OGDON v. WORKMEN COMPENSATION APPEALS BOARD

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Court of Appeal, Fourth District, Division 2, California.

Donald R. OGDON, Petitioner, v. WORKMEN'S COMPENSATION APPEALS BOARD et al., Respondents.

Civ. 12026.

Decided: February 01, 1973

Thompson, Talbott & Lemaster and George D. Thompson, Pomona, for petitioner. Franklin Grady, San Francisco, for respondent Workmen's Compensation Appeals Board. Stanford D. Herlick, County Counsel, San Bernardino, for respondent County of San Bernardino. Rushing, Clark & Haight and Albert G. Clark, Jr., Modesto, amicus curiae for The California Applicants Attys. Assn.

Petitioner (Applicant) seeks review of a decision after reconsideration of the Workmen's Compensation Appeals Board (Board).

Material Facts

The procedural history of the case is quite complex, but because of the narrow, though significant, issue presented, many of the complexities may be eliminated for purposes of this decision. Applicant allegedly sustained three successive industrial injuries while working for the same employer. Each injury was the subject of an application for adjudication of claim. Insurance coverage was provided by several different carriers at the several times involved. Voluntarily and by order of the Board, temporary total workmen's compensation disability benefits were paid Applicant through August 12, 1970.

In May 1970, Applicant went off work and had not returned to work at the time of the latest proceedings below. On August 27, 1970, Applicant filed a fourth application for adjudication of claim, alleging cumulative injury during the period May 25, 1964 to February 10, 1970. He sought further temporary disability benefits, permanent disability benefits, medical treatment and reimbursement for medical expenses. He alleged that his earnings were maximum for industrial injury benefits.1

At the time of the proceedings below, Applicant had four dependents, his wife and three minor children his disability and entitlement to further workmen's compensation temporary disability benefits being in dispute, payment of such benefits by the employer's insurance carrier were terminated August 12, 1970. Applicant applied to the County of San Bernardino for public assistance. Pursuant to said application, commencing in September 1970 and continuously thereafter until mid-June 1971, Applicant received public assistance under the provisions of part 3 of division 9 of the Welfare and Institutions Code (§ 11000 et seq.), more particularly under the provisions dealing with Aid to Families with Dependent Children (§ 11200 et seq.) (hereinafter AFDC), and specifically under Welfare and Institutions Code, section 11250(a).2 Except for the month of June 1971, during which a partial payment was made, cash benefits were paid to Applicant by warrants payable to him at the rate of $239 per month. The total amount paid was $2,313.50. Had Applicant been absent from the home, his family would have been entitled to benefits at the rate of $221 per month. Payment of AFDC benefits was terminated in June 1971 because Applicant ‘received a fund of money from other sources.'3

On or about May 5, 1971, the San Bernardino County Welfare Department filed an amended claim of lien on account of the AFDC benefits provided Applicant and his dependents in the amount of $2,031.50.4 Following the original order approving the compromise and release in which the sum of $2,031.50 was ordered withheld pending determination of the propriety and validity of the lien claim of the San Bernardino County Welfare Department, a further hearing was had on the lien claim on July 21, 1971, which, after submission of points and authorities, resulted in an order by the referee on December 14, 1971 that the lien be allowed in the amount of $950. This order was subsequently amended by an order dated January 4, 1972 to correct a clerical error.

It was conceded that the full amount claimed had been paid to and expended by Applicant's family as living expenses (see Lab.Code, § 4903(c)), but the referee, while recognizing some pertinent differences between AFDC and unemployment compensation disability (UCD) benefits, treated the lien claim of the San Bernardino County Welfare Department similarly to a lien claim for UCD benefits and allowed only a portion of the lien claim of the San Bernardino County Welfare Department utilizing the so-called ‘Baird’ formula (see Lab.Code, §§ 4903(f), 4903(g), 4904; California-Western States Life Ins. Co. v. Industrial Acc. Com., 59 Cal.2d 257, 260–261, 28 Cal.Rptr. 872, 379 P.2d 328). San Bernardino County petitioned for reconsideration contending that its lien claim should have been allowed in full. Applicant answered contending that the apportionment of the lien in accordance with the ‘Baird’ formula was proper, but also himself petitioned for reconsideration contending that the lien claim was totally invalid and should not have been allowed in any amount. The Board granted reconsideration and on February 29, 1972 rendered an opinion, decision and order allowing the lien of the San Bernardino County Welfare Department in full ($2,031.50).

Applicant's petition for review was originally denied without opinion by this court. The California Supreme Court, however, granted hearing and directed that a Writ of Review issue. Accordingly, we issued the writ.

Contentions, Issues and Disposition

In this opinion we shall have occasion to refer to statutory provisions contained in the Civil Code and Welfare and Institutions Code, and we are immediately thereby presented with a problem. In the 1971 session, the Legislature enacted the Welfare Reform Act of 1971 (Stats.1971, ch. 578) repealing and amending certain statutory provisions and adding others. The act was enacted as urgency legislation and, thus, became effective August 13, 1971, but the operative date of the provisions with which we might be concerned (e. g., Civ.Code, § 248; Welf. & Inst. Code, §§ 11004, 11008, 11020, 11155, 11157, 11267) was fixed as October 1, 1971. (Stats.1971, ch. 578, §§ 42, 43.) The question is whether those provisions of the Welfare Reform Act of 1971 that became operative October 1, 1971 are applicable to the matter under review. We have concluded that they are. It is the law at the time of judgment that is controlling. (Addison v. Addison, 62 Cal.2d 558, 569, 43 Cal.Rptr. 97, 399 P.2d 897; In re Marriage of Walton, 28 Cal.App.3d 108, 114, 104 Cal.Rptr. 472; In re Marriage of Silvers, 23 Cal.App.3d 910, 911, 100 Cal.Rptr. 731.) The order of the referee of which reconsideration was sought was made December 14, 1971 and subsequently amended on January 4, 1972 to correct a clerical error. The final decision of the Board under review was rendered February 29, 1972. Both the order of the referee and that of the Board were, thus, rendered subsequent to the operative date of those provisions of the Welfare Reform Act of 1971 with which we might be concerned. As will hereinafter appear, our decision on this point does not substantially affect the decision reached, but the Welfare Reform Act of 1971 and some of its provisions do bear upon the case and, in any event, it is necessary to make clear that our reference to provisions found in the Welfare and Institutions Code and Civil Code refer to the sections as they exist following enactment of that act.

Pointing out that it was admitted that it paid at least $2,031.50 to Applicant for living expenses of himself and his dependents subsequent to his claimed injury, the County contends that the Board's allowance of its lien is authorized and, indeed, mandated by section 4903(c) of the Labor Code which provides for a lien against ‘any sum to be paid as compensation’ for ‘[t]he reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury.’ In addition, County cites several cases lending support to its position in which liens were allowed under Labor Code, section 4903 for the recoupment by the paying agency of welfare benefits paid an injured workman for the living expenses of himself or of his dependents subsequent to his injury and prior to adjudication of his workmen's compensation claim. (E. g., County of Contra Costa v. Industrial Acc. Com. [Wilkerson], 212 Cal.App.2d 585, 28 Cal.Rptr. 303; Hemming v. Industrial Acc. Com., 13 Cal. Comp.Cases 23 [writ denied February 25, 1948]; Lugo v. Workmen's Comp. App. Bd., 31 Cal.Comp.Cases, 273 [writ denied August 18, 1966; hearing denied September 14, 1966].)5

Applicant attacks on a broad front. Starting with the proposition that at common law, in the absence of fraud in procuring relief, a recipient of charity from the state was under no obligation to make repayment (see County of Alameda v. Janssen, 16 Cal.2d 276, 283, 106 P.2d 11; County of L. A. v. Security First Nat. Bank, 84 Cal.App.2d 575, 578, 191 P.2d 78; see also 23 Ops.Cal.Atty.Gen. 296 ), he contends that no recoupment of AFDC benefits properly paid is contemplated by the federal or state statutes or regulations pertaining thereto and that, therefore, the lien provisions of Labor Code, section 4903(c) do not apply.

Thus Applicant distinguishes the Hemming and Wilkerson cases, supra. Hemming involved a lien claim under Labor Code, section 4903(c) by the County of Los Angeles for indigent aid provided by it. The statutory provisions governing indigent aid, however, clearly provide for recoupment. (See Welf & Inst.Code, §§ 17109, 17401, 17403 [formerly §§ 2600–2603].) Although the Wilkerson opinion does not make clear the precise nature of the welfare benefits that had been provided, indigent aid is mentioned and the Hemming case cited as authority. (212 Cal.App.2d at p. 586, 28 Cal.Rptr. 303.) In any event, in the Wilkerson case it was not contested, but conceded, that the welfare benefits furnished provided a basis for recoupment by lien. (212 Cal.App.2d at p. 586, 28 Cal.Rptr. 303.)

Applicant's attempt to distinguish Lugo, supra, is not as successful. In Lugo, the Department of Social Welfare was allowed a lien to recoup welfare benefits provided the injured workman under the partially federally financed Community Work and Training Program. There is no indication in the report of the decision whether or not the statutes or regulations relating to the program expressly provided for such recoupment, and Applicant does not assert the existence of any such provision for recoupment. He contents himself with the observation that the welfare program there involved was different than the one here involved. It is true as Applicant observes that in Lugo, although the award included both temporary and permanent disability indemnity, the Welfare Department's lien was granted against only the temporary disability award. (31 Cal.Comp.Cases at pp. 274–275.) This point is not expressly discussed in the report of the decision, and, therefore, its significance in the case and whether or not it was actually litigated cannot be ascertained. (See Bryant v. Industrial Acc. Com., 37 Cal.2d 215, 223, 231 P.2d 32, rejecting a distinction between temporary and permanent disability benefits for lien purposes.)

There is much to be said in favor of the broad proposition advanced by Applicant that, generally, the recipient of AFDC benefits properly paid is under no obligation to repay the same. In the first place, it is the purpose of the AFDC program as well as many other coordinate welfare programs, ultimately, to reduce dependency, to provide incentive for self support and to assist recipients in becoming productive and self-supporting members of society. (See e. g., 42 U.S.C. § 601; Welf. & Inst. Code, §§ 10650, 10651, 11008, 11205, 11207.) A general rule that a recipient of AFDC properly paid is obliged to make repayment, particularly out of future earnings, might well be counter-productive and contrary to the purposes of the welfare scheme. (See Graham, ‘Public Assistance: The Right to Receive; The Obligation to Repay,’ 43 N.Y.U.L.Rev. 451, 475–496.)

The intent of the Legislature concerning the answer to the broad question posed by Applicant is far from certain, and the answer to that question is a matter to which the Legislature might well address its attention. Applicant concedes that various of the statutory provisions found in the Welfare and Institutions Code appear to be not entirely consistent and further concedes that, despite diligent search, he has found nothing in the federal statutes or regulations prohibiting recoupment or reimbursement of AFDC benefits.7 He calls our attention, however, to Welfare and Institutions Code, section 11007 which in part provides: ‘Aid granted to a recipient of public assistance shall not constitute a lien upon any property of the recipient.’ ‘Public assistance’ refers to those public social service programs provided for in part 3 of division 9 (§§ 11000–15520) of the Welfare and Institutions Code; (Welf. & Inst.Code, § 10061.) The terms ‘property’ and ‘recipient’ as used in section 11007 do not appear to be defined in the Code. The concept of property as utilized in determining eligibility, however, (see e. g., Welf. & Inst.Code, §§ 11155, 11255, 11257, 11259, 11260, cf. 11157) greatly differs from the concept of property at common law, and County urges with considerable persuasion that the term ‘property’ as used in section 11007 should be construed to refer to that property an applicant or recipient may retain and still be eligible for assistance.8

Applicant also asserts that the provisions of Welfare and Institutions Code he deems applicable to the AFDC program provide specifically for reimbursement or recoupment only when benefits were provided as the result of fraud (Welf. & Inst.Code, § 11483), by mistake (Welf. & Inst.Code, §§ 11004, 11020) or in the case of an absent parent who has assets or means sufficient for the support of his needy family (Welf. & Inst. Code, § 11350). The absence of statutory provisions for the general recoupment or reimbursement of AFDC benefits properly paid, except as heretofore noted, takes on added significance, Applicant argues, in view of the fact that the provisions contained in part 5 of division 9 of the Welfare and Institutions Code (§ 17000 et seq.) relating to county aid and relief to indigents do contain specific provisions for recoupment and reimbursement (e. g., Welf. & Inst.Code, §§ 17109, 17401, 17403). (Cf. 23 Ops.Cal.Atty.Gen., supra, at p. 31.)

We are not so certain as is Applicant that none of the provisions found in part 5 of division 9 of the Welfare and Institutions Code (dealing generally with indigent aid) are applicable to the AFDC program provided for by part 3 of the same division. We note that section 17401 dealing with certain lien rights provides in pertinent part: ‘In no way do the authorizations and limitations expressed in this section enlarge upon the power of counties to take or impose liens under existing law. Nothing contained in this section shall be construed to permit a county to impose a lien for aid or other assistance granted under any public assistance program established by this code for which federal funds are received by this state . . ..’ (Emphasis supplied.) If none of the provisions contained in part 5 of division 9 apply to other programs provided for in other parts of the same division, there would be no need for the foregoing italicized language in section 17401. It would be unnecessary and meaningless. On the other hand, we do not decide this matter, and our decision does not rest in whole or in part upon any provision in part 5 of division 9 of the Welfare and Institutions Code.

Additionally, Applicant's argument takes no account of the provisions of the Uniform Civil Liability for Support Act (Civ. Code, § 241 et seq.) enacted in 1955 (Stats.1955, ch. 835). Civil Code, section 248 provides in pertinent part: ‘Whenever the county furnishes support to an obligee [dependent wife or child entitled to support (see Civ.Code, § 242)], it has the same right as the obligee to whom the support was furnished, for the purpose of securing reimbursement and of obtaining continuing support. The right of the county to reimbursement shall be subject to any limitation otherwise imposed by the law of this state.’ (Emphasis supplied.) If it was not already so, it is now apparent that the Civil Code sections relating to parental responsibility for support, including section 248, constitute a part of a comprehensive welfare scheme. (See Welfare Reform Act of 1971 [Stats.1971, ch. 578, §§ 3 and 3.3].) While we do not decide nor hold herein that Civil Code, section 248 constitutes a general reimbursement or recoupment section applicable to all AFDC cases, we do note that within certain limitations (see Civ.Code, § 246) it is arguably susceptible to such an interpretation, and we have little doubt that it may be used for recoupment of AFDC benefits in some cases. We reject the notion that, because section 248 speaks of reimbursement of support furnished by a ‘county,’ its applicability is limited to county indigent aid. Administration of the AFDC program at the local level and payment of AFDC benefits is expressly made a function of the ‘county’ notwithstanding that the funds paid come in part from the state and federal governments as well as the county. (Welf. & Inst.Code, §§ 10800, 11207; see also fn. 7, ante.) Nor does the existence of Welfare and Institutions Code, section 11350 providing for recoupment from a separated or deserting spouse necessarily negate application of Civil Code, section 248 to AFDC cases, for section 11350 is by its terms limited to cases of an absent or deserting spouse, while Civil Code, section 248 is broader in scope.9

Although various of the social welfare programs now found in division 9 of the Welfare and Institutions Code and other statutory enactments relating thereto were previously enacted separately and on a piecemeal basis, it appears to us that in 1965 (see Stats.1965, ch. 1784) and 1971 (see Welfare Reform Act of 1971 [Stats. 1971, ch. 578]) the Legislature attempted to enact a comprehensive integrated welfare scheme. While the statutory scheme is exceedingly complex and while we freely admit we should have great difficulty reconciling many of the apparently conflicting provisions had we to do so, the general rule would prevail that all portions of the relevant legislative enactments are to be read and construed together to achieve harmony and to give effect to the legislative intent (Weymss v. Superior Court, 38 Cal.2d 616, 621, 238 P.2d 562; Estate of Stevens, 27 Cal.2d 108, 119, 162 P.2d 918) in accordance with the tenor of the entire scheme embodied in the enactments (County of Los Angeles v. Frisbie, 19 Cal.2d 634, 639, 122 P.2d 526; California Comp. Ins. Co. v. Ind. Acc. Com., 128 Cal.App.2d 797, 806, 276 P.2d 148, 277 P.2d 442). Moreover, any such statutory reconciliation would require also consideration and integration of the social welfare program embodied in the workmen's compensation statutes. (See California Comp. Ins. Co v. Ind. Acc. Com., supra.)

Whatever else may be said of the statutory welfare scheme, except as to property which may be ‘retained’ (e. g., Welf. & Inst.Code, §§ 11155, 11158, 11255, 11257, 11260) and certain ‘excluded’ income (e. g., Welf. & Inst.Code, §§ 11008–11012, 11018), it is clear that the primary obligation for support of needy families is to be discharged from the resources and income of the parents. (E. g., Welf. & Inst.Code, §§ 11207, 11012; Civ.Code, §§ 242, 248, 5127.5.) We also note that the comprehensive welfare program is to be administered both ‘with due consideration for the needs of applicants and the safeguarding of public funds.’ (Welf. & Inst.Code, § 11004; emphasis supplied.)

Happily, we have concluded that we are not required in this case to decide the broad question posed by Applicant, the general right of a county to recoupment of or reimbursement for AFDC benefits properly paid. The question actually presented is much narrower. May a county recoup out of workmen's compensation benefits subsequently recovered by an injured workman the amount of AFDC cash benefits paid the injured workman for the living expenses of him and his family when the eligibility for AFDC was based upon the very injury for which, ultimately, the workmen's compensation benefits were recovered? The answer to this question, in turn, depends upon whether the Legislature intended an industrially injured workman to receive and retain both the disability benefits provided by the workmen's compensation laws and public assistance benefits in the form of AFDC when both entitlements result from the same disability.

County argues that to permit Applicant to receive and retain workmen's compensation disability benefits and AFDC benefits based on the same disability would countenance a prohibited ‘double recovery.’ (Cf. Symington v. City of Albany, 5 Cal.3d 23, 26, 32, 95 Cal.Rptr. 206, 485 P.2d 270; Brown v. Superior Court, 3 Cal.3d 427, 433, 90 Cal.Rptr. 737, 476 P.2d 105; Witt v. Jackson, 57 Cal.2d 57, 73, 17 Cal.Rptr. 369, 366 P.2d 641; Corley v. Workmen's Comp. Appeals Bd., 22 Cal.App.3d 447, 453, 99 Cal.Rptr. 242.) This argument, however, begs the question. It is not every multiple recovery of benefits that is proscribed. Multiple recovery of benefits from a collateral source is permitted. (Lab.Code, § 3752; DeCruz v. Reid, 69 Cal.2d 217, 223–226, 70 Cal.Rptr. 550, 444 P.2d 342; cf. City of Los Angeles v. Industrial Acc. Com., 63 Cal.2d 242, 253, 46 Cal.Rptr. 97, 404 P.2d 801.) If the Legislature intended an injured workman to receive and retain both workmen's compensation benefits and AFDC benefits, the welfare benefits would, in our view, constitute benefits from a collateral source within the meaning of the cited cases.

On the other hand, Applicant's reliance upon Labor Code, section 3752 as establishing a legislative intent that an injured workman receive and retain both workmen's compensation benefits and public assistance under the AFDC program is entirely misplaced. The section provides: ‘Liability for compensation shall not be reduced or affected by any insurance, contribution or other benefit whatsoever due to or received by the person entitled to such compensation, except as otherwise provided by this division.’ (Emphasis supplied.) The history and purpose of this section were fully treated in California Comp. Ins. Co. v. Ind. Acc. Com., supra, 128 Cal.App.2d at pp. 810–811, 276 P.2d 148, 277 P.2d 442 in a context not unlike that in the case at bench, and, as there indicated, it was not intended to resolve the problem before us. The language of section 3752, as well as the code sections preceding and following it, indicates a concern with the problem of liability for compensation as between the injured employee and his employer and the employer's insurance carrier. In no event would the allowance of the lien of the San Bernardino County Welfare Department in the case at bench reduce the liability for compensation of Applicant's employer or his employer's insurance carrier.

There are two cogent, interrelated reasons that compel us to the conclusion that the Legislature did not intend an injured workman to receive and retain both workmen's compensation disability payments and cash benefits under the AFDC program when eligibility for benefits under both programs results from the same injury. The first is found in the theory underlying and the purpose of the workmen's compensation law. The fundamental theory upon which workmen's compensation laws are based is that the economic costs of industrial injuries should be borne by the industry out of which they arise and, ultimately, through mandatory insurance, by the consumers of the goods or services produced by that industry rather than the taxpaying public generally. (Union Iron Wks. v. Industrial Acc. Com., 190 Cal. 33, 39, 210 P. 410; Edson v. Industrial Acc. Com., 206 Cal. 134, 137, 273 P. 572; West v. Industrial Acc. Com., 79 Cal.App.2d 711, 721, 180 P.2d 972; 2 Hanna, California Law of Employee Injuries and Workmen's Compensation (2d ed.) § 1.05 [2], pp. 1–26–1–27; Herlick, California Workmen's Compensation Law Handbook (1970) § 1.1., p. 15; 1 Larson, Workmen's Compensation Law § 2.20, pp. 5–7.) The disallowance of the county's lien for recoupment of AFDC benefits furnished pending determination of Applicant's entitlement to workmen's compensation benefits would place on the general taxpaying public a substantial portion of the burden of the economic costs of Applicant's industrial injury. In view of the clear and express language of Labor Code, section 4903(c) authorizing a lien against workmen's compensation for ‘[t]he reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury,’ and in the absence of a clear and express indication by the Legislature that such lien provision is not to apply to the reasonable value of the living expenses of an injured employee or of his dependents furnished through the AFDC program, we cannot impute to the Legislature an intention so contrary to the fundamental theory and philosophy underlying the workmen's compensation laws.10

Secondly, although certain social insurance benefits received by an applicant for AFDC are not treated as income for determining eligibility (see Welf. & Inst. Code, §§ 11008–11010; California-SDSW Manual-EAS, §§ 44–111, 44–111.3–44.111.434) such is not the case with workmen's compensation disability payments. If an industrially injured workman is currently receiving workmen's compensation disability payments, such payments are treated as available income in determining eligibility for AFDC cash benefits and may make the applicant ineligible for such benefits or, if such payments are less in amount than the AFDC entitlement, are deducted from the AFDC cash benefits to be paid. (See 42 U.S.C. § 602, subd. (a)(7)11 ; California-SDWS Manual-EAS, §§ 44–101, 44–103.12, 44–103.212, 44–103.32; cf. Welf. & Inst. Code, § 11157.12

Thus, it is clear that the Legislature did not intend that an industrially injured workman have both workmen's compensation benefits and AFDC cash benefits and we see no reason why Labor Code, section 4903(c) authorizing a lien against workmen's compensation for living expenses furnished an employee or his dependents should be held inapplicable because such living expenses were furnished through the AFDC program. Indeed, both equity and sound administration of both the AFDC and workmen's compensation programs require allowance of the statutorily authorized lien.

When a workman is disabled by an industrial injury, but, because of a dispute as to the industrial cause or the nature, extent and duration of his disability, he is not currently receiving workmen's compensation disability payments, payment of benefits under the AFDC program is appropriate under the California plan if other conditions of eligibility exist. (See Welf. & Inst.Code, § 11250(a), supra [fn. 2, ante].) In view of the fact that workmen's compensation disability payments being currently received, however, are taken into consideration in determining eligibility and may result in ineligibility for cash benefits or reduction of the amount of such benefits to be paid, it would be both inconsistent and improvident to hold that AFDC payments made as a result of the nonpayment of workmen's compensation disability benefits cannot be recouped out of such workmen's compensation benefits when the same are subsequently realized. At best, such a rule would make eligibility for AFDC benefits and the attendant burden on the taxpayer dependent upon the will of the employer or the employer's workmen's compensation insurance carrier. At worst, it would permit a clever welfare practitioner to delay in pursuing his workmen's compensation remedies, thereby establishing eligibility for and receiving AFDC cash benefits and thereafter recovering workmen's compensation benefits free of any obligation for reimbursement of the AFDC benefits received. Sound administration of these social welfare programs requires that rule of law be avoided that permit or encourage unwarranted manipulation. (See Corley v. Workmen's Comp. Appeals Bd., supra, 22 Cal.App.3d at pp. 452, 456–457, 99 Cal.Rptr. 242.) If the current receipt of workmen's compensation disability payments may be considered so as to preclude eligibility for AFDC cash benefits or reduce the amount of such benefits payable in the first instance, equitable treatment of the families of all industrially injured workmen requires recoupment out of workmen's compensation benefits ultimately realized with respect to AFDC payments made as the result of the nonpayment on a current basis of workmen's compensation disability benefits to which it is subsequently determined the injured workman was entitled.13

The countervailing argument that allowance of County's lien will merely hasten the day when Applicant and his dependent children will again be forced to seek AFDC assistance and thereby result in uneconomical administration of the AFDC program is conjectural and fallacious. It assumes that Applicant will be unable to return to gainful employment, an assumption not warranted by the record. If Applicant is employable, arguably, allowance of the lien will impart to him a greater sense of urgency in seeking gainful employment. If he is in fact totally disabled and therefore unemployable, he will of course in any event require public assistance, but, in that event, he might be eligible for assistance under programs more specifically designed for such long-range disability such as the federal social security disability insurance program (42 U.S.C. § 423). In any event, even if Applicant or his dependents are eventually required to apply for additional benefits under the AFDC program, no greater expenditure of funds under that program will have occurred because of the allowance of County's lien.

Nothing we have said is in the least inconsistent with the rationale or decision of the United States Supreme Court in Philpott v. Essex County Welfare Board (decided January 10, 1973) 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608, reversing Essex County Welfare Board v. Philpott, 59 N.J. 75, 279 A.2d 806 (1971). In the Philpott case the welfare recipient had applied for and received welfare benefits under a disability program of the State of New Jersey. Subsequently, he received in a lump sum retroactive disability insurance benefits under the federal social security disability program (42 U.S.C. § 423). Thereupon, the state welfare agency attempted to recoup the amount paid under the state program out of the recipient's lump sum award under the federal program. An obstacle to such recoupment was the express statutory provision contained in 42 U.S.C. section 407 prohibiting assignment or transfer of payments received under the federal social security disability program and providing that such are not ‘subject to execution, levy, attachment, garnishment, or other legal process . . ..’

The decision of the New Jersey Supreme Court upholding recoupment by the state welfare agency was founded on two separate bases. First, noting that the recipient had, as a condition to obtaining state benefits, executed a reimbursement agreement and that had he been currently receiving benefits under the federal program the amount thereof would have been deducted from any entitlement under the state program, the court reasoned that in practical effect the payments under the state program were merely advances, to which the provisions of 42 U.S.C. section 407 should not be held applicable. (279 A.2d at pp. 810–811 [this basis of decision will be hereinafter referred to as the ‘advance’ theory].) Alternatively, the court relied on 42 U.S.C. section 404 which directs the federal authorities to require reimbursement in the event of overpayment under the federal social security disability program. (279 A.2d at p. 811 [this basis of decision will hereinafter be referred to as the ‘overpayment’ theory].)

In reversing, the United States Supreme Court rejected the ‘overpayment’ theory on the simple basis that there had been no overpayment of benefits under the federal social security disability program. (Philpott v. Essex County Welfare Board, supra, page —— of —— U.S., 93 S.Ct. 590.) There is no contention, of course, in the case at bench that there was any overpayment under the AFDC program, and our decision is not based in whole or in part upon any such theory. The ‘advance’ theory of the New Jersey Supreme Court, which does bear some resemblance to our ‘frontend—hindend’ rationale, was also rejected by the United States Supreme Court, but only because of the express prohibition against assignment and attachment of benefits paid under the federal program contained in 42 U.S.C. section 407, supra. (Philpott v. Essex County Welfare Board, supra, page ——, 93 S.Ct. 590.) We, of course, are not faced with any such statutory prohibition. On the contrary, Labor Code, section 4903(c) specifically authorizes a lien for recoupment of ‘[t]he reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury.'14 Thus, to the extent it is relevant at all, the Philpott decision actually supports the result we reach. It rejected the ‘advance’ theory only on the basis of a statutory prohibition absent in the case at bench. Further the court said: ‘We see no reason to base an implied exemption from § 407 [42 U.S.C.§ 407] on that ground [the ‘advance’ theory]. We see no reason why a State, performing its statutory duty to take care of the needy, should be in a preferred position as compared with any other creditor.' (Philpott v. Essex County Welfare Board, supra, page ——, 93 S.Ct. 590.) The result we reach does not place County in a preferred position. On the contrary, it places County in the same position as any other person or entity furnishing living expenses to an industrially injured employee or his dependents subsequent to his injury.

It remains to be considered whether the County's lien was correctly allowed in full or whether, as the referee thought proper, it should be reduced on the basis of the ‘Baird’ formula or some other basis. While we recognize that recoupment might equitably be limited to the amount by which the AFDC benefits would have been reduced had workmen's compensation disability payments been made on a current basis (see fn. 13, ante, and accompanying text), we have concluded that, under existing law, neither the Board nor we have power to allow the lien in less than the full amount and, further, that in any event, equity in the case at bench would not require any such apportionment.

We note at once that we are not dealing with a matter of the adjustment of compensation as between an employer and employee, in which case some equitable adjustment might be made by some crediting technique. (See Symington v. City of Albany, supra, 5 Cal.3d 23, 33–34, 95 Cal.Rptr. 206, 485 P.2d 270; City of Los Angeles v. Industrial Acc. Com., supra, 63 Cal.2d 242, 253–254, 46 Cal.Rptr. 97, 404 Cal.Rptr. 801.) Here we are involved with a claim of lien by a third party. The lien procedure is prescribed by statute. (Lab.Code, § 4903 et seq.) Labor Code, section 4903(c) provides for a lien for ‘[t]he reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury.’ Concededly, the full amount claimed was paid to and expended by Applicant for the living expenses of him and his dependents. Under these circumstances, save for prorating where the recovery is insufficient to cover all liens, the Board has no power to reduce the amount of the lien absent special statutory authorization. (Bryant v. Industrial Acc. Com., supra, 37 Cal.2d at pp. 220–221, 231 P.2d 32; County of Contra Costa v. Industrial Acc. Com. [Wilkerson], supra, 212 Cal.App.2d at p. 586, 28 Cal.Rptr. 438.) The lien applies to both temporary disability compensation and permanent disability compensation. (Bryant v. Industrial Acc. Com., supra, 37 Cal.2d at pp. 222–223, 231 P.2d 32.) The lien applies to recovery by way of compromise and release the same as to recovery by award. (Garcia v. Industrial Accident Com., 41 Cal.2d 689, 693, 263 P.2d 8; Aetna Life Ins. Co. v. Ind. Acc. Com., 38 Cal.2d 599, 604, 241 P.2d 530.) The reduction or apportionment of liens for the recoupment of UCD benefits by use of the ‘Baird’ formula is based upon the special statutory authorization found in Labor Code, section 4904 as amended by the Legislature in 1957. (California-Western States Life Ins. Co. v. Industrial Acc. Com. [Baird], supra, 59 Cal.2d 257, 262–266, 28 Cal.Rptr. 872, 379 P.2d 328.) There is no comparable statutory authorization for the apportionment or reduction of a lien for the recoupment of AFDC benefits. (See County of Contra Costa v. Industrial Acc. Com. [Wilkerson], supra, 212 Cal.App.2d at p. 586, 28 Cal.Rptr. 438.)

Even if the power existed, however, to make some equitable apportionment in accordance with our thought that recoupment might well be limited to the amount by which AFDC benefits would have been reduced had workmen's compensation disability payments been made on a current basis, no such equitable adjustment would appear to be warranted in the case under review. As previously indicated, the cash entitlement of Applicant and his family under AFDC was $239 per month. In his workmen's compensation claims, Applicant asserted that his earnings were such as to entitle him to maximum temporary disability benefits, and the record indicates that such was the fact. (See fn. 1, ante.) Under these circumstances, had Applicant been receiving workmen's compensation temporary disability benefits, the amount thereof would have exceeded the entitlement of him and his family under the AFDC program and would have made them totally ineligible for cash benefits under the AFDC program.

While the problems exposed herein suggest the desirability of express review by the Legislature, under the existing law and circumstances of the case, the Board was correct in allowing the County's lien in full.

Order affirmed.

I respectfully dissent. I cannot agree with the majority's purported narrow holding in the present case. Neither can I agree with the broad implications which, despite the majority's disclaimer, necessarily flow from its observations concerning the possible liability of recipients of AFDC assistance to repay benefits properly received.

The power to seek reimbursement of past paid AFDC benefits exists only to the extent expressly authorized by statute. (23 Ops.Cal.Atty.Gen. 29 [cited with approval in County of Kern v. Coley, 229 Cal.App.2d 172, 180, 40 Cal.Rptr. 53; People v. Samuel, 245 Cal.App.2d 210, 231, 53 Cal.Rptr. 887].) The Legislature has provided for recovery where benefits have been obtained as a result of fraud (Welf. & Inst. Code, §§ 11004(a), 11483), good faith mistake respecting ownership of excess property (Welf. & Inst. Code, § 11020), or absence of a parent from the home (Welf. & Inst. Code, §§ 11350, 11488). But I find no statutory anthorization for recovery of AFDC benefits properly paid. Professor Graham of the New York University School of Law came to the same conclusion in an article which he prepared as a part of a treatise originally financed by the Office of Economic Opportunity. (Graham, ‘Public Assistance: The Right To Receive; The Obligation To Repay,’ 43 N.Y.U.L.Rev. 451 (1968).) He states at page 481 of his article: ‘California has no statutory recovery provisions for licit payments made under federal programs.'1 California is not unique in this respect. Professor Graham reports that in addition to California 17 other states have made no provisions for recoupment of benefits properly paid under federally financed assistance programs.2

Not only is there an absence of statutory authorization for recovery of licit AFDC payments, Welfare and Institutions Code section 11007 indicates that the Legislature intended that there shall be no recovery of such benefits. Section 11007 provides in pertinent part: ‘Aid granted to a recipient of public assistance shall not constitute a lien upon any property of the recipient.’ The words ‘public assistance’ as defined in the Code includes the AFDC program. (Welf. & Inst. Code, § 10061.) Whatever the Legislature may have meant by the words ‘any property,’ section 11007 is a clear legislative mandate that in the administration of public assistance programs, including AFDC, an agreement to repay secured by a lien on ‘any property’ shall not be exacted as a condition of granting aid.

The majority indicates but disclaims deciding that certain sections in part 5, division 9 of the Welfare and Institutions Code relating to county aid to indigents might provide bases for recovery of AFDC benefits. The opinion notes that Welfare and Institutions Code section 17401 which permits counties to take liens for the cost of county hospital care rendered to medical indigents contains a qualifying provision that nothing contained in the section shall be construed to permit a county to impose a lien for aid granted under any federally funded public assistance program3 and suggests that the absence of a similar qualifying provision in other sections of part 5, division 9 providing for liens, recoupment and reimbursement (e. g. 17109, 17401, 17403) indicates that those sections might be construed to apply to aid granted under partially federally financed public assistance programs. The suggested interpretation is unwarranted. Part 5, division 9 to which the majority refers pertains only to aid granted by a county pursuant to its historic obligation to provide relief and support to paupers and indigent residents of the county. (Welf. & Inst. Code, § 17000.) The sections in part 5, division 9 to which the majority alludes all deal with powers of boards of supervisors in the administration of local indigent aid programs. The Legislature, however, has expressly provided that a recipient of public assistance, including AFDC, is not to be considered a ‘pauper’ or an ‘indigent.’ (Welf. & Inst. Code, § 11001.) The qualifying provision in section 17401 was no doubt included out of an abundance of caution to foreclose any attempt to use the section in contravention of Welfare and Institutions Code section 11007 which provides that aid granted under public assistance programs shall not be a lien on any property.

The majority also refers to Civil Code section 248 as providing a further ‘arguable’ basis for recoupment of aid granted under the AFDC program. The section provides in substance that whenever the county furnishes support to ‘an obligee’ it is subrogated to the rights of the obligee to whom support was furnished for the purpose of securing reimbursement and obtaining continuing support.4 Civil Code section 248 is a part of the Uniform Civil Liability For Support Act which was added in 1955 long before the AFDC program was established. The subrogation section was clearly intended to provide for recovery only with respect to aid furnished by a county in discharging its obligations to support and care for indigents. (See County of San Bernardino v. Simmons, 46 Cal.2d 394, 400, 296 P.2d 329.) In commenting upon Civil Code section 248, the late Professor tenBroek, one time chairman of the California State Social Welfare Board and a recognized authority on social welfare law, stated: ‘Furthermore, the subrogation section [Civil Code section 248] is loosely drawn, apparently conferring on the county the right of recovery only with respect to aid paid under the indigent program, and subjecting the county's right ‘to any limitation otherwise imposed by the law of this State,’ including presumably the limitation imposed by the Welfare and Institutions Code on the county right of reimbursement from responsible relatives . . .‘ (tenBroek, ‘California's Dual System of Family Law: Its Origin, Development, and Present Status,’ 17 Stan.L.Rev. 614, 636–637.)

Close examination of the majority opinion reveals that in the final analysis it rests on policy arguments which should be addressed to the Legislature and not upon any express statutory authorizations for recoupment. The ultimate thrust of the opinion is that since the Legislature has by implication (see majority opinion, footnote 12) permitted current workmen's compensation disability payments to be treated as income in determining eligibility for and amount of AFDC benefits payable, reimbursement of AFDC benefits paid pending the recipient's prosecution of a workmen's compensation disability claim ought to be permitted should he obtain a compensation settlement. Finding no express provision authorizing such recoupment, the majority seizes upon Labor Code section 4903, subdivision (c) allowing liens on workmen's compensation awards for ‘the reasonable value of the living expenses of an injured employee or of his dependents, subsequent to the injury,’ as providing the basis for recoupment. It is urged that in the absence of an expressed intention to the contrary, the Legislature must have intended Labor Code section 4903, subdivision (c) as authorizing a lien to be asserted thereunder for living costs provided in the form of AFDC benefits. Policy arguments are then advanced in support of that conclusion. The majority's policy arguments might have some relevance if the Legislature had expressly provided for reimbursement of AFDC payments and the issue was simply whether that obligation could be enforced by asserting a lien under Labor Code section 4903, subdivision (c). But that is not the issue. The Legislature has made no provision for reimbursement of properly made AFDC payments and the majority points to none. Under Labor Code section 4903, subdivision (c) a lien cannot be asserted unless there is a valid debt. Labor Code section 4901 provides: ‘No claim for compensation nor compensation awarded, adjudged, or paid, is subject to be taken for the debts of the party entitled to such compensation except as hereinafter provided.’ (Emphasis supplied.) The ‘debts' excepted by section 4901 are those for which liens may be asserted under Labor Code section 4903, subdivision (c). But, unless specifically so provided as in subdivisions (f) and (g) pertaining to unemployment compensation benefits, the lien provisions of section 4903 could not have been intended to create a legal debt where one was otherwise nonexistent. The provisions of subdivision (c) were designed ‘to protect persons who advance credit or loan money . . . for necessary living expenses' of the employee or of his dependents and not for the benefit of one who was under a legal obligation to do so. (Glass Containers, Inc. v. Ind. Acc. Com., 121 Cal.App.2d 656, 660, 264 P.2d 148, 152.)

Despite its protestations to the contrary, the majority is in effect treating the receipt and retention of AFDC benefits and the subsequent lump sum workmen's compensation award as being double payment ‘for the same disability.’ What the majority overlooks is the fact that AFDC assistance is dependent upon need and that the need in the instant case arose when the workmen's compensation insurance carrier ceased making temporary disability payments. That need was no less imperative during the period the applicant was pursuing his workmen's compensation claim for permanent as well as additional temporary disability benefits.5

While in the instant case policy arguments can be made in favor of recoupment, equally valid arguments can be made against it. (Francis v. Harris, 100 N.J.Super. 313, 241 A.2d 844, 851–852.) Recoupment from sums recovered by an injured workman under our workmen's compensation laws will not necessarily result in a more economical administration of the AFDC program. On the contrary, if disability is permanent or of an extended duration, it may merely hasten the day when the disabled workman and his dependent children will again be forced to seek AFDC assistance. More importantly, recoupment from workmen's compensation awards is contrary to the spirit and purpose of the AFDC program. Congress has declared that the purpose of providing financial assistance to needy children and the parents with whom they are living is ‘to help maintain and strengthen family life and to help such parents . . . to attain or retain capability for the maximum self-support and personal independence consistent with the maintenance of continuing parental care and protection . . .’ (Emphasis supplied.) (42 U.S.C., § 601.) And our Legislature has mandated a ‘humane’ as well as 'economic' administration of the state AFDC program so as ‘to encourage self-respect, self-reliance and the desire to be a good citizen.’ (Welf. & Inst. Code, §§ 10000, 11205.) Recoupment from a modest sum recovered on a workmen's compensation disability claim is neither humane nor fiscally advantageous to taxpayers. (See Graham, ‘Public Assistance: The Right To Receive; The Obligation To Repay,’ supra, 43 N.Y. U.L.Rev. 451, 485.)

Some states have provided for reimbursement or recovery of properly paid AFDC benefits under varying circumstances. Several have provided for reimbursement from sums recovered on personal injury claims. (Francis v. Harris, supra, 100 N.J.Super. 313, 241 A.2d 844, 849–850.) It is interesting to note that the Illinois statute permits reimbursement from personal injury recoveries, but expressly exempts recoveries under the state's workmen's compensation or wrongful death statutes. (Donoho v. O'Connell's, Inc., 18 Ill.2d 432, 164 N.E.2d 52, 55.) The classification has been upheld on the ground amounts recoverable under workmen's compensation or wrongful death statutes are far smaller than amounts recoverable under common law personal injury actions. (Donoho v. O'Connell's Inc., supra, 18 Ill.2d 432, 164 N.E.2d 52, 56; Lalic v. Chicago, Burlington & Quincy Railroad Company, D.C., 263 F.Supp. 987, 989.)

Our Legislature has not provided for recoupment or reimbursement of AFDC payments properly made, either in general or in the limited circumstances here presented. I would reverse the board's decision with directions to disallow the county's lien.

FOOTNOTES

1.  In the Findings and Award in one of the prior cases (68 ANA 25243) rendered July 2, 1969, Applicant's earnings were found to be maximum and he was awarded temporary disability benefits at the rate of $70 per week. Additionally, in his letter to the Board dated November 12, 1971 suggesting figures to be used in a ‘Baird-formula’ apportionment, Applicant attributed $4,500 of the value of his overall claim ($19,479) to temporary disability (some 23% of the total value of his claim) indicating maximum earnings for temporary disability benefit purposes.

2.  In pertinent part this section provides: ‘Aid . . . shall be granted under the provisions of this chapter, and subject to the regulations of the department, to families with related children under the age of 18 years . . . in need thereof because they have been deprived of parental support or care due to: (a) The death, physical or mental incapacity, or incarceration of a parent. . . .’ (Emphasis supplied.)

3.  The record does not disclose whether the ‘fund of money from other sources' was the $9,177.91 received by Applicant as a result of the initial order approving the compromise and release, but it is noted that said order is dated June 4, 1971, and the parties at oral argument indicated that this indeed was the ‘fund of money from other sources' referred to. (See Welf. & Inst.Code, §§ 11157, 11257; Cal.-SDSW Manual-EAS, § 44–111.41.)

4.  The notice and Request for Allowance of Lien requested a lien for the amount specified and ‘all such additional sums as may be advanced by lien claimant to the time of an award,’ but the county makes no point of the fact that its claim of lien was not treated as being for $2,213.50, the full amount paid, and made no point thereof in its petition for reconsideration. We therefore ignore this matter.

5.  County also cites Tyler v. Carter's Appliances, 67 SBR 22914, a San Bernardino case in which a petition for reconsideration was denied by the Board August 1, 1969.

6.  Applicant urges that the reasoning in the cited Attorney General's Opinion is conclusive of the issue involved in this review. The question there addressed was the authority of the State Social Welfare Board to adopt regulations designed to permit collection of overpayments from recipients of AFDC in cases other than those involving actual fraud. Noting the common law rule referred to in the Janssen and Security cases, supra, and the express provision in the statute for restitution in the event of actual fraud, the Attorney General concluded that the State Social Welfare Board had no authority to promulgate such regulations. Thus, the cited opinion does lend support to Applicant's position that, generally, a recipient of AFDC benefits properly paid is under no obligation to make repayment. However, as we shall see, we do not view the critical issue in this case as being the broad question of whether, generally, a recipient of AFDC benefits properly paid is obligated to make repayment. Moreover, the cited Attorney General's Opinion was rendered in 1954, and there have been many additions and changes to the statutes and regulations relating to AFDC benefits since that time. For example, the very question presented in the opinion is now substantially answered, somewhat contrary to the views expressed in the opinion, by sections 11004 and 11020 of the Welfare and Institutions Code.

7.  The AFDC program is founded upon a part of the federal Social Security Act (42 USC § 601 et seq) which ‘makes federal funds available to those states which have submitted and had approved by the Department of Health, Education and Welfare (‘HEW’) a plan for aid and services to needy families with children. Although the AFDC program is elective, once a state chooses to join, its plan must comply with the mandatory requirements established by the Act, as interpreted and implemented by regulations promulgated by HEW.' (County of Alameda v. Carleson, 5 Cal.3d 730, 738–739, 97 Cal.Rptr. 385, 391, 488 P.2d 953, 956: California Welfare Rights Organization v. Carleson, 4 Cal.3d 445, 448–449, 93 Cal.Rptr. 758, 482 P.2d 670; see also King v. Smith, 392 U.S. 309, 316–317, 88 S.Ct. 2128, 20 L.Ed.2d 1118, 1125–1126.) The program is based on the concept of ‘cooperative federalism.’ It is financed in part by federal government and in part by state and county funds. Within broad guidelines established by the federal statutes and regulations promulgated by HEW, administration of the program is given to the individual states, and each state has wide latitude in deciding how the program is to be organized and administered, who is eligible for aid, how much shall be granted to eligible persons, and what provisions shall be made for repayment and reimbursement from those receiving assistance. (See 42 U.S.C. § 601 et seq; Francis v. Harris, 100 N.J.Super. 313, 241 A.2d 844, 847 (1968); see also Villa v. Hall, 6 Cal.3d 227, 229–230, 98 Cal.Rptr. 460, 490 P.2d 1148, [cert. granted and opinion vacated, Hall v. Villa, 406 U.S. 966, 92 S.Ct. 2407, 32 L.Ed.2d 664; subsequent opinion Villa v. Hall, 7 Cal.3d 926, 103 Cal.Rptr. 863, 500 P.2d 887].) While overall administration of the program in the state is the responsibility of the State Department of Social Welfare (Welf. & Inst.Code, §§ 10054, 11050), administration of the program in each county is a county function and the responsibility of the board of supervisors in each county (Welf. & Inst. Code, § 10800) subject, of course, to the federal statute and regulations and the state statute and regulations (see Welf. & Inst.Code, § 11209). (See Ramos v. County of Madera, 4 Cal.3d 685, 693–694, 94 Cal.Rptr. 421, 484 P.2d 93.) The fact that the program is funded by a combination of federal, state and county funds constitutes no impediment to recoupment or reimbursement, for in the event of such recoupment, Welfare and Institutions Code, section 11487 specifically provides that each governmental unit shall be entitled to share in the amount recovered, after deduction of costs of collection, in proportion to the amounts contributed by each of them. (See also 42 U.S.C. § 603(b)(2).)

8.  A fund of money in excess of $9,000 received as nonrecurrent workmen's compensation is not property an applicant or recipient could retain and still be eligible for AFDC benefits. (See Welf. & Inst.Code, §§ 11155, 11157, 11255–11257; California-SDSW Manual-EAS, § 44–111.41; see also fn. 3, ante.)

9.  The bald assertion by Mr. Graham in his article ‘Public Assistance: The Right to Receive; The Obligation to Repay,’ supra, 43 N.Y.U.L.Rev. at p. 481 that ‘California has no statutory recovery provisions for licit payments made under federal programs' is unsupported by any cited authority and fails to consider the possible effect of Civil Code, section 248 and, in any event, this statement was addressed to the question of a general obligation to repay, not to the more restricted question of recoupment presented by this case. (See fn. 6, ante.)

10.  In this connection we note that the dollar amount of recoverable workmen's compensation benefits was substantially increased by the Legislature in 1971. (See Stats.1971, ch. 1750 [operative April 1, 1972, amending numerous Labor Code sections including §§ 4453, 4460 and 4658].)

11.  The federal statute requires ‘that the State agency shall, in determining need, take into consideration any other income and resources of any child or relative claiming aid to families with dependent children . . ..‘ (See also Stinson v. Finch, D.C., 317 F.Supp. 581, 584–585; McCall v. Shapiro, D.C., 292 F. Supp. 268, 274.)

12.  This section, enacted as part of the Welfare Reform Act of 1971 (Stats.1971, ch. 578, § 24.4) provides: ‘Nothwithstanding Section 11008, all lump sum income received by an applicant or recipient, including an applicant for or recipient of aid to families with dependent children, shall be regarded as income in the month received except nonrecurring lump sum social insurance payments, which social insurance payments shall include but are not limited to social security income, railroad retirement benefits, veteran's benefits, workman's compensation, and disability insurance.’ So far as we have discovered, this is the only section in all of division 9 of the Welfare and Institutions Code specifically referring to workmen's compensation benefits. Under the section nonrecurring workmen's compensation benefits are not treated as income in the month received but as personal property. (See California-SDSW Manual-eas, §§ 44–101.7, 44–101.8, 44–11.414.) The clear implication is that if such payments are being received on a recurrent basis they are to be treated as income. (California-SDSW Manual-EAS, §§ 44–101, 44–101.71.)

13.  We recognize that recoupment might equitably be limited to the amount by which the AFDC benefits paid would have been reduced had workmen's compensation disability payments been made on a current basis. This problem, however, is more appropriately treated in that part of the opinion dealing with the Board's power to apportion such a lien claim.

14.  Labor Code, section 4901, of course, provides: ‘No claim for compensation nor compensation awarded, adjudged, or paid, is subject to be taken for the debts to the party untitled to such compensation except as hereinafter provided.‘ (Emphasis supplied.) This prohibition is by its own language (italicized above) made subject to the lien provisions of Labor Code, section 4903.

1.  The majority's characterization of Professor Graham's conclusion as a ‘bald assertion’ without citation of authority is unwarranted. Professor Graham is an expert in social welfare law. In addition to being a law professor, Professor Graham was associate director of the New York University project on social welfare law. It is reasonable to assume that Professor Graham's conclusion was based upon research and investigation conducted personally or under his direct supervision.

2.  States listed by Professor Graham are: Alabama, Arizona, Arkansas, Delaware, Georgia, Kentucky, Louisiana, Michigan, Missisippi, Missouri, Nevada, New Mexico, Oklahoma, Pennsylvania, Texas, Washington and West Virginia. (Graham, ‘Public Assistance: The Right To Receive; The Obligation To Repay,’ supra, 43 N.Y.U.L.Rev. 451, 481.)

3.  The qualifying provision of Welfare and Institutions Code section 17401 reads as follows: ‘In no way do the authorizations and limitations expressed in this section enlarge upon the power of counties to take or impose liens under existing law. Nothing contained in this section shall be construed to permit a county to impose a lien for aid or other assistance granted under any public assistance program established by this code for which federal funds are received by this state, or under the aid to the potentially self-supporting blind program.’

4.  Civil Code section 248 provides:‘The obligee may enforce his right of support against the obligor and the county may proceed on behalf of the obligee to enforce his right of support against the obligor. Whenever the county furnishes support to an obligee, it has the same right as the obligee to whom the support was furnished, for the purpose of securing reimbursement and of obtaining continuing support. The right of the county to reimbursement shall be subject to any limitation otherwise imposed by the law of this state. The court may order the obligor to pay the county reasonable attorney fees and court costs in any proceeding brought by the county pursuant to this section.’

5.  Reasoning similar to that used by the majority in the present case was recently rejected by the United States Supreme Court in Philpott v. Essex County Welfare Board (January 10, 1973) 409 U.S. 413, 93 S.Ct. 590, 34 L.Ed.2d 608, where New Jersey sought to recover benefits paid under a state disability program from a lump sum retroactive federal social security insurance payment. Petitioner had received financial assistance under a partially federally funded New Jersey disability program based upon need and as a condition of aid was required to execute a reimbursement agreement. When petitioner later received a lump sum retroactive federal social security disability insurance benefit (42 U.S.C., § 423), the Welfare Board sued to reach that award under the state reimbursement agreement. The New Jersey Supreme Court held that the agency was entitled to recover despite section 407 of the Social Security Act exempting federal disability insurance payments from execution, levy, attachment, garnishment, or other legal process. (Essex County Welfare Board v. Philpott, 59 N.J. 75, 279 A.2d 806, 811.) The New Jersey court rested its decision on two grounds: (1) That recoupment should not be barred by section 407 because: ‘[I]f an applicant for state disability assistance was at the time receiving monthly federal disability insurance benefits, the amount of the latter would have to be deducted from his budget to arrive at the amount of state assistance . . . Realistically, what took place was to advance to defendant state disability assistance to the full amount of his budget until monthly federal payments began, so that he would, during the interim, have available the entire sum required for his living needs. Thus the funds plaintiff seeks to reach are accrued moneys, not current benefits necessary for defendant's present support and maintenance. It seeks reimbursement, in accordance with the defendant's reimbursement agreement, for support it actually furnished when he needed it to the extent it would have been federally supplied if the monthly federal benefits had begun immediately. The equities are all with plaintiff.’ (279 A.2d at pp. 810–811.) (2) The court reasoned that section 407 should not bar recovery because 42 U.S.C., section 404 would have permitted federal authorities to recover overpayment of federal disability insurance payments out of the very benefits paid despite section 407 and that therefore the state should not be barred from seeking reimbursement on behalf of the federal government as well as itself. (279 A.2d at p. 811.) The United States Supreme Court reversed rejecting both grounds on which New Jersey sought recovery.

KAUFMAN, Associate Justice.

GABBERT, J., concurs.

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