In re K.S.

(Wis. Dep’t of Workforce Dev. Div. of Hearings & App. Sept. 16, 1996). ; Clearinghouse Number: 51596

Description

Bona Fide Loan Proceeds May Not Be Counted as Income or Resources for Determining AFDC Eligibility

Abstract

The Wisconsin Department of Workforce Development has adopted the hearing examiner’s decision that the county agency incorrectly determined that petitioner was overpaid $979 in AFDC benefits due to bona fide loan proceeds which caused her to exceed the asset limit. Petitioner received a loan from her parents of $1,000, which she deposited in a bank account. Relying on the AFDC Handbook policy, the county agency determined that client was overpaid because the loan put her over the $1,000 asset limit. Petitioner argued that under 45 C.F.R. § 233.20(a)(3)(iv)(B) (effective October 1, 1995) bona fide loans may not be counted as income or resources. Since this was a bona fide loan, it did not affect eligibility, and there was no overpayment. Agreeing, the hearing examiner also concluded that the AFDC Handbook provision stating that any loan proceeds available to an AFDC recipient which are available for current living expenses are considered available assets is contrary to 45 C.F.R. § 233.20(a)(3)(xxi) and void as a matter of law. Counsel notes that this appears to be the first successful decision in Wisconsin on the issue.

Additional Information

Attorney Information
Petitioner represented by Karen Roehl, Legal Services of Northeastern Wisconsin, 404 N. Main St., Suite 702, Oshkosh, WI 54901.
Docket Date
1996-09-16 00:00:00+00:00

Files

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