The opinion
Filed 1/31/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
DEBRA ABNEY,
Plaintiff and Appellant,
A164775
v.
STATE DEPARTMENT OF (San Francisco City & County
HEALTH CARE SERVICES et al., Super. Ct. No. CPF20517020)
Defendants and Respondents.
In 2018, the Social Security Administration notified appellant Debra
Abney that it would begin withholding almost $600 from her Social Security
payment each month to satisfy a debt she owed the IRS. The City and
County of San Francisco (the County) subsequently notified Abney that it
would consider the garnished money as income for the purposes of calculating
her eligibility for benefits under Medi-Cal, making her ineligible to receive
those benefits without a share of cost. Abney unsuccessfully sought writs of
administrative mandate and ordinary mandamus seeking to reverse that
decision, the trial court rejecting her argument that the tax garnishment was
not income “actually available to meet [her] needs” under the regulations
implementing the Medi-Cal program. We also reject the argument, and we
affirm.
1
BACKGROUND
Medicaid and Medi-Cal
Medi–Cal is California’s program under the joint federal-state program
known as Medicaid. (Welf. & Inst. Code, § 14000 et seq.) Medicaid provides
federal financial assistance to participating states to support the provision of
health care services to certain categories of low-income individuals and
families, including the aged, blind, and disabled, as well as pregnant women
and others. (42 U.S.C. § 1396 et seq.)
Because California has opted to participate in the Medicaid program
and receive federal matching funds, it must comply with all federal Medicaid
requirements. (Conlan v. Bontá (2002) 102 Cal.App.4th 745, 753.) Among
other things, the state must administer its Medicaid program through a plan
that has been approved by the federal Centers for Medicare and Medicaid
Services. (See 42 U.S.C. § 1396a; 42 C.F.R. §§ 430.10, 430.15(b) (2014);
Welf. & Inst. Code, § 14100.1.) Respondent, the California Department of
Health Care Services (Department), is the state agency that administers
Medi-Cal, but counties are responsible for eligibility determinations, subject
to the direction of the Department. (Welf. & Inst. Code, § 14100.1; Cal. Code
Regs.,1 tit. 22, § 50004, subd. (c).)
The federal Medicaid Act requires that a state plan must “include
reasonable standards . . . for determining eligibility for and the extent of
medical assistance under the plan which . . . provide for taking into account
only such income and resources as are, as determined in accordance with
standards prescribed by the Secretary [of Health and Human Services],
available to the applicant or recipient . . . .” (42 U.S.C. § 1396a(a)(17).) A
1 Further undesignated citations are to Title 22 of the California Code
of Regulations.
2
state’s “methodology to be employed in determining income and resource
eligibility for individuals . . . may be less restrictive, and shall be no more
restrictive” than the federal Medicaid standard. (42 U.S.C. § 1396a(r)(2)(A);
42 C.F.R. § 435.601(d).)
California offers several different Medi–Cal programs, including, as
relevant here, the Aged, Blind, and Disabled Federal Poverty Level Program
(ABD FPL) and the Aged, Blind and Disabled Medically Needy Program
(ABD MN). (42 U.S.C. §§ 1396a(a)(10)(A)(ii)(X), (a)(10)(C); Welf. & Inst.
Code, §§ 14005.7, 14005.40.) The ABD FPL program provides medical
coverage to eligible California residents with no share of cost, provided that
their “[c]ountable income, as determined in accordance with Section 1902(m)
of the federal Social Security Act (42 U.S.C. Sec. 1396a(m)), does not exceed”
certain limits. (Welf. & Inst. Code, § 14005.40, subd. (c)(1) see id. subd. (c).)
The ABD MN program allows individuals to receive Medi–Cal when their
income exceeds the limits for the ABD FPL program. (See Welf. & Inst. Code,
§§ 14005.7; 14005.) However, under the ABD MN program, recipients are
required to pay a share of cost if they incur medical expenses in a given
month. (Welf. & Inst. Code, §§ 14005.7, subds. (b), (c); 14005.9.)
Under California’s Medi–Cal regulations, “Income includes benefits in
cash or in kind” from various sources, but income “shall be considered as
income only if it is currently available in accordance with Sections 50513
through 50517.” (Cal. Code Regs., tit. 22, § 50501, subds. (a), (b).) The
referenced regulations provide that “[o]nly income which is actually available
to meet the needs of a person or family shall be considered in determining
that person’s or family’s share of cost,” and similarly, “[i]ncome which is not
available to meet current needs of a person or family shall not be considered
3
in determining that person’s or family’s share of cost.” (Cal. Code Regs.,
tit. 22, § 50513, subd. (a); Cal. Code Regs., tit. 22, § 50515, subd. (a).)
Abney’s Medi–Cal Benefits
Since at least November 1, 2011, Abney has been receiving Medi–Cal
benefits—initially through the ABD FPL program—for a household of one.
On November 2, 2018, the Social Security Administration sent Abney
an award letter informing her that it would begin withholding $598.20 from
her monthly Social Security payment “to pay your debt to the IRS,” leaving
her with a monthly Social Security payment of $845.80.
On March 19, 2019, the County sent Abney a “Notice of Action,”
informing Abney that her Medi–Cal share of cost had changed to $729 per
month beginning April 1, 2019. The County determined that Abney had
gross unearned income of $1,484.50, and after an income deduction of $155
and a $230 disregard, a net non-exempt income of $1,099, exceeding the ABD
FPL income limit of $1,041, and making her ineligible for that program.
However, the County calculated that Abney was eligible for “Regular Medi–
Cal” with a $729 monthly share of cost, based on an income deduction of
$155.50 and a “maintenance need” of $600.
On June 10, Abney requested an administrative hearing on the Notice
of Action. Abney submitted a statement of position, arguing that the $598.20
withheld from her Social Security payment was not “income which is actually
available to meet [her] needs” within the meaning of section 50513,
subdivision (a), and should not have been included in determining her Medi–
Cal eligibility. A hearing was held on September 26, and on December 3, the
administrative law judge denied Abney’s claim, relying on Title 20, section
416.1123, subdivision (a)(2) of the Code of Federal Regulations, which
provides: “We also include more [of your unearned income] than you actually
4
receive if amounts are withheld from unearned income because of a
garnishment, or to pay a debt or other legal obligation, or to make any other
payment such as payment of your Medicare premiums.”
The Proceedings Below
On February 13, 2020, Abney filed in San Francisco County Superior
Court a combined petition for writ of administrative mandate under Code of
Civil Procedure sections 1094.5 and ordinary mandamus under Code of Civil
Procedure section 1085. Abney alleged that the County violated its legal duty
to determine her Medi–Cal eligibility by failing to comply with the California
regulations defining available income.
On December 1, 2020, while her case was pending in the trial court,
Abney again became eligible to receive Medi-Cal under the ABD FPL
program after the Legislature raised the income limits for that program.
Abney maintains, however, that because of the County’s erroneous eligibility
calculation, she was required to pay $135 per month in Medicare premiums
from April 2019 through November of 2020.
On February 10, 2022, the trial court denied the petition for writ of
mandate, concluding as follows:
“[T]he State Plan and the Welfare and Institutions Code both state that
‘countable income’ is determined in accordance with section 1902(m) of the
Medicaid statute, codified at 42 U.S.C. section 1396a(m). (See California
State Plan, Supplement 8a to Attachment 2.6, at p. 6; Welf. & Inst. Code sec.
14005.40.) The federal Medicaid statute, in turn, defers to the Social
Security Act’s definition of ‘income.’ (See 42 U.S.C. sec. 1396a(m),
referencing 42 U.S.C. sec. 1382a; see also Welf. & Inst. Code sec. 14005.7
[income under the Medically Needy program is ‘determined, defined, counted,
and valued, in accordance with Title XIX of the federal Social Security Act’].)
5
‘Unearned income’ is expressly defined in the federal Social Security
regulations to include amounts withheld to pay a debt. (20 C.F.R. § 416.1123
[‘We also include more than you actually receive if amounts are withheld
from unearned income because of a garnishment, or to pay a debt or other
legal obligation’]; see also Cervantez v. Sullivan (9th Cir. 1992) 963 F.2d 229,
232 [‘we followed four other circuits in holding the word “received” is used in
subsection (a)(2)(B) as a “mere grammatical link,” and does not require that
funds be physically received by claimants to be counted as “income” ’].)
“Additionally, pursuant to its statutory authority under Welfare and
Institutions Code sections 14005.40 and 14001.11, the Department provides
guidance to counties regarding Medi-Cal eligibility. The Department has
recently advised counties on this precise issue, consistently instructing them
that, pursuant to the above-mentioned rules, income garnished by the IRS for
tax debt should be counted when determining Medi-Cal income eligibility.
(Pet. RJN, Ex. 24; Hennessy Decl., ¶ 2, Ex. 1.)”
Abney filed a notice of appeal.
DISCUSSION
Introduction
The only issue on appeal is whether the County erred in including the
$598.20 garnished each month from Abney’s Social Security benefit to pay
her debt to the IRS as “income” for the purposes of calculating her eligibility
for the ABN FPL program. Because the facts are undisputed, we review this
pure question of law de novo. (See Cassidy v. California Board of
Accountancy (2013) 220 Cal.App.4th 620, 627.)
Abney does not dispute that under federal Medicaid regulations, the
garnishment counts as income in determining her Medicaid eligibility. (See
20 C.F.R. § 416.1123.) Rather, she argues that California’s Medi–Cal
6
regulations—in particular California Code of Regulations, Title 22, sections
50513 and 50515, requiring that income be “actually available to meet [her]
needs” in order to be considered—have set up a less restrictive income
definition than the federal standard, a less restrictive standard that requires
excluding the garnishment from her income.
The Department offers several arguments why the garnishment should
be included in Abney’s income. It points to the statement, in both the statute
defining eligibility for the ABN FPL program and the state Medicaid plan,
that “[c]ountable income” is “determined in accordance with section 1902(m)
of the federal Social Security Act (42 U.S.C. Sec. 1396a(m)) . . . .” (Welf. &
Inst. Code, § 14005.40, subd. (c)(1); see id., § 14005.7, subd. (c) [“monthly
income” for the ABD MN program is “determined, defined, counted, and
valued” under Title XIX of the federal Social Security Act].)2 And the
Department argues that the state regulations apply to the share of cost
calculation for the ABD MN program, not to eligibility determinations; that
the regulations do not apply at all to the ABD FPL program; and that even
under the regulations, income withheld as a tax garnishment is “available” to
meet Abney’s needs. We agree with this last argument, and on that basis
affirm the trial court’s order. Before explaining why, we first consider the
issue of our standard of review, specifically, how much, if any, deference must
we pay to the Department’s interpretation of the regulations.
2 We granted the Department’s unopposed request to take judicial
notice of Supplement 8a to Attachment 2.6–A of California’s Medicaid State
Plan, titled “Methodologies for Treatment of Income That Differs from Those
of the SSI . . . Program,” which sets eligibility requirements based on
“[c]ountable income, as determined in accordance with Section 1902(m) of the
[federal Social Security] Act.”
7
The question was exhaustively discussed in the leading case of Yamaha
Corporation of America v. State Board of Equalization (1998) 19 Cal.4th 1, 6–
11 (Yamaha), and also by this court, including in State Building &
Construction Trades Council of California v. Duncan (2008) 162 Cal.App.4th
289, 302–306 (Duncan), Pacific Gas and Electric Company v. Public Utilities
Commission (2015) 237 Cal.App.4th 812, 839–840, and Christensen v.
Lightbourne (2017) 15 Cal.App.5th 1239, 1251–1252.3 As applicable here,
Yamaha said this:
“[T]wo broad categories of factors relevant to a court’s assessment of
the weight due an agency’s interpretation [are] [t]hose ‘indicating that the
agency has a comparative interpretive advantage over the courts,’ and those
‘indicating that the interpretation in question is probably correct.’ ”
(Yamaha, supra, 19 Cal.4th at p. 12.) “In the first category are factors that
‘assume the agency has expertise and technical knowledge, especially where
the legal text to be interpreted is technical, obscure, complex, open-ended, or
entwined with issues of fact, policy, and discretion. A court is more likely to
defer to an agency’s interpretation of its own regulation than to its
interpretation of a statute, since the agency is likely to be intimately familiar
3 We began our discussion in Duncan with this paragraph: “The broad
question of the deference due to administrative decisions has perplexed some
of our best judicial minds. (See maj. opn. of Brown, J. and the conc. opn. of
Mosk, J., in Yamaha, [supra,] 19 Cal.4th [at p. 15] [citing, e.g., Wilkinson v.
Workers’ Comp. Appeals Bd. (1977) 19 Cal.3d 491, (Tobriner, J.); Culligan
Water Conditioning v. State Bd. Of Equalization (1976) 17 Cal.3d 86
(Sullivan, J.); Whitcomb Hotel, Inc. v. Cal. Emp. Com. (1944) 24 Cal.2d 753
(Traynor, J.); Bodinson Mfg. Co. v. California E. Com. (1941) 17 Cal.2d 321
(Gibson, C.J.)]; see also Dare v. Bd. of Medical Examiners (1943) 21 Cal.2d
790, 803 (conc. & dis. opn. of Traynor, J.); Laisne v. Cal. St. Bd. of Optometry
(1942) 19 Cal.2d 831, 848 (dis. opn. of Gibson, C.J.).) . . .” (Duncan, supra,
162 Cal.App.4th at p. 302.)
8
with regulations it authored and sensitive to the practical implications of one
interpretation over another.’ [Citation.]” (Ibid.) The second group of
factors—those suggesting the agency’s interpretation is likely to be correct—
“includes indications of careful consideration by senior agency officials (‘an
interpretation of a statute contained in a regulation adopted after public
notice and comment is more deserving of deference than [one] contained in an
advice letter prepared by a single staff member’ [citation]), evidence that the
agency ‘has consistently maintained the interpretation in question, especially
if [it] is long-standing’ [citation] . . . , and indications that the agency’s
interpretation was contemporaneous with legislative enactment of the
statute being interpreted.” (Yamaha, supra, 19 Cal.4th at p. 13.)
In support of its opposition to Abney’s petition, the Department
submitted a declaration from Brooke Hennessy, a Staff Services Manager II
in the Policy Development Branch of the Medi–Cal Eligibility Division of the
Department. According to Hennessy, “[f]rom 2018 to the present, the
Department has advised counties on four separate occasions that taxes,
garnishments, and liens are considered ‘available income’ for purposes of
Medi–Cal eligibility, and that the definition of ‘income’ relies on the federal
social security regulations, codified at 20 CFR 416.1123.” Hennessy’s
declaration also attached four emails from various employees of the Medi-Cal
Eligibility Division in response to questions from various California counties,
advising that tax withholding or tax garnishments should be considered
“available income” for the purpose of calculating Medi-Cal eligibility.
The relevant factors in the first category under Yamaha—those
assuming the agency has expertise and technical knowledge—counsel in
favor of limited deference to the department’s interpretation of the language
of sections 50513 and 50515. Determining whether the phrase “actually
9
available to meet the needs of a person” includes income garnished to satisfy
a tax debt does not require expertise or technical knowledge; indeed, Abney’s
argument that it does not is based on dictionary definitions. The regulations
are not “technical, obscure, complex, open-ended, or entwined with issues of
fact, policy, and discretion.” (Yamaha, supra, 19 Cal.4th at p. 12; see De La
Torre v. California Horse Racing Board (2017) 7 Cal.App.5th 1058, 1071
(De La Torre).) Although issues of fact or policy necessarily motivated the
Legislature and the Department in deciding whether to consider tax
withholding available income, these fact and policy issues have nothing to do
with the interpretation of the regulations themselves.
The factors in the second category— those suggesting the agency’s
interpretation is likely to be correct—also counsel in favor of limited
deference to the Department’s interpretation. There is no indication that the
interpretation was adopted after careful consideration by senior agency
officials. As the Department concedes, the interpretation was not adopted
after public notice and comment. And the interpretation appears in only a
handful of emails prepared by single staff members, emails that contain little
in the way of discussion or analysis. Although sections 50513 and 50515
were last updated in 1986 and 1987 respectively, the first email provided by
the department evidencing its interpretation is from 2018, some 32 years
later.4
4 We granted the Department’s unopposed request to take judicial
notice of a May 2, 1985 All-County Welfare Directors Letter from the
Department, providing that “[a]s a result of the clarified definition of earned
income under [The Deficit Reduction Act of 1984] . . . counties shall no longer
subtract mandatory payroll deductions from gross earned income. This
applies to all AFDC-MN cases (including those in which a stepparent’s
income or the income of an ABD-MN is used), the medically indigent
10
In short, while we consider the Department’s interpretation of the
regulations, we extend that interpretation only limited deference. We
nevertheless conclude that the Department’s interpretation is correct.5
pregnant woman and the medically indigent child.” The Department cites
this letter as evidence that “since 1985, because of a contemporaneous change
in federal regulations, California has consistently treated tax withholdings as
available income.” But it is unclear whether the policy set forth in letter
applies to the ABD FPL program at issue here. In any event, the letter does
not mention, much less interpret, sections 50513 or 50515, and so is of
limited value in demonstrating the longstanding nature of the Department’s
interpretation of those regulations.
5 Abney also argues that the Department’s interpretation is “void” for
failure to comply with the Administrative Procedure Act (APA) (Gov. Code,
§ 11340 et seq.). But the APA’s rulemaking requirements apply only to
regulations, and “[i]t is not at all clear that an agency’s interpretation of its
own regulation constitutes a regulation itself. A regulation ‘interpret[s] . . .
the law enforced or administered’ by the agency. (Gov. Code, § 11342.600.) It
could be argued that ‘the law enforced or administered’ by the agency does
not include the agency’s own regulations, but only the governing statute.”
(Missionary Guadalupanas of Holy Spirit Inc. v. Rouillard (2019) 38
Cal.App.5th 421, 434.)
Even assuming, however, that the Department was required to, but did
not, comply with the APA in interpreting the regulations, this means only
that we do not accord the interpretation any special deference. But we can
still adopt it as our own. (See Alvarado v. Dart Container Cororation of
California (2018) 4 Cal.5th 542, 558 [interpretation adopted without APA
compliance “should not be afforded any special weight or deference, but it is
nonetheless something a court may consider, and assuming the court is
persuaded that the agency’s interpretation is correct, the court may adopt it
as its own”]; Malaga County Water District v. Central Valley Regional Water
Quality Control Board (2020) 58 Cal.App.5th 418, 443 [“the penalty for
adopting a void regulation is not a complete rejection of an agency’s actions,
but the elimination of any deference to the choice supporting that action”].)
11
The Tax Garnishment Is “Actually Available” to Meet Abney’s
Needs Under Sections 50513 and 50515
“Rules governing the interpretation of statutes also apply to
interpretation of regulations. [Citation.] ‘In interpreting regulations, the
court seeks to ascertain the intent of the agency issuing the regulation by
giving effect to the usual meaning of the language used so as to effectuate the
purpose of the law, and by avoiding an interpretation which renders any
language mere surplusage.’ ” (Diablo Valley College Faculty Senate v. Contra
Costa Community College Dist. (2007) 148 Cal.App.4th 1023, 1037.) “We do
not construe a regulation in isolation, but instead read it with reference to
the scheme of law of which it is a part, so that the whole may be harmonized
and retain effectiveness. (Spanish Speaking Citizens’ Foundation, Inc. v. Low
(2000) 85 Cal.App.4th 1179, 1214.)” (De La Torre, supra, 7 Cal.App.5th at
p. 1066.)
Abney has not pointed us to, nor have we found, any cases interpreting
the “actually available” language of sections 50513 or 50515. But in
considering whether income garnished to pay a tax debt is “actually available
to meet the needs of a person” under section 50513, we take guidance from
the Supreme Court’s decision in Heckler v. Turner (1985) 470 U.S. 184
(Heckler), which considered a similar question: whether income tax
withholding should be included in “any . . . income and resources” of the
family claiming aid under the Aid to Families with Dependent Children
(AFDC) program. Before 1981, the statute required the state agency to
exclude from income any “expenses reasonably attributable to the earning of
any such income”; but in 1981 this provision was eliminated and replaced
with a flat $75 “work expense” deduction or “disregard” to be taken from an
individual’s “earned income.” (Id. at p. 186–187.) The Supreme Court
12
concluded that mandatory tax withholding should be considered “income”
under the statute, with the following explanation:
“[T]he principle of actual availability has not been understood to
distinguish the treatment of tax withholdings from that of other work
expenses. Rather, it has served primarily to prevent the States from
conjuring fictional sources of income and resources by imputing financial
support from persons who have no obligation to furnish it or by overvaluing
assets in a manner that attributes nonexistent resources to recipients.
[¶ . . . [¶]
“This Court, too, has viewed the actual availability principle ‘clearly
[to] comport with the statute,’ [citation], and has not hesitated to give it effect
in that case and others. [Citations.] But the Court’s cases applying the
principle clearly reflect that its purpose is to prevent the States from relying
on imputed or unrealizable sources of income artificially to depreciate a
recipient’s need. . . .
“The failure of the federal agencies administering AFDC to apply the
availability principle to distinguish mandatory tax withholdings is not
surprising. The sums they consume are no less available for living expenses
than other sums mandatorily withheld from the worker’s paycheck and other
expenses necessarily incurred while employed. . . . [S]ums mandatorily
withheld for obligations such as union dues, medical insurance, or retirement
programs no more pass through the wage earner’s hands than do mandatory
tax withholdings. Insofar as the Court of Appeals’ definition pivots on
availability to meet family expenses, any distinction between various species
of payroll withholdings would be ‘metaphysical indeed.’ [Citation.] Likewise,
the expenditure of funds on other work-related expenses, such as
transportation, meals, and uniforms, just as effectively precludes their use for
13
the needs of the family. That they first pass through the wage earner’s hands
is a difference of no apparent import: ‘the time of payment seems . . . but a
superficial distinction; all necessary expenses must be met sometime.’
[Citation.] There is no reason, then, why the actual availability principle,
once applied to exclude mandatory tax withholdings from the definition of
income, would not similarly apply to other mandatory payroll withholdings
and other standard work expenses, both of which also render a portion of a
wage earner’s income unavailable to meet the recipient family’s needs. Yet
this would negate Congress’ enactment of the flat-sum work-expense
disregard in 1981. The failure of the Court of Appeals to outline a principled
limit to the applicability of the availability principle to sums deducted from
gross income is telling.” (Heckler, supra, 470 U.S. at pp. 200–202,
fn. omitted.)
In sum, the actual availability principle does not distinguish between
income that is required to be used for work-related expenses and that which
is available for the recipient to spend, but rather between income that
actually exists, as opposed to income that is assumed or imputed. Income is
“actually available” even if it never passes through the wage earner’s hands.
So, income mandatorily withheld to pay taxes, or as here, garnished to satisfy
a tax debt, is nevertheless “actually available” to the recipient.
More recently, in Christensen v. Lightbourne (2019) 7 Cal.5th 761
(Christensen), our Supreme Court considered a similar question to that
presented here: whether a household member’s income that is used to pay
child support for a child living in another household counts as income
“reasonably anticipated” to be “received” by the paying household within the
meaning of Welfare and Institutions Code section 11265.2 for purposes of
determining eligibility for state welfare benefits under the CalWORKs
14
program. (Christensen, supra, 7 Cal.5th at p. 766.) As indicated, Christensen
came through our court, and we held that it did. The Supreme Court
affirmed our judgment, concluding that the agency’s determination that such
income should be counted was reasonable. Doing so, the court rejected the
argument that because the income was not “actually available” to meet the
recipient’s needs it should not be considered, relying in part on Heckler:
“Christensen argues that the funds used to pay Bruce’s child support
obligations cannot constitute ‘income’ to her household because her family
can never actually receive or benefit from those funds, and therefore the
funds are not ‘reasonably anticipated’ to be ‘received’ within the meaning of
[Welfare and Institutions Code] section 11265.2. Because the money used to
pay child support is not actually available to her household, Christensen
contends, that money cannot be counted as part of ‘the family’s income’ for
purposes of calculating CalWORKs aid. ([Welf. & Inst. Code,] § 11450,
subd. (a)(1)(A).) We find this argument unpersuasive.
“In Heckler[, supra,] 470 U.S. 184 . . . , the high court explained that
the principle of actual availability ‘traces its origins to congressional
consideration of the 1939 amendments’ to the Social Security Act, during
which legislators expressed concern that state agencies might assume
financial assistance from potential sources (e.g., a recipient’s children) who
might not actually contribute. (Heckler, at p. 200.) The requirement that
income be actually available prohibits states from ‘conjuring fictional sources
of income and resources by imputing financial support from persons who
have no obligation to furnish it or by overvaluing assets in a manner that
attributes nonexistent resources to recipients.’ (Ibid.) This policy was
endorsed by federal agencies administering the former AFDC program.
(Id. at pp. 200–201.)
15
“We recognized a comparable principle in Cooper v. Swoap (1974)
11 Cal.3d 856 (Cooper), where we held that treating ‘ “noncash economic
benefits,” ’ such as shared housing, as ‘ “income” ’under the former AFDC
program was invalid. (Id. at p. 859.) We explained that ‘under the governing
provisions of the federal Social Security Act only a recipient’s actual available
income may be deducted from his basic welfare benefit; arbitrary or
constructive “presumptions” of income are not permissible.’ (Id. at p. 870; see
Waits v. Swoap (1974) 11 Cal.3d 887, 894–895 (Waits) [only the ‘ “actual
value of housing and utilities benefits received could possibly constitute
income to the recipient” ’ (quoting Cooper, at p. 870)]; Mooney v. Pickett
(1971) 4 Cal.3d 669, 680 (Mooney) [concluding that a county regulation
denying general assistance to ‘employable’ single men was invalid because
‘theoretical employability is a barren resource; it is inedible; it provides
neither shelter nor any other necessity of life’].)
“The agency in Cooper and Waits assigned ‘a fictional value’ to benefits
received by a recipient rather than attempting to measure the ‘actual value of
the benefits received.’ (Waits, supra, 11 Cal.3d at p. 890; see Cooper, supra,
11 Cal.3d at p. 870.) Here, by contrast, the child support payments garnished
from Bruce’s income were not ‘fictional,’ ‘theoretical,’ or merely ‘ “imputed.” ’
(Heckler, supra, 470 U.S. at p. 200; Cooper, supra, 11 Cal.3d at p. 870;
Mooney, supra, 4 Cal.3d at p. 680.) Bruce received actual income—his wages
plus his unemployment insurance benefits—from which child support
payments were deducted. The circumstances here do not involve ‘imputing
financial support from persons who have no obligation to furnish it or by
overvaluing assets in a manner that attributes nonexistent resources to
recipients.’ (Heckler, supra, 470 U.S. at p. 200.)” (Christensen, supra,
7 Cal.5th at pp. 773–774.)
16
Here, as in Christensen, the $598.20 garnished from Abney’s Social
Security income to pay the IRS is “not ‘fictional,’ ‘theoretical,’ or merely
‘ “imputed,” ’ ” and “[t]he circumstances here do not involve ‘imputing
financial support from persons who have no obligation to furnish it or by
overvaluing assets in a manner that attributes nonexistent resources to
recipients.’ (Heckler, supra, 470 U.S. at p. 200.)” (Christensen, supra,
7 Cal.5th at p. 774.)
While Abney’s tax garnishment is “actually available” income as that
term has been understood under Heckler and Christensen, the regulation
further requires that it be “actually available to meet the needs of a person.”
We conclude that the garnished money is available to meet Abney’s needs
because it benefits her financially by helping to extinguish her debt to the
IRS, a point on which we find Martin v. Sullivan (9th Cir. 1991) 932 F.2d
1273 (Martin) instructive. There, Martin received monthly survivor benefits
from the Railroad Retirement Board, neglected to report additional income,
and the Board ultimately began withholding a certain sum from her Social
Security benefits to recover the prior overpayments. (Id. at p. 1274.) The
Ninth Circuit rejected the argument that the withholding was not “income” to
Martin under the statutory definition of “income” as “payments received as an
annuity, pension, retirement or disability benefit . . . .” (id. at p. 1275),
concluding the withholding was available income: “In the present case,
however, the Railroad Retirement Act (RRA) benefits being withheld by the
Board—recouped or unrecouped, apportioned or unapportioned—are solely
for Martin. The underlying debt to the Board represents overpaid benefits
that aided Martin. Moreover, the Board’s withholding of the amount to
recover the RRA overpayment actually benefitted her by extinguishing an
outstanding debt. Thus, because Martin’s income is used to pay off her
17
obligation and because she is benefitting financially from the satisfaction of
the debt, the RRA sums being withheld to recover the overpayment are to be
considered available income. See also Lyon v. Bowen [(5th Cir. 1986)]
802 F.2d at 797.” (Martin, supra, 932 F.2d at p. 1276.)
The same logic applies here. Abney’s income is being used to pay off
her obligation to the IRS—which she is legally required to do and from which
she benefits financially—and thus the income is considered available to meet
her needs within the meaning of sections 50513 and 50515. Like making
child support payments, satisfying Abney’s tax obligations to the IRS is
properly considered one of her needs. (See Emerson v. Steffen (8th Cir. 1992)
959 F.2d 119, 121–122 [“[I]ncome which has been paid out in child support
cannot later be ‘used’ or ‘availed of’ to pay another bill, but neither can
income which has been paid out for groceries. Although maybe different in
kind, the two are both obligations of the person making the payments . . .
[o]ne could reasonably argue that supporting his children is one of the payor’s
needs”]; Peura By and Through Herman v. Mala (9th Cir. 1992) 977 F.2d 484,
491 [“If child support is considered a need of the payor, and arguably it is,
then the Secretary may attribute the money as income to both the payor and,
in due course, the payee”].)
Finally, Abney argues that the tax garnishment is unavailable income
under section 50515, subdivision (a), which provides that “[u]navailable
income includes, but is not limited to,” portions of the following types of
income, provided that they meet certain criteria: (1) “Worker’s Compensation
and other public or private insurance settlements,” (2) “a contribution . . .
[f]rom a person living in the household,” (3) “monthly income of a medically
needy person residing in a licensed board and care facility,” and (4) “[a]n
advance or a reimbursement from an employer to cover expenses necessary
18
for job performance.” (Cal. Code Regs., tit. 22, § 50515, subd. (a).) The tax
garnishment at issue plainly does not fall into any of these categories.
Moreover, as Abney argues, each of the examples “share ‘a unifying trait’—
income that is beyond a person’s control and unavailable to meet their
needs.” That is not the situation here.
DISPOSITION
The order is affirmed. In the interests of justice, each side shall bear
its own costs. (Cal. Rules of Court, rule 8.278(a)(5).)
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_________________________
Richman, J.
We concur:
_________________________
Stewart, P.J.
_________________________
Miller, J.
Abney v. State Department of Health Care Services (A164775)
20
Trial Court: San Francisco County Superior
Court;
Trial Judge: Honorable Suzanne Ramos Bolanos;
Attorney for Plaintiff and Western Center on Law & Poverty,
Appellant, Debra Abney: David Kane, Robert D. Newman,
Richard A. Rothschild; Bay Area
Legal Aid, Michael Keys;
Attorney for Defendants and Rob Bonta, Attorney General of
Respondents, State Department of California, Cheryl L. Feiner, Senior
Health Care Services et al.: Assistant Attorney General,
Gregory D. Brown, Charles J.
Antonen, Supervising Deputy
Attorneys General, Katherine J.
Grainger, Deputy Attorney General.
Attorney for Respondent City and
County of San Francisco: David Chiu, City Attorney, Wayne
Snodgrass, Tara M. Steeley Deputy
City Attorneys
21