Department of Health and Human Services
Departmental Appeals Board
AFDC QUALITY CONTROL REVIEW PANEL
SUBJECT: Massachusetts
Department of
Public Welfare
Docket No. A-94-187
Decision No. QC74
DATE: December 21, 1994
DECISION
The Massachusetts Department of Public Welfare
(Massachusetts) appealed a
July 14, 1994 quality control
(QC) determination by the Regional
Administrator of the
Administration for Children and Families (ACF).
ACF
determined that the Massachusetts had erred when it found
that an
assistance unit (AU) of an Aid to Families with
Dependent Children (AFDC)
grant had been overpaid $65.
ACF determined that the AU was actually
ineligible for
AFDC assistance and had been overpaid $157. ACF found
that Social Security benefits received by a spouse of a
member of the AU
should have been deemed to the member,
thereby causing the AU to exceed the
financial
eligibility requirements for an AFDC grant.
For the reasons discussed below, we find that ACF was
correct in its
determination that the AU was ineligible
for an AFDC grant.
Relevant Legal Authority
Section 408 of the Social Security Act (Act) established
the QC review
process to improve the accuracy of AFDC
payments made to needy families with
dependent children.
See section 402(a)(7) of the Act. The QC
review process
provides for review of a sample of AFDC cases by each
state, and for re-review of a sub-sample of these cases
by federal
reviewers. The AFDC QC review panel resolves
"difference" cases,
defined as disagreements between
state and federal review findings that
affect a state's
official AFDC payment error rate. ACF has issued
policies and procedures governing the QC review process
in the Quality
Control Manual (QCM) under which the
states are required to operate.
45 C.F.R. �
205.40(b)(1).
Section 402(a)(7) of the Act requires that states, in
calculating eligibility for and the amount of AFDC
assistance:
take into consideration any other income and
resources of any
child or relative claiming
[AFDC] . . . .
Further, 45 C.F.R. � 233.20(a)(3)(ii) provides that all
income, after all
policies governing the reserves and
allowances and disregards or set asides
of income and
resources have been uniformly applied, shall be
considered
in determining need and the amount of
assistance payment. The QCM
explicitly provides, "Income
received by any member of the AU is considered
available
to the entire unit." Section 3551.
Factual Background
In the review month of September 1993, the AU consisted
of a grandmother
and a child. The primary member of the
AU was the child, with the
grandmother having elected to
be part of the AU as an optional member.
The child
received monthly Social Security benefits of $450.
Between the time the AU qualified for AFDC and the review
month, the
grandmother's spouse, the child's step-
grandfather, began receiving Social
Security benefits.
During the review month, the grandmother's spouse
received monthly Social Security benefits of $465.
The Massachusetts state QC review determined that, once
the grandmother's
spouse had started to receive Social
Security benefits, the grandmother was
no longer
eligible. It eliminated the grandmother from the AU and
recalculated the child's eligibility. It determined that
the child
remained eligible and that the amount of the
overpayment was $65.
The federal QC review found the grandmother and the step-
grandfather
members of the filing unit, with the
grandmother an optional member of the
AU included in the
AFDC grant. The federal QC review concluded that
since
the grandmother was included, income from the step-
grandfather was
deemed available to her. Under the
computations for a grant the size
of the AU, the federal
QC review determined that the combination of the
child's
and the step-grandfather's Social Security benefits
exceeded the
grant amount for two with special allowances
included.
Discussion
Massachusetts did not dispute that the step-grandfather's
income in the
form of Social Security benefits was
deemable to his wife under AFDC
budgeting rules. Rather,
Massachusetts argued that the grandfather's
deemed income
applies only to his spouse and not to the child since the
grandmother was an optional member of the AU and the
grandparents had no
legal financial liability toward the
child. According to
Massachusetts, the situation
presented by this appeal should be considered a
"paper
error" which did not cost either itself or AFDC any
money.
Massachusetts asserted that if the grandmother
had reported a change of
income for herself in a previous
month, Massachusetts would have
redetermined the
eligibility of the child. Since the grandparents had
no
financial legal responsibility to the child,
Massachusetts reasoned,
the child alone would continue to
be eligible for AFDC assistance, while the
grandmother
would no longer be eligible as her spouse's income
affected
her eligibility. Massachusetts likened the
situation of this appeal to
the Medicaid and Food Stamp
programs which, according to Massachusetts, have
an
eligible member concept rather than a household concept
of
eligibility.
Massachusetts also argued that it would be highly
unlikely in a court of
law that it would be able to
recoup anything over and above the $65 that its
state QC
review had detected. Massachusetts further argued that
there was no proof that the grandmother was aware of the
benefits or
drawbacks of being included in the AU as her
husband had no deemable income
when the AFDC case was
opened.
The arguments advanced by
Massachusetts are not
persuasive. First, irrespective of any legal
financial
responsibility she may have had toward her granddaughter,
the
grandmother elected to be part of the AU. Legal
financial
responsibility for a dependent child is not a
requirement for the caretaking
relative to be considered
part of the AU; the Act lists such relationships
as
grandparent and "first cousin, nephew or niece," who
under the law
would have no financial responsibility for
the child, as relatives
qualifying for AFDC assistance by
reasons of having a dependent child in the
household.
Section 406(a) of the Act. Once she became a member
of
the AU, the grandmother became bound by all the
provisions of the
Act, the regulations, and the QCM
regarding resources available to the AU.
It is an incontrovertible fact that in the review month
the AU consisted
of the grandmother and the child. What
occurred here is that in the
period between when the
eligibility of the AU was determined and the review
month
a change of circumstances occurred: the grandmother's
spouse
began receiving Social Security benefits. While
Massachusetts never
explained what it meant by a "paper
error," this does not appear to be
one: this AU received
an AFDC grant when it was actually, based on the
combined
resources of the members of the AU, ineligible for any
AFDC
assistance.
Massachusetts has not presented any basis for its
position that it should
be allowed to redefine the
assistance unit to eliminate the
grandmother. Had it
presented evidence of permissible state practices
concerning mitigation of overpayments or how optional
members of AU are
treated if their income causes the AU
to become ineligible, then we would
have to considered
whether such permissible state practices would have
permitted a different result here. See Wisconsin Dept.
of Health
and Social Services, DAB QC4 (1991). Absent
such evidence, the
determination of ineligibility must
focus on the particular AU that received
the AFDC
payment, not on whether another possible AU could have
been
eligible. Connecticut Dept. of Income Maintenance,
DAB QC26, at 2-3
(1992). Additionally, Massachusetts has
not shown how its unsupported
assertion that it could
determine the child's eligibility individually in
Food
Stamp or Medicaid QC is relevant to the AFDC QC process.
Therefore, for AFDC QC review purposes, the AU here
still
consisted of the grandmother and the child.
Furthermore, the fact that Massachusetts might not be
able to recoup the
excess payments in a court of law is
not relevant here. Massachusetts
identified no provision
in the regulations or the QCM that limits the amount
of
an error to what can actually be recouped by a state.
Finally, Massachusetts failed to demonstrate why proof
that the
grandmother was made aware of the implications
of her election to be a
member of the AU is relevant to
this case. Once again, the issue is
what were the actual
circumstances of the AU during the review month, and
not
what a member of the AU might or might not have done if
she had
known all the particularities of the AFDC
program.
What cannot be overlooked is that the AU had combined
income in the
review month that exceeded the eligibility
limit for participation in the
AFDC program. The
conjectures offered by Massachusetts cannot refute
this
basic fact. Accordingly, we sustain ACF's determination.
Conclusion
For the reasons discussed above, we find that ACF
correctly determined
that the AU was ineligible for an
AFDC grant.
_____________________________
Sara B. Anderson
_____________________________
Thomas D. Horvath
_____________________________
Gilda Breidenbach Morrison