20 CFR 416.1130(b), 416.1148(b)(2), 416.1165, and 416.1167(a)(2)

SSR 84-12c

Woodson v. Schweiker, USDC, N.D. Alabama, Southern Division, Civ. No. CV81-PT-1813-E (2/15/83)

The claimant, who was born on January 27, 1959, became eligible for supplemental security income (SSI) benefits as a blind individual in January 1974. During the period covered by this class action suit, the claimant attended a school for the blind, where his tuition, room, and board charges were paid for by the State of Tennessee. Although the claimant resided at the school, he continued to be subject to parental control and came home for holidays and school vacations. In 1978, the Social Security Administration (SSA) determined that the free room and board provided to the claimant by the State was in-kind income and that the claimant's income was also deemed to include the income of his parents. When SSA reduced the claimant's SSI benefits because of the income he was receiving from these two sources, the claimant appealed. He contended that the regulations requiring the reduction of his SSI benefits by both deemed parental income and imputed in-kind income are unconstitutional. The claimant maintained that such a reduction violates section 504 of the Rehabilitation Act (29 U.S.C. § 794) because it discriminates against him on the basis of his handicap and that it violates his equal protection rights because it denies him the right to a full, free public education. The district court found, however, that the reduction of the claimant's SSI benefits by both deemed parental income and imputed in-kind income was based on the individual's residence and not on either the claimant's handicap or his education, and thus violated neither section 504 of the Rehabilitation Act nor the claimant's equal protection rights. The court further found that these regulations are rationally related to Congress' goal in the SSI program of providing an aged, blind, or disabled individual with a guaranteed minimum standard of living. Consequently, the district court held that the regulations challenged by the claimant are constitutional.

PROPST, District Judge:


This cause comes on to be heard on plaintiff's Motion for Summary Judgment, filed on February 22, 1982, and defendant's Motion for Summary Judgment filed on January 19, 1983.[1] For the reasons stated below, the Motion of defendant, the Secretary of Health and Human Services, is due to be granted.

Facts and Proceedings

Plaintiff, Stearl Woodson, was born on January 27, 1959. He became eligible for Social Security Income (SSI) benefits in January 1974 because he was blind. During the period covered by this lawsuit, plaintiff attended the Tennessee School for the Blind (TSB), which is a residential school located in Nashville, Tennessee, 200 miles from plaintiff's home in LaFollete, Tennessee. He spent holidays, summer vacations, and other short vacations at home with his parents. The State of Tennessee paid for plaintiff's tuition, room, and board charges while he attended TSB.

In the spring of 1978, the Secretary reduced plaintiff's SSI benefits for two reasons. First, the Secretary determined that the free room and board provided plaintiff by the State of Tennessee was in-kind income, pursuant to 42 U.S.C. § 1382(a)(2)(A) and 20 C.F.R. §§ 416.1130-48.[2] Second, because plaintiff's father became temporarily ineligible for SSI benefits during October to December 1977, because of an inheritance that he received, the Secretary decided that plaintiff was subject to deemed parental income, pursuant to 20 C.F.R. §§ 416.1161-68.[3]

Plaintiff challenged the reduction of his SSI benefits by both deemed parental income and imputed in-kind income. The Secretary granted permission to plaintiff on October 22, 1981, to utilize the expedited appeals process to resolve this question. Plaintiff filed this action on November 17, 1981. He seeks monetary, declaratory, and injunctive relief. This court certified a class in this action on December 9, 1982. There is no dispute between the parties concerning the facts.

§ 504 Claim

Plaintiff, who is required by the State of Tennessee to attend TSB, a residential training school, alleges that because of his placement at TSB, his SSI benefits are subject to a double reduction or a "double deeming," first because of deemed parental income, and second because of imputed in-kind income based on the support and maintenance provided by TSB. Plaintiff argues that if he were able to live at home, he would receive support and maintenance from his family only, and that as a result, his SSI benefits would be subject only to one reduction, the deeming of parental income. Thus, plaintiff maintains that the reduction of his SSI benefits for both deemed parental income and imputed in-kind income results in a discrimination against him on the basis of his handicap in violation of § 504 of the Rehabilitation Act, 29 U.S.C. § 794.

The Secretary argues in response that plaintiff is treated the same as all other similarly situated handicapped children. Additionally, the Secretary contends that for purposes of determining plaintiff's SSI eligibility and benefit among, whey plaintiff attends TSB is irrelevant. All that matters, according to the Secretary, is that plaintiff is a student in a residential setting at TSB and that he is receiving in-kind income in the form of food and shelter. The Secretary maintains, therefore, that there is no violation of § 504.

Section 504 in pertinent part states as follows:

No otherwise qualified handicapped individual in the United States, . . . shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance or under any program or activity conducted by any Executive agency or by the United States Postal Service.

29 U.S.C. § 794 (Law. Co-op. 1982) (emphasis added). The Second Circuit recently listed the elements to a § 504 violation:

[A] plaintiff must prove (1) that she is a "handicapped person" under the Act, (2) that she is "otherwise qualified" for the position sought, (3) that she is being excluded from the position solely by reason of her handicap, and (4) that the position exists as part of a program or activity receiving Federal financial assistance.

Doe v. New York Univ., 666 F.2d 761, 774-75 (2d Cir. 1981) (emphasis added). The Secretary does not contest the first and fourth elements and perhaps the second element. Whether the Secretary discriminated against plaintiff solely on the basis of his handicap is the central issue.

In the typical suit brought under § 504, the plaintiff usually alleges that he was not hired because of his handicap, or that he was not allowed to attend a certain school because of his handicap, or that he was discriminated against -- treated differently that nonhandicapped persons -- because of his handicap. If one person is being discriminated against, then by definition another person must receive better treatment. In this case, however, there is no such other person who receives better treatment than plaintiff. It is true that plaintiff's benefits would be reduced only by deemed parental income if he were able to attend school at home. If this were the case, however, plaintiff would not receive free room and board at school, a sizeable "benefit." Thus, the benefits that plaintiff receives when he is at TSB and the benefits he would receive if he were attending school and living at home are different, but one package of benefits is not better than the other package of benefits in the court's view. Plaintiff does not receive as many benefits if he is at TSB because he does not need as many. Thus, the court finds that there is no discrimination. The Secretary is not discriminating against plaintiff on any basis.

If the court were to conclude that the different benefit levels constituted discrimination, there still would be no violation by the Secretary of § 504. The discrimination would be based not on plaintiff's handicap, but on his place of residence. If he and his parents lived in Nashville, plaintiff's SSI benefits would be reduced only by deemed parental income because he could live at home and attend TSB. He would still be handicapped, however. Whether the Secretary reduces plaintiff's SSI benefits with imputed in-kind income depends not on whether plaintiff is handicapped, but on whether he resides in a city where there is a suitable school.

A cross examination of plaintiff's § 504 claim reveals that plaintiff's logic is circular. Plaintiff receives SSI benefits because he is handicapped. Plaintiff then argues that because benefits should be higher, he is being discriminated based on his handicap. Because the Secretary has not discriminated against plaintiff, this court finds that there is no genuine issue of material fact and that the Secretary is entitled to judgment as a matter of law on plaintiff's § 504 claim.

Equal Protection Claim

Congress amended the Social Security Act in October 1972 by adding the federal Supplemental Security Income (SSI) program, which became effective January 1, 1974, 86 Stat. 1465, 42 U.S.C. § 1381 et seq. Congress intended this program "(t)o assist those who cannot work because of age, blindness, or disability," S.Rep. No. 1230, 92d Cong. 2d Sess. 4, by "Set(ting) a Federal guaranteed minimum income level for aged, blind, and disabled persons," id. at 12. See Schweiker v. Wilson, 450 U.S. at 223. Thus, Congress intended that the SSI program would subsidize such a person's income to the extent necessary to raise it to a subsistence level. See H. R. Rep. No. 231, 92d Cong., 2d Sess., reprinted in 1972 U.S. Code Cong. & Ad. News 4989, 5135-36. The earned and unearned income received by a person from other sources is to be subtracted from the initial SSI benefit amount to determine the actual SSI benefit amount.

The Supreme Court recently restated the standard to be used in an equal protection analysis:

Unless a statute employs a classification that is inherently invidious or that impinges on fundamental rights, areas in which the judiciary then has a duty to intervene in the democratic process, this Court properly exercises only a limited review power over Congress, the appropriate representative body through which the public makes democratic choices among alternative solutions to social and economic problems. At the minimum level, this court consistently has required that legislation classify the persons it affects in a manner rationally related to legitimate governmental objectives.

Schweiker v. Wilson, 450 U.S. 221, 230 (1981) (citations omitted). This standard is also used in the review of social welfare regulations. See, e.g., Kollett v. Harris, 619 F.2d 134, 139 (1st Cir. 1980).

Plaintiff contends that the double reduction of plaintiff's benefits for deemed parental income and imputed in-kind income is without rational basis, because plaintiff's benefits are reduced twice for the same income (food and shelter) even though he can receive that income from only one source. Plaintiff argues that it is impossible for him to simultaneously benefit from his parent's deemed income and TSB imputed in-kind income. Thus, the Secretary reduces plaintiff's benefits for income that he does not receive, according to plaintiff.

The Secretary in response argues that there is no double reduction for income received only once. The Secretary points out that although plaintiff receives a substantial amount of support and maintenance from TSB, it is reasonable to assume that he still receives some income from his parents such as food and shelter on weekends and vacations at home. Also, because TSB provides for what would otherwise be parental expenses,[4] plaintiff's parents are more able to provide plaintiff with items such as clothing, transportation, and spending money. The Secretary also argues, pursuant to Kollett v. Harris, supra, that the deeming of parental income is constitutional, even if the money from plaintiff's parents is not available to him.

The court is persuaded that the applicable regulations involving deemed, parental income and imputed in-kind income is rationally related to legitimate governmental objectives. Plaintiff receives income from two sources, his parents and TSB.[5] The Secretary must consider both sources of income and adjust plaintiff's benefits accordingly. To not do so would be inconsistent with Congress' purposes in providing SSI benefits. The challenged regulations are in total conformity with and rationally related to Congress' objectives pursuant to the Social Security Act.

In addition, plaintiff claims that the double reduction of his SSI benefits violations his equal protection rights, because the double reduction denies plaintiff his right to a full, free public education as required by 20 U.S.C. § 1411 et seq. As stated above, the Secretary reduces plaintiff's SSI benefits for income received from his parents and TSB. There is no reduction for his education. Plaintiff's contention is without merit.

Because the Secretary's regulations for deemed parental income and imputed in-kind income are rationally related to legitimate governmental objectives, there exists no genuine issue of material fact and the Secretary is entitled to judgment as a matter of law.

An order in accordance with this Memorandum Opinion will be entered contemporaneously herewith.

[1] Defendant filed a Memorandum in Support of Defendant's Motion for Summary Judgment on April 29, 1982. Defendant, however, inexplicably failed to file a formal Motion with the Clerk's Office at that time. At the request of this court, defendant filed a formal Motion on January 19, 1983.

[2] 20 C.F.R. § 416.1130(b) 1982) states as follows:

In-kind support and maintenance means any food, clothing, or shelter that is given to you or that you receive because someone else pays for it. Shelter includes, room, rent, mortgage payments, real property taxes, heating fuel, gas, electricity, water, sewerage, and garbage collection services . . . .

20 C.F.R. § 416.1148(b)(2) (1982) states as follows:

If you are a child under age 21 who lives in the same household with an ineligible parent, and you are temporarily absent from the household to attend school (§ 416.1167(a)(2)), any food, clothing, or shelter you receive at school is income to you unless your parent purchases it. We value this income under the presumed value rule (§ 416.1140). We also apply the deeming rules to you (§ 416.1165).

[3] 20 CFR § 1167(a)(2) (1982) states as follows:

If you are an eligible child who is away at school but comes home on some weekends or lengthy holidays and if you are subject to the control of your parents we consider you temporarily absent from your parents' household. However, if you are not subject to parental control, we do not consider your absence temporary and we do not deem parental income to you. Being subject to parental income* affects whether income is deemed to you only if you are away at school. [*Correct citation from the regulation is "parental control" ED.]

[4] When plaintiff is attending TSB, his parents do not have to feed him, heat or cool his bedroom, maintain his bed, or drive him to and from school.

[5] The Secretary points out that plaintiff's parents have the option of paying for plaintiff's room and board at TSB. If they were to do this, the Secretary would not reduce plaintiff's SSI benefits by imputing in-kind income for TSB support and maintenance.

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