The Seventh Circuit decided Youakim v. McDonald in 1995 and set out rules for due process claims for welfare recipients when government agencies change program rules to reduce benefits or tighten eligibility.1 The following year Clearinghouse Review published “Due Process for Welfare Recipients Subject to Changing Program Rules: An Illinois Case Study,” which explained the Seventh Circuit’s decision in Youakim and proposed strategies for developing successful due process claims for such cases based on Youakim’s guidance.2
Since then, courts have examined additional situations in which program participants brought due process claims challenging their loss of benefits as a result of changing program rules. The courts have added context to the analysis, but the overall requirements for a successful “transitional due process” claim have remained the same.3
Here we review the recommendations from the 1996 article and analyze the status of these types of due process claims in light of court decisions since Youakim.
Advocates must carefully identify what the property interest at issue is and to whom it belongs.
Youakim v. McDonald
Youakim v. McDonald involved a change in Illinois policy governing foster care benefits for children placed with relative foster parents.4 Unlike nonrelative foster homes, relative caregivers did not have to be licensed to receive full foster care benefits on behalf of the child. So long as these relative homes passed a preliminary safety check, they were considered preapproved.5 These preapproved homes were required to meet substantially the same standards of safety, health, and welfare as licensed homes but did not have to go through the official licensure process.6 Although relative homes could become licensed, the Illinois Department of Children and Family Services and private child welfare agencies encouraged preapproved relative caregivers to skip the onerous licensing process; the relative caregivers would receive the same benefits regardless.7
The Illinois Department of Children and Family Services issued its Home of Relative Reform Plan (the Reform Plan) in 1995.8 The Reform Plan stated that the department would not pay full foster care benefits to any children living in unlicensed foster homes. The impact of the Reform Plan on children in relative foster care was significant and potentially devastating because a majority of these homes were not licensed. Based on the Reform Plan, children in preapproved homes would lose their foster care payments on July 1, 1995, whether or not their caregivers applied for licensure prior to that date. The benefits would be reinstated only after the home was able to obtain a license, and the affected child would not be entitled to recover the benefits lost in the interim.9
A class of foster children in relative foster homes challenged in federal court the procedures for implementing the benefits cutoffs.10 The children argued that they had a property interest in continued receipt of foster care benefits and that requiring their foster homes to complete a licensure process that typically took nine months in just a few weeks (the time between passage of the new law and July 1 of that year) was unfair and violated the due process clause. While the Illinois Department of Children and Family Services argued that any property interest was extinguished as of the effective date of the Reform Plan, the Seventh Circuit disagreed. Due process, the court reasoned, requires that once a property interest has been created by a state, the interest can be extinguished only by constitutionally adequate procedures—the state cannot defend against a due process challenge by arguing that the plaintiff’s property interest was rendered nonexistent by the state procedures being challenged.11
Since the plaintiffs were thus found to hold a protected property interest in continued receipt of their foster care benefits, the question then turned to the second part of a due process inquiry—what process is due before that interest can be extinguished?12 The Illinois Department of Children and Family Services relied on the U.S. Supreme Court decision in Atkins v. Parker to argue that the legislative process in enacting the Reform Plan constituted sufficient process under the Fourteenth Amendment.13 The Atkins Court held that the legislative process in amending the Food Stamp Act to change eligibility standards was sufficient process because the legislative initiative applied across the board and did not require the procedural fairness of individual eligibility determinations.14 In Youakim the Seventh Circuit distinguished Atkins on the grounds that Atkins involved an across-the-board change in the method of computing income for purposes of program eligibility; under no set of facts could any recipient avoid the impact of the change.15 Conversely, in requiring licensure to receive foster care benefits, the Reform Plan simply added another eligibility requirement that most unlicensed relative homes could meet if given a fair opportunity to do so. Unlike in Atkins, where no individual eligibility determination could prevent or alter the effect of the amendment to the Food Stamp Act, in Youakim an individual eligibility determination for the families would likely show that they could meet the licensure requirements of the Reform Plan.16
The property interest is in the benefit itself, not in the process for keeping it.
Following the Seventh Circuit’s decision in Youakim, the 1996 Clearinghouse Review article summarized several lessons and takeaways regarding transitional due process cases.17 Here we recount those lessons and takeaways.
First, advocates must carefully identify what the property interest at issue is and to whom it belongs. In Youakim the property interest at stake was the children’s continued receipt of foster care benefits. The relative caregivers had an interest only in being qualified to receive those benefits on behalf of the child; due to the law change, they were required to have a license, and thus their status was as applicants for a license. Since applicants for licenses do not yet have a license, they have no argument to a right to “continued” treatment as a licensed home. Only recipients of the benefits—the children—had a legitimate expectation of continued benefits protected by the due process clause.
Second, in Youakim the state argued that the law eliminated the “relative foster care program” and brought all of foster care into the licensure system. That framework fueled the argument that nobody, including the children, had rights to “continued” benefits in a new program. They had only the rights of applicants—rights that do not include continued receipt of benefits while procedures are running their course. In such situations, advocates must determine whether the program with which they are dealing was really eliminated when deciding whether to bring a due process claim. If a program is entirely eliminated, a claim to continuing benefits is impossible. Advocates must look beyond the names of programs to determine what, if anything, remains for recipients after the program change. If nothing remains, the program is eliminated and proving continuing eligibility is impossible. Thus the due process claim will not succeed. But if, as a practical matter, the benefits or services are the same as before but with some changes, as in Youakim, then advocates have a strong argument that beneficiaries can claim the due process right to continued benefits.
Third, advocates should determine whether a meaningful number of recipients are likely to establish continuing eligibility if they are accorded fair process prior to termination. A due process claim is more likely to succeed if something is to be gained from the process other than buying time before an otherwise inevitable cutoff. In Youakim both the district court and the court of appeals found it important that most, if not all, children would be able, if given the chance, to establish eligibility for a license.
Fourth, Youakim firmly established that effective dates of program changes are not part of the substantive definition of the property right but instead are part of the procedures for implementing the change. Program changes cannot simply eliminate benefits with an unrealistically tight effective date. Advocates should look to effective dates when building their cases because if the effective date does not give adequate opportunity for program recipients to establish continuing eligibility, then a suit may be advisable.
Fifth, the distinction between benefits cuts and eligibility changes is not dispositive to the success of a due process claim. Benefits cuts, as in Atkins, do not necessarily mean individualized process cannot determine that the recipient would still receive the benefit just as individualized process might with eligibility requirement changes. The important question is whether recipients can make a showing to avoid a negative impact on their benefits if they are accorded a fair chance to do so.