Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
SUBJECT: Nebraska Department
of Social Services
Docket No. A-92-248
DATE: December 7, 1992
DECISION
The Nebraska Department of Social Services (Nebraska)
appealed the August
10, 1992 quality control (QC) review
determination of the Regional
Administrator of the
Administration for Children and Families (ACF).
Nebraska
QC review concluded that M.G. properly received an Aid to
Families with Dependent Children (AFDC) grant of $435.*
ACF
disagreed, finding that M.G. was totally ineligible
for AFDC assistance due
to the receipt of a Worker's
Compensation lump sum payment.
For the reasons discussed below, we sustain ACF's
determination.
Factual Background
The assistance unit (AU) for the AFDC grant as of the
review date of
March 1, 1992 consisted of M.G., who was
pregnant, and her two
children. The Nebraska standard of
need for four persons is
$435. In December 1991, M.G.
received a Worker's Compensation
settlement of $2,666.67,
due to a work-related injury. Nebraska QC
review found
that the case was correctly paid $435 in the review month
because, in its view, the case file demonstrated that the
lump sum was
no longer available to the family as of that
time.
Federal QC review disagreed that any portion of the lump
sum was
unavailable for reasons beyond the control of the
family. Accordingly,
federal QC calculated that the AU
was totally ineligible for AFDC assistance
from December,
1991 through May, 1992, with the remaining portion of the
lump sum to be included in the AU's income for June,
1992.
Nebraska requested that ACF reconsider the conclusion
reached by federal
QC. In a letter dated July 24, 1992,
Nebraska argued that the
following expenditures were
properly treated by State QC as being beyond the
control
of the family:
$810.00 Payment of
Car
$168.55 License/insurance
$
33.88 Comforter
$ 41.16 Coffee
maker/shoes
$200.00 Couch and chair
$
35.00 Coat
$ 40.00 Dresses
$
14.00 Shoes
$ 3.00 Belt
$
4.00 Socks
$ 50.00 Clothes (M.G.)
$
30.00 Clothes (children)
$ 90.00 Rent
increase
$111.74 Bicycles (2)
$
38.47 Watch
$ 33.45 Curtains
$1,703.25 Total
On reconsideration, ACF sustained the federal QC finding
of
ineligibility.
In its appeal request to this Panel, Nebraska asserted
that the local
agency file documented the following
expenditures, which it contended should
be deducted from
the lump sum amount to calculate the period of
ineligibility for M.G.:
$810.00 Purchase of
car
$168.55 License/car insurance
$141.00
Rent for December 1991, January and
February,
1992
$267.69 Utilities for December
1991,
January and February,
1992
$353.75 Clothing for M.G. and
children
$1,740.98 Total
Nebraska did not explain the difference between the
calculation it
provided to ACF and the one it presented
here. However, this
discrepancy is immaterial, as we
conclude that the expenditures described in
either
calculation were not beyond the control of the family and
thus
cannot be used to reduce the A.U.'s period of
ineligibility.
Relevant Legal Authority
In Nebraska Dept. of Human Resources, DAB QC23 (1992),
this Panel
sustained ACF's conclusion that an AU was
ineligible for an AFDC grant under
circumstances that
closely parallel those of M.G. That decision
interpreted
the relevant provisions of the Social Security Act (Act),
regulations, Quality Control Manual (QCM), and the
Nebraska State Plan
to permit the period of ineligibility
due to the receipt of a lump sum
payment to be
recalculated only under limited circumstances.
Specifically, Section 402(a)(17) of the Act, section 3551
of the QCM, and
Attachment 2.3-G of the Nebraska State
Plan all contemplate that the period
of ineligibility may
be recalculated if the lump sum becomes unavailable to
the family for reasons beyond the family's control. The
relevant
portion of the QCM states that occurrences such
as loss or theft of the
income, or a life-threatening
circumstance would satisfy the definition of
"beyond the
family's control." The Nebraska State Plan specifies
that the following circumstances are considered "beyond
the control of
the family":
Expenditures made which are necessary for the well
being of the
family such as necessary repairs to a
home; severe heating or cooling bills;
payments to
prevent eviction; costs associated with fire, flood,
or
natural disaster, etc; theft or loss; the person
controlling the lump sum no
longer resides with the
family; funeral and burial expenses; payments made
on medical services for the former eligible group or
their dependents
even though incurred before the
period of ineligibility, etc.
Nebraska State Plan, Attachment 2.3-G at 2.
The Nebraska Department of Social Services Manual repeats
the provisions
of the State Plan, but provides further:
"Expenditures for such things as
household goods,
vehicles, or payment of secured or unsecured debts are
acceptable reasons to recalculate [the period of
ineligibility]."
Nebraska Dept. of Social Services
Manual, section 2-009.05F.
Analysis
Nebraska argued that its State Plan and State Manual
support its
determination that the expenditures listed
above were incurred for reasons
beyond the control of the
family and thus could properly be deducted from
the lump
sum in calculating the period of ineligibility for M.G.'s
family. Based on the deductions allowed by Nebraska, the
State
calculated that the AU was ineligible for AFDC
assistance for the months of
December 1991, January and
February, 1992. According to Nebraska's
calculation,
there was no income remaining to be applied to the March,
1992 review month. Therefore, the AU was properly paid
the full
grant amount of $435.
Nebraska raised essentially the same arguments in this
proceeding as it
presented to the Panel in its earlier
unsuccessful appeal of this
issue. In summary, Nebraska
argued that the specific circumstances
listed as beyond
the control of the family in its State Plan did not
represent an exhaustive list. Rather, the State argued,
the State
Plan permits caseworkers and State QC to
determine, on an item by item
basis, whether an
expenditure is beyond the control of the family, but is
nevertheless necessary to the well-being of the family.
As was
fully explained in our earlier decision, we do not
agree with Nebraska's
broad interpretation of its State
Plan regarding expenditures which are
beyond the control
of the family.
As it did in the previous case, Nebraska contended that
M.G.'s payment of
rent was deductible because it was a
payment to prevent eviction.
Nebraska also asserted, but
did not document, that utility payments were
deductible
due to severe weather. For the reasons articulated in
our previous decision, these expenditures were not the
type of
extraordinary expenses contemplated by section
402(a)(17) of the Act or by
the State Plan. For this
reason, we conclude that Nebraska's State
Plan does not
support recalculation of M.G.'s ineligibility based on
these expenditures.
In the present case, Nebraska additionally contended that
section
2-009.05F of its State Manual authorized
recalculation of M.G.'s period of
ineligibility. The
applicability of the State Manual was not an issue
in our
earlier decision. See DAB QC23, at 4 n.2. Here,
Nebraska argued that the State Manual authorized the
deduction of
expenditures for the purchase of a car and
for clothing for M.G. and her
family from her lump sum
award. However, to the extent that the State
Manual
authorizes recalculation of an AU's period of
ineligibility after
receipt of a lump sum based on
expenditures for discretionary or basic need
items, we
conclude the provision is inconsistent with the State
Plan and
therefore does not represent a permissible State
practice. See QCM,
section 3130.
In its letter sustaining the federal QC finding of
ineligibility, ACF
concluded that section 2-009.05F of
the State Manual was not in conformity
with the State
Plan. As noted above, the State Manual permits
recalculation of the period of ineligibility based on
expenditures for
household goods, vehicles, and repayment
of secured or unsecured
debts. ACF stated that the State
Manual provision impermissibly
expanded the State Plan
definition of expenditures which are beyond the
control
of the family by permitting deductions from the lump sum
for
items that are clearly within the family's control.
We agree. The language of section 402(a)(17) of the Act
permits
recalculation of the period of ineligibility only
in the rare instances
where a lump sum has become
unavailable to a family due to extraordinary
circumstances beyond the family's control. DAB QC23, at
5.
At a minimum, this means that some external factor,
over which the family
had no control, necessitated the
expenditure of lump sum funds. Events
described in the
State Plan, such as damage to the family home requiring
repairs; severe heating or cooling bills (presumably
occasioned by
unusual weather conditions); payments to
prevent eviction; costs associated
with fire, flood, or
natural disaster; theft or loss; or funeral and burial
expenses, all meet this definition.
By contrast, the purchase of a vehicle, while it may be
beneficial to the
family, is an expenditure over which
the family has control. The
family chooses whether and
when to purchase a vehicle. Therefore, the
provision of
the State Manual permitting recalculation of the period
of
ineligibility due to purchase of a vehicle is
inconsistent with the State
Plan. The State may not rely
on that provision to justify deducting
from M.G.'s lump
sum income the amount she spent to purchase a car.
The State Manual also permits recalculation of the period
of
ineligibility due to expenditures for household goods.
However,
Nebraska uses a consolidated need standard,
which includes such items as
clothing, furniture, and
appliances, in determining AFDC eligibility.
Thus, the
family's need to purchase clothing, furniture, and
appliances
is factored into the AFDC grant amount.
Therefore, purchase of such
items cannot be considered an
extraordinary circumstance beyond the family's
control.
Accordingly, the State Manual provision permitting
expenditures for household goods to be deducted from
lump sum
income is inconsistent with the State Plan and
Nebraska may not rely on that
provision to justify
deducting from M.G.'s lump sum the amount she spent on
clothing.
Conclusion
For the foregoing reasons, we conclude that the
expenditures made by the
AU were not deductible from the
lump sum payment so as to shorten the AU's
period of
ineligibility. Therefore, we sustain ACF's finding that
the AU was totally ineligible for AFDC assistance from
December, 1991 to
May, 1992.
_____________________________
Andrea
M. Selzer
_____________________________
Maxine
Winerman
_____________________________
Leslie
A. Weyn
* * * Footnotes * * *
* We identify the recipient by her initials in
order to protect her privacy. The State quality control
review
number is 39695 (N-082).
(..continued)