Peter C. Wilson v. State of Connecticut Department of Social Services (2014)

MEMORANDUM OF DECISION

The plaintiff submitted an application for the Supplemental Nutrition Assistance Program (“SNAP,” f/k/a “food stamp program”) on November 24, 2011.   His application was denied by the defendant on December 9, 2011 due to excess income.   The underlying facts are essentially undisputed.

The plaintiff reported his income as a monthly Social Security disability benefit of $588 and also reported that he receives $15,000 annually from a structured settlement annuity which was a settlement of a personal injury lawsuit.   These payments are divided by 12 months to determine a monthly income amount of $1,250.00 per month, which, when added to his monthly $588 disability benefits, totals $1,838.00.   After applying allowable deductions such as medical expenses, the plaintiff's adjusted net income is $1,537.98.   The SNAP monthly net income limit for a household of one is $908.   The plaintiff's adjusted net income of $1,537.98 exceeds the $908 net income limit.

The plaintiff timely appealed the Department's denial, and after an administrative hearing on April 12, 2012, a Notice of Decision was issued on May 8, 2012, upholding the Department's denial of the plaintiff's application for SNAP benefits due to excess income.

II. ARGUMENT

A. Standard of Review

“Judicial review of [an administrative agency's] action is governed by the [Uniform Administrative Procedures Act (UAPA) ] ․ and the scope of that review is very restricted.”  (Internal quotation marks omitted.)  Cadlerock Properties v. Commissioner, 253 Conn. 661, 668 (2000), U.S. cert.   Denied, 121 S.Ct. 1089 (2001).  “The court shall affirm the decision of the agency unless the court finds that substantial rights of the person appealing have been prejudiced because the administrative findings, inferences, conclusions, or decision are:  (1) in violation of constitutional or statutory provisions;  (2) in excess of the statutory authority of the agency;  (3) made upon unlawful procedure;  (4) affected by other error of law;  (5) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record;  or (6) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.”  General Statutes § 4–183(j).

Further,

[j]udicial review of an administrative agency decision requires a court to determine whether there is substantial evidence in the administrative record to support the agency's findings of basic fact and whether the conclusions drawn from those facts are reasonable ․ [T]he trial court may [not] retry the case or substitute its own judgment for that of the administrative agency on the weight of the evidence or questions of fact.   Our ultimate duty is to determine, in view of all of the evidence, whether the agency, in issuing its order, acted unreasonably, arbitrarily, illegally or in abuse of its discretion ․ The substantial evidence rule governs judicial review of administrative fact-finding under the UAPA. General Statutes § 4–183(j)(5) and (6).   An administrative finding is supported by substantial evidence if the record affords a substantial basis of fact from which the fact in issue can be reasonably inferred ․ The substantial evidence rule imposes an important limitation on the power of the courts to overturn a decision of an administrative agency ․ and to provide a more restrictive standard of review that standards embodying review of weight of the evidence or clearly erroneous action ․ [S]ubstantial evidence ․ is something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence.

(Citations omitted;  internal quotation marks omitted.)  Cadlerock Properties v. Commissioner, supra, 253 Conn. 676–77.

Finally,

this court affords deference to the construction of a statute applied by the administrative agency empowered by law to carry out the statute's purposes ․ [A]n agency's factual and discretionary determinations are to be accorded considerable weight by the courts ․ Cases that present pure questions of law, however, invoke a broader standard of review than is ordinarily involved in deciding whether, in light of the evidence, the agency has acted unreasonably, arbitrarily, illegally or in abuse of its discretion ․ Furthermore, when a state agency's determination of a question of law has not previously been subject to judicial scrutiny ․ the agency is not entitled to special deference ․ [I]t is for the courts, and not administrative agencies, to expound and apply governing principles of law.  (Internal quotation marks omitted.)

Sweetman v. State Elections Enforcement Commission, 249 Conn. 296, 305–06, 732 A.2d 144 (1999).

B. The Annual Annuity Payment Was Properly Counted As Income

The Department of Social Services is the designated agency for the administration of the SNAP program.  Conn. Gen. Stat § 17b–2.

For purposes of the SNAP Program, income is very generally defined as “income from whatever source,” excluding only certain gains or benefits not in the form of money;  infrequent and irregular income not in excess of $30;  educational loans;  other loans on which payment is deferred;  and certain reimbursements which do not exceed expenses actually incurred.  7 USC § 2014(d).  Annuities are not included in these specific exceptions.  Id.

The SNAP regulations, cited by the hearing officer in his decision, clearly provide that annuities should be considered income in determining eligibility:

unearned income shall include, but not be limited to:

(i) Assistance payments from Federal or federally aided public assistance programs, such as supplemental security income (SSI) or Temporary Assistance for Needy Families (TANF);  general assistance (GA) programs (as defined in § 271.2);  or other assistance programs based on need

(ii) Annuities;  pensions;  retirement;  veteran's;  or disability benefits;  worker's or unemployment compensation ․ old-age, survivors, or social security benefits;  strike benefits;  foster care payments ․

7 CFR § 273.9(c) (Emphasis supplied).

The hearing officer also considered the Department's Uniform Policy Manual (UPM) § 5050.53, which governs the treatment of intermittent income and distinguishes payments which are sporadically received from lump sum payments based on their probable recurrence (as in the annuity payments in this case.   (R at 3–4.)   Specifically, the hearing officer noted that UPM § 5050.53(A) gives examples of income that is considered intermittent, including, as in the case of the annuity payments at issue in this case:

(3) payments made at intervals greater than one month subject to arrangements made between the payor and payee, including but not limited to, benefits from insurance settlements, payments of dividends and interest, and payments from pensions and annuities.

(Emphasis supplied.)

UPM § 5050.53(B)(1) further provides that it should be considered whether the intermittent payment is “one of a series of contracted payments to be received over a period of time from a particular source.”   UPM § 5050.5393 provides that:

whether the income consists of unearned income paid on installment basis either resulting from the nature of the source or pursuant to an agreement between the payor and the payee, the payment is averaged over the number of months the amount is intended to cover.

According to these provisions, the Department properly considered the annual annuity payment to the plaintiff to be countable income, and divided the payment over twelve months to determine a monthly income amount of $1,250.00 per month from this annuity.

The plaintiff, however, ignores these provisions which clearly include annuities.   Instead, he argues that federal income tax law should control this program.   That a payment may not be considered taxable income does not mean that it cannot be considered intermittent or unearned income for purposes of determining food stamp eligibility.   The United States Supreme Court has determined that the food stamp regulations were reasonably adopted and within the Secretary's statutory authority in performing his duty to formulate and administer a food stamp program.  Knebel v. Hein, 997 S.Ct. 549, 429 U.S. 288 (1977).

Further, the Eighth Circuit has held that in defining what constitutes income for the food stamp program, it was Congress' intent to “cast the broadest possible net.”  Meyer v. Lyng, 859 F.2d 62 (8th Cir.1988).

Finally, by way of analogy, the Connecticut Supreme Court has held that tort recoveries can be considered “available resource[s].”  Langs v. Harder, 165 Conn. 490, 494–95 (1973), cert. denied 416 U.S. 994 (1974).

Accordingly, the plaintiff's efforts to argue that federal income tax rules should apply to the Department's administration of the SNAP program must fail.   While the plaintiff might not be required to pay income tax on the annuity payments at issue in this case, they are clearly, under the foregoing federal and state provisions, unearned income for purposes of determining SNAP eligibility.

CONCLUSION

The burden of establishing welfare eligibility rests at all times on the applicant for assistance.  Lavine v. Milne, 424 U.S. 577 (1976);  Harrison v. Commissioner, 24 Conn. 672 (1987).   It has also been repeatedly recognized that is the “duty of all courts to recognize the conditions defined by Congress for charging the public treasure.”  Federal Crop Insurance v. Merrill, 332 U.S. 380, 385 (1947).

For all of the foregoing reasons, the appeal is dismissed.

OWENS, JUDGE TRIAL REFEREE

Owens, Howard T., J.T.R.