Court Opinion

ID: 8947196
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:30:53.413078+00
Date Added: 2024-06-11T17:09:53.082344
License: Public Domain

HEANEY, Circuit Judge,
dissenting.
I respectfully dissent. The regulation in question, 45 C.F.R. § 206.10(a)(l)(vii)(B) (1985), requires a reading of 42 U.S.C. § 602(a)(38) (Supp. Ill 1985) which causes a conflict among section 602(a)(38), other federal statutes, and state law. I believe this Court should interpret section 602(a)(38) to avoid this conflict and avoid the harsh effect caused by the regulation on the members of the appellees’ class. If Congress had intended the result decreed by the Secretary’s regulation, it could have said so forthrightly. I don’t believe that this Court should overrule the district court and deprive children of benefits that they are entitled to under the statute.
The members of appellees’ class in this case are children or representatives of children who receive one of two kinds of payments: social security benefits to replace the support formerly provided by a parent now dead, disabled, or retired (Title II benefits), or child support payments under state law to replace the support of a noncustodial parent. These children live in the same household as, and have a common parent with, dependent children receiving AFDC. The Secretary’s regulation requires the independently supported children and the dependent child to apply together for the AFDC benefits the dependent child seeks. Under the regulation, the Secretary can reduce the dependent child’s AFDC benefits by offsetting the Title II benefits or the child support payments of the independently supported children against the AFDC benefits.
The offset required by the regulation has led to a dramatic reduction in the size of the AFDC benefits received by many dependent children. For example, Jo Anne Heille is the divorced mother of two chil*526dren. One of her children received $227 a month in Title II benefits based on the social security earnings of her disabled father. The child’s half-brother received $331 a month in AFDC benefits. Because the Secretary’s regulation requires the Title II benefits to be offset against the AFDC benefits, the AFDC grant was reduced to $164. For some members of the class, the AFDC benefits have been terminated entirely because of the offset.
The Secretary contends that Congress intended this result under section 602(a)(38). I believe a contrary reading of the statute is required. In relevant part, section 602(a)(38) requires that in making a needs determination for a dependent child under AFDC, the states shall include “income of or available for” a co-resident sibling. The key question thus becomes whether Title II benefits and child support payments constitute “income of or available for” the co-resident sibling AFDC child.
On an intuitive level this question is deceptively straightforward. Benefits designated for a person would seem to be “income of or available for” that person. However, one must be mindful that a child receiving benefits such as Title II and state child support payments does not have direct access to that income to spend as that child chooses. Rather, these benefits are paid, because the child is a minor, to a parent or representative payee for the care of the child as directed by federal or state statute. See, e.g., 42 U.S.C. § 405(j) (Supp. Ill 1985) (representative payee provision); MinmStat. §§ 518.17; 518.54 (1969 & Supp. 1987). Therefore, Title II and state child support payments should not unquestionably be classified as “income of or available for” the child receiving them.
The majority to my mind makes such a mistake when it assumes that income from Title II and child support is “clearly” income “actually available” to the minor recipient of those benefits. See at 516. This conclusion ignores a line of cases which have examined the question of availability of income under AFDC statutes and regulations.1 In Owens v. Heckler, 753 F.2d at 675, Shelly Owens, a mother of a minor child, received Title II extended student benefits under 42 U.S.C. §§ 401-433 (1982). Owens also received AFDC benefits on behalf of her minor child. Prior to the passage of the Omnibus Budget Reconciliation Act (OBRA) of 1981, Pub.L. No. 97-35, 95 Stat. 357, the Secretary considered Owens’s Title II benefits to the mother not to be “income of or available for” her in determining her child’s AFDC benefits. See id. of 676 (citations omitted). After the enactment of OBRA, the Secretary changed department policy and considered Title II extended student benefits as available income. See id. (citations omitted).
In determining whether the Title II extended student benefits were available for the minor parent and thus includable in the AFDC needs determination, this Court considered whether the Title II benefits served a purpose distinct from that of AFDC. It found that with Title II extended student benefits, Congress intended to deter students from quiting high school for financial reasons. AFDC, on the other hand, was designed to assist in the care of dependent children. Id. at 679.
Because of the distinct purposes of AFDC and Title II extended student benefits, the Court concluded that the amount of benefits “actually needed” for educational expenses should not be “available” for the minor parent in determining need under the relevant AFDC statutes and reg*527ulations. Thus, no offset of the money “actually needed” for education against the AFDC benefits would be allowed.
In the instant matter, to determine whether Title II benefits and child support payments are “income of or available for” a co-resident sibling under section 602(a)(38), we must also consider the purpose of these payments. The Title II benefits are granted to the children under 42 U.S.C. § 402(d) (1982 & Supp. Ill 1985). A child receives Title II benefits if the child’s parent was insured under the Social Security Act and the parent dies, becomes disabled, or retires. See Matthews v. de Castro, 429 U.S. 181, 185-86, 97 S.Ct. 431, 434-35, 50 L.Ed.2d 389 (1976).
Unlike “general public assistance laws,” the purpose of Title II benefits is not to “pay money to those who need it the most.” Id. at 185, 97 S.Ct. at 434. “Rather, the primary objective [is] to provide workers and their families with basic protection against hardships created by the loss of earnings due to illness or old age.” Id. at 185-86, 97 S.Ct. at 434.
The purpose of child support payments is determined by state law. For example, in Minnesota, child support guidelines are used in the absence of a child support agreement between parents where one receives public assistance. See Minn.Stat. § 518.551 (Supp.1986). These guidelines “reflect a legislative determination that children are entitled to benefit from the income of the non-custodial parent and to enjoy the standard of living that they would have had if the marriage had not been dissolved.” Letoumeau v. Letourneau, 350 N.W.2d 476, 478 (Minn.Ct.App.1984) (applying guidelines in nonpublic assistance case).
The purposes of both Title II and state child support systems are not merely to provide support for a child at a welfare subsistence level. Title II is a government insurance program for wage earners, and state child support laws, at least in Minnesota, are designed to keep a child of a dissolved marriage at the same “standard of living” she or he enjoyed before the marriage dissolution.
The adoption of the Secretary’s interpretation of section 602(a)(38) compromises the purposes of these two long-standing benefit systems. By including a child’s Title II benefits or child support payments in the AFDC needs determination of their siblings living in the same home, the Secretary in essence presumes, not only that families share income, but also that a family with one AFDC child should, as a whole, survive at the AFDC subsistence level. In doing so, the regulation puts section 602(a)(38) in conflict with the Title II statutory scheme and state child support law, neither of which intended the child recipients in its system to be forced to survive at a welfare subsistence level.
When two federal statutes conflict, a court should attempt to reconcile them. Owens, 753 F.2d at 679 (citing Markham v. Cabell, 326 U.S. 404, 411, 66 S.Ct. 193, 196, 90 L.Ed. 165 (1945)). And, when state family-property law conflicts with federal law, the state law “must do ‘major damage’ to ‘clear and substantial’ federal interests before the Supremacy Clause will demand that state law be overridden.” Hisquierdo v. Hisquierdo, 439 U.S. 572, 581, 99 S.Ct. 802, 808, 59 L.Ed.2d 1 (1979) (citing United States v. Yazell, 382 U.S. 341, 352, 86 S.Ct. 500, 506,15 L.Ed.2d 404 (1966)). Here, I do not believe the Secretary has demonstrated that the state child support laws do “major damage” to “clear and substantial federal interests.” Nor is it expressly stated that state child support laws shall be overridden by section 602(a)(38).2
*528It thus must be determined what a reconciliation among the conflicting statutes requires. The interpretation of the term “income of or available for” in section 602(a)(38) used in Owens reconciles the conflicts with both the federal and state statutes. Following Owens, it is clear that unless section 602(a)(38) specifically includes the benefits in question as “available” income, the income should be considered “available” only to the extent it is “actually available.” In this case, that means that absent a specific inclusion, only that portion of the Title II benefits and child support payments which the independently supported child “actually” makes available for the entire family should be includable as income for the AFDC assistance unit. See Gorrie v. Heckler, 606 F.Supp. 368, 371 (D.Minn.1985).
The majority finds that such an interpretation, with regard to Title II benefits ignores the specific reference in section 602(a)(38) to Title II benefits. This part of the statute requires the income of the co-resident to be included in the needs determination “notwithstanding section 405(j) of this title, in the case of benefits provided under subchapter II of this chapter.” I agree with other federal courts which have held that this reference to the Title II statute is too ambiguous and incomplete to change so fundamentally the basis upon which Title II benefits are distributed.3 The reference omits other key Title II provisions such as 42 U.S.C. § 408(e) (Supp. Ill 1985) which makes it a felony for representative payees, e.g., custodial parents, to use Title II benefits for any purpose other than the support of the intended recipient.4 Because the Secretary’s regulation in essence presumes that a representative payee will share the Title II benefits with the entire family, it is very possible that the representative payee would be doing so in violation of section 408(e).
I recognize that the interpretation which I believe to be correct limits the sweep of the Deficit Reduction Act of 1984, an act obviously intended by Congress to reduce government spending. However, when the reach of the Act clashes with the purposes of other statutes, both federal and state, the Act must be carefully scrutinized. Here, such scrutiny is particularly warranted because the Secretary’s regulation encroaches significantly on Title II and child support recipients’ rights to their benefits under these programs. While this encroachment may not rise to a constitutional deprivation of property, it does in practical effect force the entire family, including the independently supported children, to subsist at an AFDC income level. This result is especially harsh considering that neither state child support nor Title II is a government entitlement program. A parent has been required to pay for the child’s right to those benefits under these programs. I do not think an intent to infringe the full right to these benefits should be imputed to Congress without a clear expression of such intent.
*529Accordingly, I think the district court’s judgment should be affirmed to the extent that the Secretary be enjoined from reducing or eliminating AFDC benefits received by a dependent child unless the Secretary reduces benefits only in the amount that a Title II or child support recipient in the same household actually shares those benefits with the household.

. See Owens v. Heckler, 753 F.2d 675, 679-80 (8th Cir.1985) (citing, e.g., Snider v. Creasy, 728 F.2d 369 (6th Cir.1984)); Riddick v. D’Elia, 626 F.2d 1084 (2d Cir.1980) (Title II benefits paid to mother’s representative payees); Turchin v. Butz, 405 F.Supp. 1263 (D.Minn.1976) (Minnesota non-WIN training allowance); Elam v. Hanson, 384 F.Supp. 549 (N.D.Ohio 1974) (Title II extended student benefits paid to full-time students between ages of 18 and 22); but see Sturgell v. Creasy, 640 F.2d 843 (6th Cir.1981) (veteran's nonservice-connected VA disability pension); Bosh v. Fahey, 53 N.Y.2d 896, 423 N.E.2d 49, 440 N.Y.S.2d 626 (1981) (Title II extended student benefits paid to full-time students between ages of 18 and 22).

. Nor do I believe that the legislative history of section 602(a)(38) supports the conclusion that section 602(a)(38) was intended to override the relevant Title II provisions and state child support laws by making Title II benefits and child support payments available for the assistance unit. First, the Secretary’s letter of May 25, 1983, cited by the majority, was written a year before the passage of 602(a)(38) and thus has questionable significance as legislative history. Red Lion Broadcasting Co. v. FCC 395 U.S. 367, 382 n. 11, 89 S.Ct. 1794, 1802 n. 11, 23 L.Ed.2d 371 (1969). Furthermore, nowhere is it explicitly stated that 602(a)(38) was intended to reach *528Title II benefits or child support payments. Nor does the legislative history suggest that the principle of "actual availability” used in Owens be abandoned. The terms "income" and "available" are not further defined in the legislative history cited by the majority.

. See e.g., White Horse v. Heckler, 627 F.Supp. 848 (D.S.D.1985); Frazier v. Pingree, 612 F.Supp. 345, 347-48 (M.D.Fla.1985).

. The majority also states that Cunningham v. Toan, 762 F.2d 63 (8th Cir.1985), supports its position that section 602(a)(38) is consistent with the representative payee obligations. Cunningham involved a minor parent who lived with her parents and received Title II benefits and AFDC benefits in behalf of her child. This Court held that the Title II benefits of the minor parent were income "available for” her under section 602(a)(38) and thus includable in her child's AFDC needs determination. Id. at 66. Cunningham can be distinguished from this case in that a parent has an obligation to support a child under state law. See, e.g., Minn. Stat. § 609.375 (Supp.1987) (criminal support of spouse or child). This obligation is recognized in the Title II scheme under 42 U.S.C. § 659(a) (Supp. Ill 1985) which allows a parent’s Title II benefits to be garnished for child support payments. In contrast, this case involves siblings who have no legal obligation to support each other. The conflict between the Secretary’s regulation and Title II is thus more pronounced.