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decided: December 20, 1978.


Appeals from the Order of the Department of Public Welfare in cases of Appeal of Ms. Rebecca K. and Appeal of Mr. Edward L., dated October 4, 1976.


C. Frederick Ryland, with him Stephen R. Krone, and, of counsel, William A. Duerk, and Perito, Duerk and Carlson, P.C., for appellants.

Linda M. Gunn, Assistant Attorney General, for appellee.

Judges Crumlish, Jr., Mencer and Blatt, sitting as a panel of three. President Judge Bowman and Judges Crumlish, Jr., Mencer, Rogers, Blatt, DiSalle and Craig. Judges Wilkinson, Jr. and MacPhail did not participate. Opinion by Judge Mencer. Dissenting Opinion by Judge Blatt.

Author: Mencer

[ 39 Pa. Commw. Page 345]

The appellants, identified only as Ms. Rebecca K. and Mr. Edward L., appeal to this Court from orders of the Pennsylvania Department of Public Welfare (DPW) denying them food stamp benefits. They have been residents of Blue Jay Village (facility), a drug treatment facility, since March and May 1976, respectively, and it is operated by the Abraxas Foundation, which is certified by the Drug and Alcohol Council of Pennsylvania as a nonprofit drug treatment and rehabilitation program. On behalf of the respective appellants, the Beaver and Allegheny County Commissioners paid $18.60 per day to the facility for their treatment, but the appellants also applied to the Forest County Board of Assistance for food stamps, which were denied. Forest County is the location of the facility, and the food stamps were denied on the basis that the payments by the other counties on behalf of the appellants were "vendor payments" and exceeded the maximum allowable monthly income eligibility standards for food stamps for a single-person household of $245 per month. On appeal, the hearing officer of DPW affirmed this finding, and it is from this determination that the appellants now appeal.

[ 39 Pa. Commw. Page 346]

Under the provisions of Section 44 of the Administrative Agency Law, Act of June 4, 1945, P.L. 1388, as amended, 71 P.S. § 1710.44, review by the Commonwealth Court of adjudications of DPW is to determine whether an error of law was committed, constitutional rights were violated, or a necessary finding of fact was unsupported by substantial evidence. Department of Public Welfare v. Young, 23 Pa. Commonwealth Ct. 523, 352 A.2d 582 (1976).

Under The Food Stamp Act of 1964 (Act)*fn1 and implementing regulations, the United States Department of Agriculture (USDA) administers a program in which low income households within participating states may purchase food stamps at a discount in order to maintain a nutritionally adequate diet. The Pennsylvania Department of Welfare administers the federal food stamp program in this Commonwealth and is responsible under the Act for the certification of applicant households and the issuance of coupons. See 7 U.S.C. § 2019(b). In order to be eligible for food stamps, an individual applicant must meet the requirements of a qualifying household and must also meet financial eligibility standards. The eligibility of certain households, such as drug treatment centers,*fn2 is determined at the federal level under the Act, while the eligibility of others is determined by the states under uniform national income and resource standards set forth in the Act and federal regulations.*fn3

The appellants argue that the payments made by these respective counties on their behalf, known as

[ 39 Pa. Commw. Page 347]

    vendor payments, may not be considered "income." Income is defined in the federal regulations to include "payments, except those for medical costs, made on behalf of the household by a person other than a member of the household," 7 C.F.R. § 271.3(c)(1)(i)(h), and it has been previously held that vendor payments were properly includable as income in determining food stamp eligibility. See Compton v. Tennessee Department of Public Welfare, 532 F.2d 561 (6th Cir. 1976) (rent supplement paid on behalf of household); Huerta v. Health and Social Services Department, 86 N.M. 480, 525 P.2d 407 (1974) (disability insurance benefits paid on behalf of applicant). Recently, however, it has been held that the payment provision is void because the USDA failed to comply with the publication requirements of the Freedom of Information Act.*fn4 Anderson v. Butz, 550 F.2d 459 (9th Cir. 1977). The United States Court of Appeals in Anderson, supra, ordered the refund of any sums overcharged for food stamps because rent subsidies had been improperly included as income under the void vendor-payment provision. Here, the appellants were also denied food stamp benefits because the payments to the facility were included as income under the vendor-payment provision of DPW's regulation. DPW Pa. Manual Reference para. 3753.72110. See Singer v. Department of Public Welfare, 33 Pa. Commonwealth Ct. 198, 381 A.2d 225 (1978). They argue, therefore, ...

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