Challenges Reduction of Welfare to Woman Who Refused to Work
In 1994, Legal Services of Eastern Michigan sued the state for reducing
the welfare benefits of individuals who voluntarily quit their jobs. In
this case, AFDC recipient Darlene Smith obtained a job at a nursing home
and was given an Earned Income Disregard (EID) to encourage her efforts
at self-sufficiency. Under the EID, the state didn’t count the income Smith
earned from her job so that she would not be disqualified from AFDC. This
is supposed to provide recipients a smoother transition to self-sufficiency
by not drastically lowering their income when they start working. However,
in January 1989 Smith voluntarily quit her job at the nursing home for
no other apparent reason than that she didn’t want to work. Because she
quit her job without good cause, the state withdrew Smith’s EID for January
and counted her nursing home income which led to a temporary reduction
in her AFDC payments. Legal services sued on Smith’s behalf claiming that
the EID is only meant to encourage work and should not be used to punish
recipients who quit their jobs. A federal appeals court rejected legal
services’ argument for leniency because “it does nothing to encourage employment
among AFDC recipients.”
See Smith v. Babcock, 19 F.3d 257, US App. Ct., 1994
Opposes Inclusion of Spouse’s Income in Calculating Welfare Eligibility
In 1990, Michigan Legal Services sued the state for including the welfare payments of one spouse in calculating another spouse’s eligibility for additional welfare. In 1987, John Pyke applied for food stamps and general assistance. His application for general assistance was denied because his wife Mary was already receiving federal SSI benefits of $369 a month. The state reasoned that the benefits received by Mary should be considered as benefiting John by virtue of their being husband and wife. Legal services claimed that this violated a number of laws including their clients’ 14th amendment rights. However, a state appeals court ruled against legal services, finding nothing “irrational” in calculating an individual’s qualifications for welfare by taking into account his or her spouse’s financial resources.
See Pyke v. Dept. of Social Services, 182 Mich. App. 619,
Ct. of App., 1990
Stops Effort to Recoup Illegally Obtained Welfare
In 1991, Michigan Legal Services stopped the state Department of Social
Services from recouping nearly $1500 in illegally obtained welfare benefits
from a recipient. In this case, the recipient and her children moved into
an apartment which entitled her to receive a monthly shelter allowance
of $185 in addition to her regular AFDC grant. However, later it was discovered
that her landlord was the father of one of her children. State regulations
expressly prohibit shelter allowances for AFDC families when the landlord
is a parent of one of the children. The state terminated the shelter allowance
and reduced her monthly AFDC grant to recoup the $1480 in shelter allowances.
However, on appeal, Michigan Legal Services stopped the garnishment because
the regulation authorizing the recoupment was not properly promulgated
according to federal rule-making procedures.
See Palozolo v. Dept. of Social Services, 189 Mich.
Wins Major Case Expanding Right to Unemployment Benefits
In 1991, Wayne County Neighborhood Legal Services (WCNLS) won a major
case before the Michigan Supreme Court when it ruled that individuals who
lose their jobs for failing licensing exams are eligible for unemployment
benefits. Legal services brought the case on behalf of two nurses who were
fired by their hospitals for failing their professional licensing exams.
Because the state only authorized unemployment for individuals who lose
their jobs through no fault of their own, the Michigan Employment Security
Commission turned down their applications. However, WCNLS reasoned that
because the nurses involuntarily failed their exam, they should get unemployment.
The court agreed despite the protestations of the defendant hospitals who
wondered why they should have to underwrite people who are responsible
for failing their own tests.
See Clarke v. North Detroit Receiving Hospital, 437 Mich. 280,
Mich. Supr. Ct., 1991; Richard Dumas, “Fired Employees Are Entitled to
Jobless Pay,” Michigan Lawyers Weekly, June 3, 1991