 5.609(c)(4).) Although families caring for a 

medically disabled family member face challenges similar to 

those of families caring for a developmentally disabled family 

member, the enhanced Section 8 subsidy made available by 

the majority’s interpretation of part 5.609(c)(16) is 

unavailable to families with a medically disabled member. 

Such families will also receive a materially reduced Section 8 

subsidy compared to families that benefit from the majority’s 

interpretation of part 5.609(c)(16).

The majority responds that this disparity “is inherent 

in the federal regulation itself” because part 5.609(c)(4) 

permits recovery only of payments to third-party providers. 

(Maj. opn., ante, at p. 19.) The argument misses the point. 

Part 5.609(c)(16) has a materially wider scope than 

part 5.609(c)(4) only because the majority has interpreted it 

that way. If “offset the cost of services and equipment” is 

interpreted to cover only the reimbursement of out-of-pocket 

expenditures, the two exclusions have a similar scope. It is 

not “the federal regulation itself,” but the majority’s 

interpretation of it, that creates an inequity. The majority 

otherwise fails to explain what possible public policy supports 

giving families with a developmentally disabled member far 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

36

more advantageous treatment under Section 8 than families 

with a medically disabled family member.18

The second unfortunate policy consequence of the 

majority’s interpretation of part 5.609(c)(16) is its inevitable 

diminution of the funds available to other low-income 

participants in the Section 8 program. In an ideal world, the 

majority’s award of greater Section 8 housing subsidies to 

low-income families receiving state compensation to care for 

disabled family members at home would be financed by 

additional congressional appropriations for the Section 8 

program. In our real world, it does not work that way. 

Already, Section 8 housing subsidies are available only to a 

relatively small subset of all eligible families. The Authority, 

for example, is authorized to serve less than one-third of the 

families that qualify for its help. Yet even that does not fully 

capture the inadequacy of the program. Presumably because 

 

18 The majority’s claim that HUD believes that families 

with a developmentally disabled member would “receive 

unfair treatment” if they were not allowed to exclude income 

(maj. opn., ante, at p. 20) is based entirely on HUD’s comment 

that such families should be “ ‘encouraged, and not 

punished’ ” (ibid., italics omitted). Because no other class of 

Section 8 participants, besides foster parents, is able to 

exclude such income, restricting the exclusion to 

reimbursement of expenditures hardly constitutes 

punishment. The majority argues that such families will be 

punished if their income is not excluded because they might 

not qualify for Section 8 subsidy. (Ibid.) Again, the same is 

true of all other families who have too much income to qualify 

for Section 8; it is not a punishment. 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

37

of congressional underfunding, the Authority actually 

provides vouchers to only 1,957 families, rather than the 

2,153 it is authorized to help. 

The majority’s generosity toward plaintiff and similar 

IHSS participants does not come without cost, and that cost 

will likely be borne by other low-income families in 

California. The funding available to the Authority will not 

be increased by $12,000 per year merely because the majority 

has decreed that plaintiff must receive an additional annual 

subsidy of $12,000. Instead, given the fixed and inadequate 

budgets available under Section 8, it is likely that every 

additional dollar of subsidy provided to families with a 

developmentally disabled member at home will come directly 

from the funds available to subsidize the housing of other 

low-income families that are, or could have been, served by 

the Authority. By skewing the allocation of Section 8 housing 

subsidies to families receiving IHSS compensation, contrary 

to HUD’s express intent, the majority’s misinterpretation of 

the regulation will likely lead to a reduction in the housing 

subsidies available to other low-income families in California, 

and these will likely be reduced in an amount equal to the 
REILLY v. MARIN HOUSING AUTHORITY

Cantil-Sakauye, C. J., dissenting

38

enhanced subsidies given by the majority to IHSS 

participants.19

If the language of part 5.609(c)(16) required this result, 

we would be duty-bound to implement it. In fact, the result 

is eminently avoidable. To bring it about, the majority 

stretches the language of the regulation and fails to account 

for the serious public policy implications weighing against its 

decision. Further, the dubious end result is to require the 

Authority to treat a family with an income of more than 

$50,000 as though it were living on $11,000. In the process, 

the majority will divert the Authority’s all-too-scarce lowincome housing assistance away from other needy families. 

Every other court to consider the issue has avoided this 

result, and this court should as well.

CANTIL-SAKAUYE, C. J.

We Concur:

CORRIGAN, J.

KRUGER, J.

 

19 We lack the evidence necessary to estimate the financial 

impact of the majority’s interpretation, but the limited 

information available suggests that it could be substantial. 

According to the state data cited above (see ante, fn. 6), there are 

currently 250,000 “live-in relative providers” caring for a 

disabled family member under IHSS. If just a tiny proportion 

of those live-in relatives care for a developmentally disabled 

person, participate in the Section 8 program, and receive IHSS 

compensation similar to that of plaintiff, the majority’s ruling 

will divert millions of dollars in Section 8 housing subsidies from 

other low income families state-wide.
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Reilly v. Marin Housing Authority

__________________________________________________________________________________

Unpublished Opinion

Original Appeal

Original Proceeding 

Review Granted XX 23 Cal.App.5th 425 

Rehearing Granted

__________________________________________________________________________________

Opinion No. S249593 

Date Filed: August 31, 2020

__________________________________________________________________________________

Court: Superior 

County: Marin 

Judge: Paul M. Haakenson 

__________________________________________________________________________________

Counsel:

Law Offices of Frank S. Moore, Frank S. Moore; Autumn M. Elliott, Ben Conway and Deborah Gettleman 

for Plaintiff and Appellant.

Morgan, Lewis & Bockius, Thomas M. Peterson and Jordan Mundell for Association of Regional Center 

Agencies, Autism Society of Los Angeles, CASHPCR, Disability Voices United, Fairview Families and 

Friends, Inc., Housing Choices, Jewish Los Angeles Special Needs Trust (JLA Trust), National Disability 

Rights Network, Professor Alison Morantz and Public Counsel as Amici Curiae on behalf of Plaintiff and 

Appellant.

Munger, Tolles & Olson and Michael E. Soloff for National Housing Law Project and Western Center on 

Law and Poverty as Amici Curiae on behalf of Plaintiff and Appellant.

Ilya Filmus; WFBM, Randall J. Lee, Anne C. Gritzer; Wilson Elser Moskowitz Edelman & Dicker and

Robert Cooper for Defendant and Respondent.

Paul Compton, Miniard Culpepper, David M. Reizes, Alexandra N. Iorio, Joseph H. Hunt, Alisa B. Klein, 

Melissa N. Patterson and Brad Hinshelwood for United States as Amicus Curiae on behalf of Defendant 

and Respondent.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Autumn M. Elliott

Disability Rights California

350 S. Bixel Street, Ste. 290

Los Angeles, CA 90017

(213) 213-8000

Robert Cooper

Wilson Elser Moskowitz Edelman & Dicker LLP

555 S. Flower Street, Suite 2900

Los Angeles, CA 90071

(213) 443-5100

Brad Hinshelwood

U.S. Department of Justice

950 Pennsylvania Avenue NW

Washington, DC 20530

(202) 514-7823