United States Court of Appeals, Second Circuit
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2 Soc.Sec.Rep.Ser. 35
Celia ROTHMAN, et al., Plaintiffs-Appellants,
v.
Richard SCHWEIKER, Secretary of Health and Human
Services;
and Barbara Blum, Commissioner of the New York
State Department of Social Services,
Defendants-Appellees.
Nos. 602, 603, 604, 605, 606, 607, 608, Dockets 82-6061,
82-6063, 82-6065, 82-6067, 82-6075, 82-6077 and 82-6079.
United States Court of Appeals,
Second Circuit.
Argued Jan. 24, 1983.
Decided April 25, 1983.
Charles Robert, Hempstead, N.Y. (Robert & Schneider, Hempstead, N.Y.,
Ira Schneider, Hempstead, N.Y., of counsel; and Nassau/Suffolk Law
Services Committee, Inc., Leonard S. Clark, Hempstead, N.Y., Robert
Bencivenga, Long Beach, N.Y., of counsel) for plaintiffs-appellants.
Barbara Lewis Spivak, Deputy Regional Atty., Region II, Dept. of Health
and Human Services, New York City (Juan del Real, Gen. Counsel,
Washington, D.C., Jo Davis, Asst. U.S. Atty., E.D.N.Y., Brooklyn, N.Y.,
of counsel; Raymond J. Dearie, U.S. Atty., E.D.N.Y., Brooklyn, N.Y.) for
defendant-appellee, Richard Schweiker, Secretary of Health and Human
Services.
Stephen M. Jacoby, Asst. Atty. Gen., New York City (Robert Abrams,
Atty. Gen. of the State of New York, Amy Juviler, Eugene E. Zegarowicz,
Asst. Attys. Gen., New York City, of counsel) for defendant-appellee,
Barbara Blum, Com'r of the New York State Dept. of Social Services.
Before LUMBARD, VAN GRAAFEILAND and PIERCE, Circuit
Judges.
PER CURIAM:
Appellants1 appeal from a judgment of the United States District Court for the
Eastern District of New York (George C. Pratt, District Judge ), entered on
January 8, 1982, dismissing appellants' complaints upon appellees' motions for
summary judgment and denying appellants' various procedural motions.2 Since
we affirm substantially for the reasons discussed at length in the opinion of the
district judge, Glasgold v. Secretary of Health and Human Services, 558
F.Supp. 129 (E.D.N.Y.1982), the pertinent facts and arguments need only be
briefly summarized here.
Appellants are recipients of Supplemental Security Income (SSI), a federal
program of aid to the elderly, blind and disabled whose income and resources
fall below certain levels. The SSI program,3 which became effective on January
1, 1974, provides for a flat grant, reduced by income received from other
sources. 42 U.S.C. Secs. 1381a, 1382(b) (1976). For purposes of calculating a
recipient's SSI benefit, income includes both earned and unearned income. 42
U.S.C. Sec. 1382a(a) (1976). Unearned income includes "support and
maintenance furnished in cash or kind." 42 U.S.C. 1382a(a)(2)(A) (1976).
Among the various rules applicable to in-kind support and maintenance
promulgated under the statute are the so-called "one-third reduction" and
"presumed value" rules. The one-third reduction rule applies if a recipient lives
in the household of another person who provides him with both food and
shelter. In that case, the support and maintenance in kind is not deducted dollar
for dollar from the SSI grant, but, rather, the federal standard payment amount
is reduced by one-third. 20 C.F.R. Sec. 416.1131 (1982).4 Where the eligible
individual is living in his own household or in the household of another but is
receiving not food and shelter, but only food or shelter, the "presumed value"
rule applies. Under this rule, the maximum value of the in-kind income is
presumed to be an amount equal to one-third of the federal standard payment
plus the exclusion applicable to unearned income. 20 C.F.R. Secs. 416.1140,
416.1124(c)(10) (1982). This rule applies unless the recipient demonstrates that
the actual value of the in-kind income is less than the presumed value. 20
C.F.R. Sec. 416.1140(a)(2) (1982).
In addition to the federal portion of the SSI benefit, the federal statute provides
for state supplementation of the federal grant. 42 U.S.C. Sec. 1382e (1982); 20
C.F.R. Secs. 416.2025-2030 (1982) (optional supplementation), 416.2050-2075
(1982) (mandatory supplementation). The New York State supplement takes
one of two such forms: mandatory minimum state supplementation (MSS),
N.Y.Soc.Serv.Law Sec. 210 (McKinney 1976 & Supp.1982-83); and optional
state supplementation (OSS), id. Sec. 209. MSS is available only to persons
who were recipients under the pre-SSI (i.e., pre-1974) state program of aid to
the aged, blind and disabled, and is not reduced by in-kind income.5 OSS
applies to all other recipients--i.e., those who were not receiving aid under the
pre-1974 state program. The OSS grant is computed by subtracting the sum of
the federal SSI grant plus federal countable income (including in-kind income)
from the New York minimum income level. Thus, under OSS, a recipient's
federal countable income, including earned and unearned in-kind income, is
considered available to the OSS recipient. See N.Y.Soc.Serv.Law Secs. 208(6),
208(8) (McKinney 1976).
4
As in the district court, appellants raise on appeal a variety of arguments
relating to the calculation of their federal and state SSI benefits. Their principal
arguments may be summarized as follows. First, they claim that in-kind income
imputed to them6 should not be considered in the calculation of either federal or
state countable income since it is not "actually available" to them.7 The district
judge found otherwise, based on an interpretation of the applicable statutory
provision, 42 U.S.C. Sec. 1382a(a)(2) (1976), and regulations promulgated
thereunder. Since we agree with the district judge's interpretation as set forth in
his opinion, we add only that we do not find that Jackson v. Schweiker, 683
F.2d 1076 (7th Cir.1982), upon which appellants rely heavily, calls for a
contrary result. In Jackson, the Seventh Circuit found inappropriate, on the
facts of that case, the inclusion in countable income of the difference between
market rental value and actual rent paid by an SSI recipient. The court reasoned
that the excess of market rental over rent actually paid, in Jackson's case, could
not be considered actually available because it failed to enhance the recipient's
purchasing power. Id. at 1082. We do not find the Jackson analysis applicable
to this case, however. We are persuaded, rather, by holdings in other circuits
which, in our view, tend to support the district judge's conclusion herein that
the in-kind income attributed to appellants is includable in countable income
since it constitutes actual economic benefit. See, e.g., Buschmann v. Schweiker,
676 F.2d 352, 355 (9th Cir.1982); Nunemaker v. Sec. HEW USA, 679 F.2d
328, 332-33 (3d Cir.1982); Usher v. Schweiker, 666 F.2d 652, 655-57 (1st
Cir.1981); Kimmes v. Harris, 647 F.2d 1028, 1033-34 (10th Cir.), cert. denied,
454 U.S. 898, 102 S.Ct. 400, 70 L.Ed.2d 214 (1981).
As in the district court, appellants also present the following arguments: that
the "living in the household of another" OSS category set forth in the federalstate agreement violates state law; that the pre-1974 state countable income
rules, which do not mandate reduction by in-kind income, be used to determine
not only MSS, but also OSS benefits; that the one-third reduction rule and
presumed value rule as applied (by failure to use pre-1974 state countable
income rules) denied them equal protection of the laws; that respondents'
income-gathering procedures violated appellants' rights of privacy; and that the
district court abused its discretion by denying appellants' motion for class
certification. We reject these claims for the reasons set forth in the opinion of
the district judge.
6
Having considered all of the arguments presented, we affirm the decision of the
district court.
While it appears that some of the plaintiffs below are not properly before this
court, we will nonetheless address the claims of those appellants who are
proper parties. We note also that the district judge remanded seven of the cases
before him for further proceedings consistent with his decision. Those cases
are: Dorfman v. Secretary, 78 C 1109; Thompson v. Secretary, 78 C 1584;
Coppola v. Secretary, 78 C 1792; Torres v. Secretary, 78 C 1913; Coombes v.
Secretary, 77 C 2485; Glasgold v. Secretary, 77 C 1363; and Greenbaum v.
Secretary, 77 C 1441. We do not disturb that ruling
In the district court, plaintiffs moved to consolidate all the pending cases; to
serve and file an amended consolidated complaint; to add additional federal,
state, and county defendants; to allow additional individuals to intervene as
party plaintiffs; and for class certification. Because the district judge found no
merit in plaintiffs' substantive claims, all procedural relief was denied
42 U.S.C. Secs. 1381-1383c (1976)
Reference is made to the 1982 version of the Code of Federal Regulations. The
applicable regulations were rewritten and renumbered in 1980. The provisions
implicated in this appeal are substantially the same as those in effect before the
1980 revision. Where there are differences, they are noted
Because the pre-1974 state grants were not reduced to account for in-kind
income, New York pays "grandfathered" SSI recipients the greater of OSS or
MSS. See N.Y.Soc.Serv.Law Sec. 210 (McKinney 1976 & Supp.1982-83); 20
C.F.R. Sec. 416.2050 (1982)
Such "imputed income", it is argued, might be rent subsidy provided by
relatives to appellants who are residents of Private Proprietary Homes for
Adults; groceries provided by a relative; or the difference between current
market value of an apartment and the actual rent charged by a relative
Appellants argue that in-kind income contemplated by the Secretary includes
only "actual available income" as defined in 20 C.F.R. Sec. 416.120(c)(2)
(1982), which reads:
"Income" means the receipt by an individual of any property or service which
he can apply, either directly or by sale or conversion, to meeting his basic needs
(see Subpart K of this part).
(previously numbered 20 C.F.R. 416.1102(a) (1980)). The 1980 version of the
applicable regulations also included 20 C.F.R. Sec. 416.1120 (1980), which
read, in pertinent part: "In determining the amount of unearned income the
amount actually available to the individual is considered." In our view, the
inclusion of imputed in-kind income, of the sort challenged herein, comports
with the statute and the regulations promulgated thereunder, as found by the
district judge below.
