Todd v. Norman

MAGILL, Circuit Judge.

This appeal raises the question whether Social Security Child’s Insurance Benefits (“Child’s Insurance Benefits”) paid pursuant to 42 U.S.C. § 402(d) are “child support payments” within the meaning of 42 U.S.C. § 602(a)(8)(A)(vi) (the “child support disregard”).

I. BACKGROUND.

Elizabeth Todd and Sarah Starr (“appellants”) are recipients of Child’s Insurance Benefits and Aid to Families with Dependent Children (“AFDC”) benefits. The Iowa Department of Human Services (“Iowa”), in determining AFDC eligibility and grant levels, refused to “disregard” the first $50 of Child’s Insurance Benefits that appellants received on behalf of their children. Appellants filed a class action lawsuit to challenge this policy.

Congress established the AFDC program to provide aid to children who are needy because of a parent’s death, absence or incapacity. 42 U.S.C. § 606(a). Although state participation in the program is not mandatory, states which elect to participate must follow federal law when administering their AFDC program. Congress mandates that participating states consider all income and resources available to the recipient family before determining the need-based amount of assistance payable under the AFDC program. 42 U.S.C. § 602(a)(7). Thus, any income received by AFDC recipients is set off dollar-for-dollar from the applicable benefit level. However, a portion of various categories of “income” must be “disregarded,” or not counted as family income, before the state makes a “need” determination. 42 U.S.C. § 602(a)(8)(A).

Once the state has made this need determination, a benefit award is calculated, and AFDC payments are made to the AFDC recipient. In exchange for the AFDC payment, the AFDC recipient is required to assign to the state all rights to child support payments from the non-custodial parent. 42 U.S.C. § 602(a)(26)(A). The state then collects the child support payments from the non-custodial parent. See 42 U.S.C. § 651 et seq.

The Deficit Reduction Act of 1984, Pub.L. No. 98-369, § 2640, 98 Stat. 494, 1145-46 (1984), introduced two new provisions to the AFDC program relating to the child support assignment described above. One provision, codified at 42 U.S.C. § 657(b)(1), requires the state to distribute to the AFDC recipient the first $50 of monthly child support payments it collects from the noncustodial parent. This $50 distribution is not to affect eligibility or decrease assistance. The other provision, which is at issue here, provides that the state must:

* * * disregard the first $50 of any child support payments received in such month with respect to the dependent child or children in any family applying for or receiving aid to families with dependent *610children (including support payments collected and paid to the family under 457(b) [42 U.S.C.S. § 657(b)] * * *.

42 U.S.C. § 602(a)(8)(A)(vi).

Child’s Insurance Benefits are paid to the dependent child or children of an individual (here the non-custodial parent) entitled to disability insurance benefits under the Social Security Act. 42 U.S.C. § 402(d). Under the Iowa AFDC policy, Child’s Insurance Benefits are notJ considered “child support payments.” If Iowa treated the Child’s Insurance Benefits as “child support payments,” and “disregarded” them, then appellants’ accountable income would be reduced by $50 per month. Each appellant would therefore receive an additional $50 per month in AFDC benefits. Appellants contend that Iowa violates the Social Security Act by counting Child’s Insurance Benefits as family income, and thus shortchanges them by $50 per month.

After appellants began this action, Iowa joined Otis Bowen, Secretary of the United States Department of Health and Human Services (the “Secretary”), seeking indemnification for any judgment which might be entered against it. The district court1 entered an order granting appellants’ motion for class certification. The case was submitted to the district court on cross-motions for summary judgment. On December 18, 1986, the district court entered an order granting defendants’ motion for summary judgment. This appeal followed. We affirm.

II. DISCUSSION.

In determining the scope of 42 U.S.C. § 602(a)(8)(A)(vi), the child support disregard, we look first to its language. If the statutory language is unambiguous, in the absence of a “clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive." Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 2056, 64 L.Ed.2d 766 (1980). The language at issue here is “child support payments.” Unfortunately, Congress has not defined this term in the child support disregard, or anywhere else in the statutory scheme. Appellants nonetheless contend that the plain meaning of “child support payments” includes Child’s Insurance Benefits because, like child support, Child’s Insurance Benefits are attrib/utable to the work effort of the non-custo-jdial parent, and are used exclusively for the support and maintenance of that par-rent’s child or children. These factors, appellants assert, make Child’s Insurance Benefits payments indistinguishable from all other forms of child support.

Appellants’ argument goes too far, however. If accepted, it would expand the meaning of “child support payments” far beyond its contemporary denotation as a non-custodial parent’s legal obligation to contribute to the support and maintenance of the children. For example, proceeds from virtually any insurance or annuity program that are attributable in part to the work effort of the parent could be considered “child support,” once payment to the dependent children begins. Indeed, under appellants’ criteria, part of every parent’s income could be deemed “child support,” a result that would transform a carefully crafted legislative concept into a generality.

Other distinctions militate against appellants’ interpretation. Child’s Insurance Benefits are payable regardless of any legal obligation of the parent to pay child support.2 Child's Insurance Benefits are not calibrated to the needs of the child, nor are they based solely upon the non-custodial parent’s “income,” two typical determinants of a child support assessment. Though Child’s Insurance Benefits are in some sense “earned” by the parent, they are paid by the federal government. Because the duty to pay child support generally cannot be transferred to a third party, see 59 Am.Jur.2d, Parent and Child, § 71 *611(1987), it follows that payments made by a third party, even if earned in part by a parent, cannot be “child support payments” within the ordinary meaning of that term.

More importantly, we are persuaded that Congress recognized a distinction between “child support payments” and Child’s Insurance Benefits in other provisions of the AFDC program. The legislative history of 42 U.S.C. § 602(a)(38) — the revised AFDC family unit definition — speaks in terms of “Social Security benefits” and “child support” as separate and distinct sources of income. See, e.g., S.Rep. No. 494, 97th Cong., 2d Sess. 47, reprinted in 1982 U.S. Code Cong. & Admin.News 781, 823. In short, what guidance Congress has provided for this “plain meaning” analysis leads to the conclusion that “child support payments” and Child’s Insurance Benefits are not equivalent under the Social Security Act.

Appellants urge the application of Iowa law to determine what constitutes “child support payments.” Appellants point to Potts v. Potts, 240 N.W.2d 680 (Iowa 1976), and a raft of other cases to support their contention that Child’s Insurance Benefits are considered “child support payments” under Iowa law. Appellants construe the cases overbroadly, however. Our review indicates only that, under extenuating circumstances, some state courts find it equitable to treat Child’s Insurance Benefits as a substitute for child support payments. See, e.g., Potts, 240 N.W.2d at 681. Others have reached a contrary result. Nibs v. Nibs, 625 P.2d 1256 (Okla.1981); Fowler v. Fowler, 156 Conn. 569, 244 A.2d 375 (1968); Chase v. Chase, 74 Wash.2d 253, 444 P.2d 145 (1968). If Child’s Insurance Benefits simply were “child support payments,” the lengthy discourse on equity each of these courts engages in would be unnecessary.

Even if the case law were more persuasive, we would be hesitant to encroach upon the state’s traditional prerogatives to decide family law questions by determining what constitutes “child support payments,” particularly where no Iowa court has directly addressed the issue. We are also mindful that, when construing a federal statute, we must strive for an interpretation that will result in consistent application. The lack of consistency among state courts as to whether Child’s Insurance Benefits are “child support payments” confirms that the Social Security Act would have a varied and inconsistent meaning throughout the several states if we relied on state law. Accordingly, we decline to determine whether Iowa law includes Child’s Insurance Benefits within the definition of “child support payments,” and instead hold that Child’s Insurance Benefits do not fall within the plain meaning of “child support payments” as set out in the child support disregard. Nevertheless, bearing in mind the Supreme Court’s admonition that there is “no errorless test for identifying or recognizing ‘plain’ or ‘unambiguous’ language,” United States v. Turkette, 452 U.S. 576, 580, 101 S.Ct. 2524, 2527, 69 L.Ed.2d 246 (1981), we turn to the next signpost of statutory construction, the legislative history of the child support disregard.

Appellants claim that the legislative history of the child support disregard does not support Iowa’s decision to exclude Child’s Insurance Benefits from the definition of “child support payments.” However, the scant legislative history relating to the disregard leaves us without an inkling of Congress’ intent in defining “child support payments.” Under such circumstances, it is appropriate to consider “[o]ther statutes on the subject, previous to or contemporary with enactment of the statute being construed.” Sands, Sutherland Statutory Construction, § 48.03 (4th ed. 1984). The closest statutory reference in pari materia is an earlier form of the child support disregard, formerly codified in large part at 42 U.S.C. § 657 (1976). The legislative history of that statute leaves little doubt that the child support disregard was established to encourage AFDC recipients to assist the state in establishing paternity and collecting child support. See S.Rep. No. 1356, 93rd Cong., 2d Sess. 23, reprinted in 1974 U.S.Code Cong. & Admin.News 8133, 8155. The district court, after imputing the same purpose to the present statute, indicated that no such incentive is intended for *612AFDC recipients whose children receive Child’s Insurance Benefits, because the state is barred by law from collecting such benefits. We are persuaded by the district court’s reasoning. The problem addressed by the child support disregard is the collection of child support from absent parents. Child’s Insurance Benefits simply are not part of that problem.3

Our conclusion is supported by the Secretary’s interpretation of the child support disregard. Perhaps appreciating the complexity of the Social Security Act, Congress gave the Secretary broad authority to prescribe standards in applying its provisions. This conferral of authority recognizes that the Secretary is uniquely qualified to interpret provisions of the Social Security Act and also insulates his administrative interpretations from a judicial override, unless that interpretation is “manifestly contrary to the statute.” Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984). Here, the Secretary was required to define “child support payments,” while giving effect to related sections of the Social Security Act. These sections mandate (1) that “all child support payments” must be assigned to the state, 42 U.S.C. § 602(a)(26)(A), and (2) that Child’s Insurance Benefits cannot be assigned to any third party, such as the state, 42 U.S.C. § 407. In keeping with the rule that separate provisions of a single act must be construed as consistent with each other, Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 631-32, 93 S.Ct. 2469, 2484, 37 L.Ed.2d 207 (1973), the Secretary chose an interpretation which reconciles potentially inconsistent provisions of the Act by excluding Child’s Insurance Benefits from the definition of “child support payments.” While the Secretary has never specifically announced that Child’s Insurance Benefits are not “child support payments,” he has consistently maintained that only child support payments assigned to the state trigger the $50 disregard. A harmonious construction of the Act requires the Secretary to conclude that the term “child support payments”, as used in the child support disregard, does not include Child’s Insurance Benefits.4

Appellants dispute the Secretary’s reading of the statute by emphasizing language in the child support disregard which suggests the disregard of child support other than that assigned to, and collected by, the state under 42 U.S.C. § 657(b). The child support disregard provides that a state must:

* * * disregard the first $50 of any child support payments received in such month with respect to the dependent child or children in any family applying for or receiving aid to families with dependent children (including the support payments collected and paid to the family under a 457(b) [42 U.S.C.S. § 657(b)] * * *.

42 U.S.C. § 602(a)(8)(A)(vi). Appellants contend that the parenthetical language indicates that Congress intended to include unassignable Child’s Insurance Benefits within the meaning of “child support payments.” We disagree.

A more plausible explanation of the parenthetical language exists; one that gives the Social Security Act its most comprehensive and coherent meaning in light of the entire legislative scheme. See Clark v. Uebersee Finanz-Korporation, A.G., 332 U.S. 480, 488, 68 S.Ct. 174, 177, 92 L.Ed. 88 (1947). This explanation is found in regulations promulgated by the Secretary. See 45 C.F.R. §§ 233.20(a)(3)(v), 302.31(a)(3), *613303.80. Despite the imperative that all child support payments be assigned to the state, instances arise where child support payments are made directly to families despite assignment, or where child support payments are made before the assignment becomes effective. In response, the Secretary has issued regulations to guide the states in their treatment of these child support payments. These regulations establish alternative procedures by which the state can collect child support paid directly to the AFDC family. See 45 C.F.R. §§ 233.20(a)(3)(v), 302.31(a)(3), 303.80. They also show that the state can collect child support payments outside of 42 U.S.C. § 657(b), and thus provide a ready explanation for the parenthetical language in the amendment.

Appellants argue from these alternate procedures that the child support disregard should also apply to Child’s Insurance Benefits. This is no answer. Application of the child support disregard to support paid to a family before or despite an assignment is consistent with the requirement that child support be assigned, while application of the child support disregard to Child’s Insurance Benefits not assignable by law violates the assignability requirement. At bottom, appellants are unable to offer a persuasive alternative explanation that squares the language of the child support disregard with either the requirement that child support payments be assigned to the state, or the bar on assignment of Child’s Insurance Benefits.

III. CONCLUSION.

We are unpersuaded that Congress intended the words “child support payment” to apply to Child’s Insurance Benefits. Appellants, in essence, attribute to Congress an intent to bring provisions of the same statutory scheme into opposition with one another. We decline to make such an attribution in light of the plain meaning of “child support payments” and the Secretary’s credible and coherent construction of the child support disregard. Accordingly, the decision of the district court is affirmed.

. The Honorable William C. Stuart, Senior United States District Judge for the Southern District of Iowa.

. Child’s Insurance Benefits can be paid to a child living with his parents, or even after the parents’ death. Both are situations in which the obligation to pay child support does not exist.

. Appellants argue that the {50 incentive might encourage AFDC recipients to apply for Child's Insurance Benefits. The paternity determination made when awarding Child’s Insurance Benefits could then be used by the state to get a child support decree. We are not convinced Congress intended such an oblique application of the $50 incentive.

. This approach is borne out by 26 U.S.C. § 6402(c), which offsets past-due child support against a tax refund. The definition of past-due support in the pertinent federal regulations limits such support qualifying for offset to that support which is assignable to the state. 26 C.F.R. § 301.6402-5(b)(2)(i). Thus it appears that Congress has consistently recognized the need to distinguish "child support” from other sources of income, like Child's Insurance Benefits, which are not assignable to the state.