Department of Health and Human Services
Departmental Appeals Board
QUALITY CONTROL REVIEW PANEL
SUBJECT: Washington Department
of Social and Health Services
Docket No. A-92-214
Decision No. QC28
DATE: November 19, 1992
DECISION
The Washington Department of Social and Health Services
(Washington)
appealed a July 9, 1992 quality control (QC)
review determination by the
Regional Administrator,
Region X, of the Administration for Children and
Families
(ACF). ACF determined that the Washington QC review had
erred by not including in a recipient's income the total
amount of a
birthday gift the recipient had received.
Instead, the Washington QC
review had included only part
of the gift in the recipient's income,
disregarding the
rest.
For the reasons described below, we reverse ACF's
determination.
Background
A federal QC review for September 1991 determined that
the Washington QC
review had erred in not identifying
unreported income received by an Aid to
Families with
Dependent Children (AFDC) grant recipient. This income
included wages, as well as a $75 birthday gift the
recipient had
received from his employer.
The dispute here concerns only the treatment of the
birthday gift.
Washington counted only $45 of the gift
as reportable income, disregarding
the remaining $30.
The federal QC review found that the birthday gift
in its
entirety, all $75, should have been counted as reportable
income.
Analysis
An AFDC grant recipient is entitled to receive gifts,
under certain
conditions, without the gift being
considered income. The regulations
at 45 C.F.R. §
233.20(a)(3)(iv) provide that, in determining the
availability of income and resources, several items will
not be included
as income, including:
(F) at State option, small nonrecurring gifts, such
as those for
Christmas, birthdays and graduations,
not to exceed $30 per recipient in any
quarter.
Washington exercised this option and provided for the
receipt of gifts in
its AFDC State plan:
The State disregards from available income small
nonrecurring gifts
such as birthday, Christmas, and
graduation gifts, not to exceed $30 per
person in
any quarter.
Section 2.3 at Page 7b.
Washington further promulgated a regulation reflecting
this policy on
gifts. Section 388-28-480(3)(b) of the
Washington Administrative Code
(WAC) provides:
The department shall disregard nonrecurring cash
gifts up to thirty
cumulative dollars received by
each member of the AFDC assistance unit per
calendar
quarter.
ACF contended that Washington's position of disregarding
the first $30 of
a larger gift is contrary to the clear
provisions of section
233.20(a)(3)(iv). ACF referred to
an October 29, 1986 memorandum from
the Acting Director
of the Office of Family Assistance to the Regional
Administrator of Region VIII, which stated:
When the amount of a gift from one source exceeds
$30, the total
amount is counted because the gift is
not inconsequential.
ACF Brief at 3.
ACF further pointed out that while Washington's State
plan does provide
for the disregard of gifts under $30,
it makes no mention of any option for
disregarding the
first $30 of a larger gift. ACF contended that any
interpretation of WAC 388-28-480(3)(b) that permitted the
first $30 of a
larger gift to be disregarded would not
comport with the State plan and
would not be a
permissible State practice.
The issue before us is whose interpretation of section
233.20(a)(3)(iv)
is more reasonable. We conclude that,
in the absence of any publicized
ACF instructions to the
contrary, Washington's view of the regulation is
a
practical and acceptable approach to gifts received by
AFDC
grant recipients.
There is nothing in the regulation itself or in its
preamble (51 Fed.
Reg. 9191, at 9197 (March 18, 1986))
that specifically addresses the
question before us.
Washington's interpretation of the regulation,
however,
satisfies the intent of the regulation to allow AFDC
recipients
to receive small gifts without penalty.
Washington's policy prohibits large
gifts, but, by
disregarding the first $30 of a larger gift, Washington
still comports with the regulation's intent to allow a
recipient to
receive up to $30 per quarter. Any amount
in excess of the $30 limit
imposed by the regulation is
counted towards an AFDC recipient's income.
ACF's position, on the other hand, could lead to somewhat
irrational
results. Examples provided by Washington
demonstrate the
unreasonableness of ACF's interpretation
of the regulation. A state
could disregard a $30 gift,
but would be required, under ACF's position, to
include a
$31 gift in its entirety in a determination of an AFDC
recipient's income. Or, if the employer had given the
recipient an
annual gift of $60, but given another
employee $15 each quarter (for an
annual total of $60),
all of the recipient's gift would be counted toward
his
income, while all of the second employee's $60 would be
excluded.
Furthermore, the fact that in this particular case it was
the recipient's
employer who made the gift has no bearing
on the result. The birthday
gift was treated as being
distinct from the recipient's wages. There
is nothing in
section 233.20(a)(3)(iv) that makes any distinction about
the source of a gift.
The fact that Washington's State plan does not
specifically address the
question of a disregard of the
first $30 of a larger gift does not, as ACF
contends,
invalidate Washington's interpretation of the regulation.
The language of the State plan mirrors the language of
the
regulation. We do not see that Washington was
required to do more than
that.
Moreover, nothing in the record before us shows that ACF
ever
communicated its interpretation of the regulation
regarding gifts to
Washington. There is no mention in
ACF's Quality Control Manual (QCM)
as to how gifts in
excess of $30 should be treated. The QCM merely
states
that payments not to be considered in determining AFDC
eligibility and payment may include, "At State option,
small
nonrecurring gifts that do not exceed $30 per
recipient in any
quarter." Section 3570. The October
26, 1986 memorandum, cited
by ACF as stating the ACF
position on gifts in excess of $30, was sent to a
regional official in another region, not to Washington.
We do not
see, therefore, how it can be considered
binding on Washington.
Conclusion
For the reasons described above, we find that the
Washington QC review
made no error when it disregarded
the first $30 of the recipient's birthday
gift. We
therefore reverse the ACF determination.
__________________________
Leslie A. Weyn
__________________________
Maxine Winerman
__________________________
Thomas D. Horvath
(..continued)