The opinion of the court was delivered by: WEINER
This action was brought by the plaintiffs seeking a permanent injunction prohibiting the Secretary of Pennsylvania's Department of Public Welfare ("DPW") from denying supplemental benefits under the Aid to Families with Dependent Children ("AFDC") program to applicants and recipients whose gross incomes exceed 150% of Pennsylvania's payment level, but do not exceed 150% of Pennsylvania's actual standard of need.
The parties stipulated to the following facts. Plaintiff Evangeline Coleman ("Coleman") resides in Philadelphia with her three small minor children. Coleman's gross monthly income from her employment is $662.20, from which she nets $525.00 per month after taxes. From that sum, Coleman pays a babysitter $215.00 per month and $30.00 per month for carfare to and from work, leaving her a net of $270.00 per month. Coleman has been receiving a supplemental public assistance benefit from DPW under the AFDC program for herself and their three children. In Philadelphia, the AFDC payment level for a family of four is $381.00 per month, whereas under the Woodbury
Standard updated through June 1981, it is $652.04 per month. Coleman's gross monthly income from employment exceeds $572.00 which is 150% of the payment level for a family of four in Philadelphia, but does not exceed $978.05 which is 150% of the updated Woodbury Standard. DPW has notified Coleman that her supplemental AFDC payments will be discontinued because her gross income exceeds 150% of Pennsylvania's standard of need.
The plaintiffs argue that Pennsylvania's active "standard of need" is the Woodbury Standard as updated by DPW. The defendants on the other hand argue that Pennsylvania's state plan is a formal contract between DPW and the federal Department of Health and Human Services (HHS), and that the Woodbury Standard has never been adopted as part of Pennsylvania's state plan nor has the state plan ever referred to the Woodbury Standard. Thus, the issue before this court is to determine Pennsylvania's standard of need as that term is used in the Omnibus Budget Reconciliation Act of 1981, (O.B.R.A.), Pub.L. 97-35, Sec. 2303 (August 13, 1981). That act, which amends section 402(a) of the Social Security Act, 42 U.S.C. 602(a), provides that a state plan for aid and services to needy families must:
"(18) provide that no family shall be eligible for aid under the plan for any month, if, for that month, the total income of the family (other than payments under the plan), without application of paragraph (8), exceeds 150 percent of the State's standard of need for a family of the same composition." (emphasis added).
The defendants would have this court treat its plan as approved by HHS, as a contract, and then apply contract law in interpreting the plan. This argument ignores the fact that a state may not promulgate a plan contrary to federal requirements. Rosado v. Wyman, 397 U.S. 397, 420-421, 90 S. Ct. 1207, 1221-1222, 25 L. Ed. 2d 442 (1970). They claim they have not done so because HHS has adopted its State Plan.
Defendants concede that DPW has never explicitly stated that its standard of need and payment level are one and the same. [Defendants' Memorandum in Opposition to Plaintiffs' Request for a Permanent Injunction, 6.] Nevertheless, they maintain that officials of HHS, who administer the AFDC program, are of the opinion that the standard of need in Pennsylvania and the payment level are equal. Yet, at a preliminary hearing held on January 6, 1981, one such official, Robert Clifford, testified only that states may establish a standard of need which differs from their level of payment except that states will violate Section 602(a) (23) of the Social Security Act, 42 U.S.C.A. § 602(a) (23) if the established standard of need, at any time, falls below the level of need set as of July 1, 1969.
At no point did Clifford testify that Pennsylvania's standard of need and level of payment are the same.
Two DPW officials testified at the hearing to the effect that the Woodbury Standard has never been incorporated into Pennsylvania's AFDC program. However, neither official offered any documentation to support this assertion.
In addition, defendants state that "to determine what [Pennsylvania's] standard of need is requires simply looking at the plan." [Defendants' memorandum in Opposition, 10]. However, defendants neither quote nor cite the pertinent provisions of the State Plan. On perusing Pennsylvania's Public Assistance Manual, 55 Pa.Code, § 101.1 et seq., we presume that defendants are relying on Sections 171.21 and 175.21. Sections 171.21(a) (1) and (a) (2) relate to need and amount of assistance under the AFDC program and read as follows:
"(a) Standard of need. Individual standard of need determinations will be made in accordance with the following:
(1) A person, or group applying together for assistance, is in need if income and other available resources as defined in this subpart are less than the family size allowances as established by regulation. The difference will be the amount of the assistance grant.
(2) The objective of this chapter is that the person or group shall have the amount of assistance needed for living ...