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Caselaw on AFDC Verification

Problems

by Sherry Leiwant and John Hasen

I. Introduction

Requirements that applicants or recipients document their eligibility by providing proof in addition to their own statements that the requirements for eligibility are met are the most common procedural barrier to receipt of AFDC by eligible families.

Most legal services advocates who do public benefits work have had clients enter their offices in desperate need of assistance for which they are eligible. The client will explain that she was denied aid because she could not obtain a document that was satisfactory to the welfare department to prove that she really lived where she said that she did, or that she was really her child's mother, or that she had really not seen her child's father in several years. Similarly, clients often appear at legal services offices in desperate need of immediate assistance due to the termination of their benefits because they did not bring the right piece of paper to a redetermination or because they missed an appointment with the welfare department that they thought was rescheduled.

The harm is enormous. It is true that, in many of these cases, legal services programs can provide representation and help the client get emergency assistance or file for a fair hearing. They can also help clients get the documents they need to prove their eligibility. However, by the time the client arrives at the legal services office, her family may have already suffered the consequences of a month without income—hunger, eviction, and/or utility cutoff. And, of course, for

every

client that makes it into the legal services office, there are many more families that do not, and who may have far greater difficulties getting their benefits back or establishing their eligibility in the first instance.

Moreover, the number of these cases is growing. According to a variety of statistics, denials of AFDC benefits to eligible families have zoomed, probably to well over a million a year, or about a third of all denials."

Requirements that applicants or recipients document their eligibility by providing proof in addition to their own statements that the requirements for eligibility are met are the most common procedural barrier to receipt of AFDC by eligible families. Although, under federal law, states are entitled to require verification,? serious problems arise when zealous administrators impose requirements that are not really necessary to establish eligibility and by their nature are so burdensome or absurd that many applicants or recipients simply cannot comply with them.

footnote 1 cont.

assistance. The Center has submitted three papers to NAS. All of them are available from the National Clearinghouse for Legal Services. They are: (1) Quality Control: A Disaster for the Poor (June 1986) (Clearinghouse No. 41,624A) (14pp.), which contains a discussion of how fiscal sanctions have resulted in extreme verification requirements that in turn have led to an increase in denial due to a procedural reason to families that are largely eligible; (2) HHS Quality Review of Negative Case Action Is Inadequate (Sept. 1986) (Clearinghouse No. 41,624B) (1 pp.), which contains a discussion of what is wrong with current quality control rules for reviewing denials; and (3) Quality Control and the “Churning” Crisis (Dec. 1986) (Clearinghouse No. 41,624D-1) (70pp. exclusive of appendices), which contains a review of HHS data and various studies to show how the fiscal sanction policy increases denials for a procedural reason and how the evidence shows that most of the families so denied are probably eligible.

The statistics Center staff have looked at indicate that "procedural denials" have nearly tripled in the period from 1972-84 due largely to HHS's quality control fiscal sanction policies, which pressure states to expand verification policies to the extreme and to

deny for noncompliance with procedures. 2. 42 U.S.C. § 602(a)(10); 45 C.ER. § 233. 10(a)(1)(ii)(B); Roldan v.

Minter, 409 F. Supp. 663 (D. Mass.), appeal dismissed, 429 U.S. 967 (1976).

Sherry Leiwant is a Senior Staff Attorney and John Hasen is a former Staff Attorney at the Center on Social Welfare Policy and Law, 95 Madison Ave., Room 701, New York, NY 10016, (212) 679-3709.

1. In the course of the Center's representation of the Houston Welfare

Rights and Michigan Welfare Rights Organizations with regard to a congressional study by the National Academy of Sciences (NAS) on quality control policies, we have confirmed the sense that procedural barriers are indeed depriving eligible families of needed

III. Limitations on State-Imposed

Verification Requirements

Confronted with this problem, attorneys for applicants and recipients have tried to address improper verification procedures in AFDC through litigation. The purpose of this article is to summarize the federal law on verification, particularly the case law. Of course, verification problems may differ from state to state. In addition, the law on what is and what is not an acceptable verification practice is far from clear. Finally, some of the most successful cases in this area have been resolved through consent orders rather than judicial decisions. However, because the problem is such a serious one, advocates should be aware of the cases that have been brought that have resulted in improvements in verification procedures, and should consider whether litigation on behalf of injured clients might be a way to attack the most harmful verification practices in their states.

The article begins with a discussion of the propriety of state-imposed verification requirements and the limits on those requirements in federal law and includes examples of harmful verification practices potentially subject to challenge. The article then goes on to discuss the case law on verification, first discussing those cases that have challenged specific verification practices directly and then discussing AFDC delay cases that have resulted in orders that include remedies for verification problems.

Although federal law clearly authorizes verification, it also requires that “all individuals wishing to make application for aid to families with dependent children shall have opportunity to do so, and that aid ... be furnished with reasonable promptness to all eligible individuals."8 This language clearly implies that state verification policies should not be so burdensome that they will, in effect, stop families from being able to demonstrate their eligibility and receive aid.

This reading is supported by federal regulations implementing this statutory provision:

Eligibility conditions or agency procedures or
methods must not preclude the opportunity for an
individual to apply and obtain a determination of
eligibility or ineligibility.
Methods of determining eligibility must be con-
sistent with the objective of assisting all eligible
persons to qualify. 10
Standards and methods for determining eligibili-
ty shall be consistent with the objectives of the
programs.
Financial assistance ... shall be furnished prompt-
ly to all eligible individuals without any delay
attributable to the administrative process, and
shall be continued regularly to all eligible indi-
viduals until they are found to be ineligible. 12

11

II. Propriety of State-Imposed Verification

Requirements

In addition, both the statute and the regulations establish particular time standards for processing of AFDC applications, not to exceed 45 days."

IV. Harmful Verification Practices

As noted, there is no question that states are permitted to seek verification of an individual's eligibility for AFDC benefits. The federal statutory requirement that states furnish benefits “to all eligible individuals” implicitly includes the right of the state agency to determine whether individuals applying for assistance are in fact eligible.” In addition, the federal statute specifically requires states to require monthly reports in certain circumstances and to terminate assistance if the reports are not properly filed.* Federal regulations, largely adopted in their current form by 1973, provide further authority for state verification requirements. There is also AFDC case law upholding the state's right to impose conditions on applicants for and recipients of aid that are necessary for proper administration of the program;' those cases that have specifically addressed the legitimacy of verification provisions have held that reasonable requirements are permissible and that the burden of establishing eligibility may properly be placed on the individual who seeks assistance.' Accordingly, a direct attack on an agency's right to verify eligibility factors would most likely fail.

Examples of verification requirements that may run afoul of the state's statutory and regulatory obligations to assist all eligibles are requirements such as:

• the refusal of the state agency to permit the

substitution of documents when the substituted
papers are valid and fully provide the informa-
tion requested;
improper reliance on third-party information
that is inaccurate or incomplete and conflicts
with the applicant's position without giving
the applicant a chance to respond;
imposition of artificial deadlines for submit-
ting documentation, and denials instead of
deferrals if documentation is not received with-
in that time;

3. 42 U.S.C. $ 602(a)(10). 4. 42 U.S.C. $ 602(a)(14). 5. See 45 C.ER. § 233.10(a)(1)(ii)(B) (“A state may impose condi

tions upon applicants for and recipients of public assistance which, if not satisfied, result in the denial or termination of public

assistance.''). 6. See New York State Dep’t of Social Servs. v. Dublino, 413 U.S.

405 (1973); Wyman v. James, 400 U.S. 309 (1971). 7. Lavine v. Milne, 424 U.S. 577 (1976); Roldan, 409 F. Supp. 663;

Craig v. Creasy, No. C-1-78-48 (S.D. Ohio Mar. 30, 1979) (Clearinghouse No. 23,759). Indeed, a majority of the Supreme Court has stated that preventing fraud in welfare determinations rises to the level of a compelling state interest. Bowen v. Roy, 106 S. Ct. 2147 (1986).

8. 42 U.S.C. $ 602(a)(10). 9. 45 C.E.R. § 233.10(a)(1)(vi). 10. 45 C.ER. § 233.10(a)(1)(vii). 11. 45 C.FR. § 206.10(a)(10). 12. 45 C.ER. $ 206.10(a)(5)(i). 13. 42 U.S.C. $ 602(a)(4); 45 C.ER. § 206.10(a)(3).

A. Failure to Allow Substitution of Documents

statute. 16

requiring information that is not necessary for
the eligibility determination (e.g., past main-
tenance, income of family members not in the
assistance unit);
repeated requests for information already sub-
mitted due to loss of documentation by case-
worker or allegation by caseworker that docu-

mentation is “stale”;
• requests for documents duplicative of other

information already in the agency's possession;
• refusal to accept applications for processing

without all documentation, so that the 45-day
(or 30-day) limitation period runs from a later
date than the original submission of the

application.

Although verification practices such as these might be considered improper, not all such practices have been challenged, and there is not necessarily legal precedent for challenging them. However, if eligible clients are being denied needed assistance because of some of these practices, an argument can be made that the agency is imposing unreasonable verification requirements resulting in the denial of aid to eligible families in violation of the applicable federal statutes and regulations cited above.

In Roldan v. Minter,"s plaintiffs challenged the Massachusetts provision that recognized only birth certificates or baptismal or school records as proof of the ages and relationship of children in an AFDC unit; both of the named plaintiffs were unable to produce such specific documentation. Plaintiffs argued that Massachusetts's verification requirements denied aid to eligible children in violation of the federal AFDC

After the suit was commenced, the state amended its policy to allow numerous other documents to be used to establish eligibility (2.8., marriage licenses, family Bibles, passports, hospital records, affidavits of third parties, etc.)."?

Plaintiffs in Roldan had pressed for an opinion that any verification requirements beyond the statement of the applicant that resulted in denials of aid were improper. Although they did not win such a holding, they did persuade the state to expand the list of permissible documentation that could be used to establish eligibility. In addition, it is clear from the decision that the judgment for the state was based on the state's willingness to expand permissible documentation, and there is an implication that, absent such an expansion, the verification requirements would not have been considered “reasonable." Roldan, therefore, is supportive of an argument that a state policy that allows no substitution of allowable documents to establish eligibility may be found “unreasonable" and improper under federal AFDC provisions.

In McCoy v. Gibbs, 18 the state agency required an address for the absent parent and specific documentation from a limited list of sources in order for an applicant to establish deprivation by reason of continued absence. Washington State did not permit the applicant to submit letters from the applicant's neighbors, landlord, etc. to establish absence.

After the lawsuit was filed, the state entered into a consent judgment whereby it agreed that assistance could not be denied or terminated because of the failure to provide a specific type of documentation to prove continued absence, but rather alternative documentation must be accepted and any documentation provided must be considered. The state agreed to notify applicants of satisfactory alternative documents at their initial eligibility interviews. Furthermore, the state agreed to require only documentation “readily available" to the applicant or recipient, with “readily available" defined as obtainable within three working days.

An address for the absent parent remained a possible means of verification, but the state also expanded the list of acceptable alternative forms to include a written statement from a "knowledgeable disinterested person’19 or, if not available,

V. Litigation Against Certain Verification

Practices

A number of cases have successfully challenged specific excesses in state verification practices. Most of the cases were litigated on the theory that the verification practices at issue violated 42 U.S.C. $ 602(a)(10) and the implementing regulations discussed supra by denying aid to eligible children or families.14 Although, as discussed above, the argument that verification requirements result in denial of aid to eligibles would be difficult in an across-the-board attack against verification requirements generally, this argument has been successful with respect to specific requirements that effectively preclude families from obtaining an eligibility determination (like requiring specific documents) or with respect to requirements that have no relationship—or a very attenuated relationship

to the establishment of eligibility for AFDC benefits.

States generally respond to such challenges with allegations that they need to impose verification requirements in order to weed out ineligibles or to respond to federal quality control pressures. However, the cases discussed below show that it is often difficult for a state to defend on these grounds when (1) the plaintiffs before the court are clearly needy and eligible for assistance but cannot obtain aid or were terminated because, through no fault of their own, they could not obtain the verification required, and, (2) at the same time, the verification requirements at issue are marginally useful or could easily be replaced with less burdensome requirements.

15. Roldan, 409 F. Supp. 663. 16. 42 U.S.C. $ 602(a)(10). 17. See Roldan, 409 F. Supp. at 665, for a complete list. 18. McCoy v. Gibbs, No. 83-2-01054-1 (Wash. Super. Ct., Thurston

County, Mar. 1, 1984) (Clearinghouse No. 36,483). 19. A “knowledgeable disinterested person” is defined by the order as

"one whose knowledge of the applicant's or recipient's living situation arises through some type of formal or business relationship," id., slip op. at 3 (e.g., school officials, family physicians, attorneys, employers, ministers, landlords with formal lease/rental agreements, church officers, etc.).

14. A corollary theory, also based on section 602(a)(10), is that such

practices impose additional eligibility conditions not included under federal law that result in the denial of aid to eligibles.

Gillis W. Long Memorial Article Contest

that the state agency could not require that applicants document how their resources were exhausted prior to application. The court held that, since AFDC is a current needs program, as long as an applicant can prove that his or her family is currently destitute, how their resources were exhausted is not a factor in establishing eligibility. Therefore, the court held, aid could not be denied because of failure to verify exhaustion of resources. Likewise, in Taylor v. New Jersey Department of Institutions and Agencies, 22 an agency provision that required an applicant for assistance to indicate how resources were expended before application was struck down as an additional condition of

eligibility. 23

The Gillis W. Long Poverty Law Center of Loyola University, New Orleans, Louisiana, announces the first annual Gillis W. Long Memorial Article Contest. The contest provides for two $2,500 prizes. Contestants must be full-time employees of grantees of the Legal Services Corporation.

Articles of law review quality and length are sought. The general theme for entries is the legal problems and needs of indigent children. Authors are free to select topics within the theme.

One prize of $2,500 will be awarded for the best article submitted by a person employed by a field project grantee. The other $2,500 prize will be awarded for the best article submitted by a person employed by a non-field project grantee. Prizewinning articles will be published in the Spring issue of the Loyola Law Review.

Entries must be postmarked no later than December 1, 1987. All entries become the property of the Gillis W. Long Poverty Law Center. For complete rules of the contest, please write Rev. Michael S. Gallagher, S.J., Coordinator, Gillis W. Long Poverty Law Center, 7214 St. Charles Ave., New Orleans, LA 70118.

Similar results were obtained in Buckner v. Maher, 24 where the court voided a state regulation that disqualified AFDC applicants who had transferred assets for less than "reasonable consideration” within seven years of their application date. Plaintiffs argued that the transfer of assets provision and the requirement that the applicant provide verification related to that provision denied aid to those eligible for aid under federal standards. Responding to the state's arguments that investigation into such transfers was necessary, the court expressly held that a “state certainly may not predicate eligibility upon proof of a fact which is not germane” to eligibility under federal standards,28 and further stated that states may not “impose unlimited burdens of proof upon welfare applicants, especially where the applicant has cooperated fully and is not in a position to do more.'

Finally, in Rosen v. Hursh,27 the state required verification of the income and resources of a family member not in the assistance unit and denied or terminated aid if this information was not provided.28 The court held that such a state practice violated federal law in that termination of assistance based upon the failure of a family member (over whom the children had no control) to provide information would result in the denial of aid to eligible individuals, namely the children.

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two statements from other knowledgeable persons,” including neighbors, friends, relatives, etc. The order further provided that, if the claimant was unable to provide verification to establish absence, the state agency would have the obligation to attempt to obtain verification of the absent parent's address. Failing this, the agency would be required to consider “all pertinent information” provided by the claimant in making its determination as to absence, and any decision that denied or terminated assistance would require supervisory approval. 20

Although in both Roldan and McCoy plaintiffs obtained better verification requirements through consent of the state rather than through court order, these cases indicate that improvements can be obtained through litigation. Although the favorable results in these cases are not of precedential value for other courts, other state agencies might be influenced by what agencies in Massachusetts and Washington were willing to do. In addition, both cases indicate a reluctance on the part of at least two state agencies to take the position in court that only certain documentation is acceptable, when plaintiffs can show that they are unable to obtain the required verification, and other types of verification would clearly serve the same purpose.

22. Taylor v. New Jersey Dep't of Inst. & Agencies, No. A-1403-76

(N.J. Super. Ct. App. Div. Mar. 14, 1978) (Clearinghouse No.

39,438). 23. On the other hand, in Craig, No. C-1-78-48 (Clearinghouse No.

23,759), the court held that termination for failure to verify exhaustion of resources was permissible where the welfare department had “a prima facie case of ineligibility” due to excess resources. In such a case, the court held, it was proper for the welfare department to require that the recipient come forward with proof that she did not have resources the department had deter

mined she did have. 24. Buckner v. Maher, 424 F. Supp. 366 (D. Conn. 1976), aff d, 434

U.S. 898 (1977) (Clearinghouse No. 17,344). 25. Id., 424 F. Supp. at 374. 26. Id. Not only did the court accept plaintiff's arguments on this

score, but the federal government also agreed with plaintiff's position and filed a brief in support of plaintiffs in the Supreme Court. In that brief, the federal government discussed the state's right to impose collateral requirements not in federal law in administering its welfare program, and took the position that, since Connecticut's transfer of assets provisions were not narrowly tailored to serve an important state purpose consistent with federal policy, they denied benefits to otherwise eligible individuals. Brief

for the United States at 5, Buckner (Clearinghouse No. 17,344). 27. Rosen v. Hursh, 464 F.2d 731 (8th Cir. 1972). 28. The state provision sought information as to the financial status of

stepparents, at a time prior to the statutory provision that permitted stepparent deeming. 42 U.S.C. § 602(a)(31).

B. Verification of Nonessential Facts

1

A number of courts have held that "reasonable'' verification does not include documentation of facts not necessary to prove eligibility. Thus, in Capuano v. Affleck, 21 the court held

20. Id., slip op. at 4. 21. Capuano v. Affleck, No. Civ-78-0180 (D.R.I. Feb. 28, 1978)

(Clearinghouse No. 23,698).

C. Verification Requirements That Preclude

Establishing Relevant Facts

30

Some verification procedures are so burdensome or impossible to meet that they effectively preclude the possibility of a determination. In Perez v. Chang, 29 plaintiffs challenged the Hawaii welfare department's failure to allow all actual work expenses as a deduction from countable income. Although Hawaii's welfare manual provided for a variety of work-related expense deductions, it also provided that the need for each work expense item had to be verified by the applicant’s/ recipient's employer and that the actual expenditure had to be verified by documentation. The court held that, “[b]y requiring burdensome verification of all work related expenses and by not using Plaintiffs as the primary sources of information, Defendants have violated 45 C.F.R. $ 206.10(a)(10)."

"31 Similarly, in many states, requirements for verifying the relationship of paternal relatives to an illegitimate AFDC child for purposes of establishing eligibility effectively precluded some children living with paternal relatives from qualifying for benefits. 32 In Rivera v. Miller, plaintiffs challenged the verification requirements imposed on illegitimate children living with paternal relatives to prove relationship, i.e. an adjudication of paternity, acknowledgment by the father in open court, or the father's signature on a welfare department form acknowledging paternity. The court criticized the Illinois welfare department for failure to accept other forms of verification and found that “the restrictions imposed on plaintiffs virtually extinguish their right to AFDC benefits.' The case was decided on equal protection grounds, that is, that the verification requirements to establish relationship of maternal relatives were far less stringent.

In Mena v. Rahm, 34 similarly, plaintiffs challenged Washington State's restriction of verification that could be used to establish relationship of the paternal relatives to the illegitimate AFDC child to either a court order establishing paternity or an affidavit of paternity signed by both father and mother. The state consented to allow use of a birth certificate naming the father, a court order of paternity, an affidavit signed just by the father, or, if those were not available, collateral statements from disinterested parties.

family, even if the application and supporting documentation provided by the applicant supported a finding of eligibility. In particular, plaintiffs challenged the state's requirement that, for some applications (those filed by non-legally responsible caretakers or by those who had resided in Wisconsin for less than a year), positive action could not be taken on the application until responses to questions about eligibility were received from relatives, other state public agencies, social security offices, bureaus of vital statistics, etc.

Plaintiffs obtained an excellent consent judgment. The court order, while reaffirming the welfare department's right to verify information relevant to the AFDC eligibility determination, permanently enjoined the state agency from denying or terminating aid due to the inability of the applicant to provide information if the applicant claimed that he or she did not currently possess or control the information and was powerless to obtain it.

The state also agreed not to deny or terminate due to the non-receipt of information or documentation regarding the potential availability of resources or income that the individual had declared was not available. Finally, with respect to substitution of documents, the state agreed no denials or terminations would occur due to the failure of the applicant to provide specific documents relating to eligibility when other relevant documentation, supportive of the applicant's statements, was available.

The agency also consented to provide AFDC to any applicant not conclusively determined to be unable to establish eligibility within 30 days of filing an application. This, in a sense, created a presumption of eligibility based on the applicant's own statements in his or her application.36

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D. Requirement of Third-Party Verification

Federal law is clear in guaranteeing the right of applicants to have their applications processed within 45 days.

In Grandberry v. Schmidt, 35 plaintiffs challenged the state's requirement that third parties provide information about an applicant's eligibility before payments would be made to a

Some court orders or settlements aimed at ensuring a state's compliance with federal requirements on timely processing have included protections against verification procedures that contribute to delay.

The federal statute requires that “prompt” decisions shall be made (and benefits paid, if due) on all AFDC applications. In no case may a determination and issuance of a

29. Perez v. Chang, 438 F. Supp 238 (D. Hawaii 1977). 30. At that time, federal law required that all actual work expenses be

deducted from gross income in calculating the AFDC grant. 31. Perez, 438 E Supp at 245. 32. Mena v. Rahm, No. 84-2-0062-4 (Wash. Super. Ct., Thurston

County, Mar. 1, 1984) (Clearinghouse No. 36,214); Rivera v. Miller, No. 81 C 3187 (N.D. III. 1982) (Clearinghouse No. 32,720); Stokes v. Silverman (Wis. Cir. Ct. 1980) (Clearinghouse

No. 29,325); Smith v. Puett, 506 F. Supp. 134 (N.D. Tenn. 1980). 33. Rivera, No. 81 C 3187, slip op. at 8. 34. Mena, No. 84-2-0062-4. 35. Grandberry v. Schmidt, No. 74-C451 (E.D. Wis. Jan. 13, 1975)

(Clearinghouse No. 13,681).

36. It is noteworthy that, in the Center's statistical work on procedural

denials, Wisconsin stands out as a state with procedural denials substantially below the national average (with no corollary increase in error rates). It may be that the consent order in Grandberry has

something to do with this outstanding performance by Wisconsin. 37. 42 U.S.C. $ 602(a)(10) requires that AFDC shall be furnished

with reasonable promptness."

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