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Miller v. Essex County Welfare Board

Decided: June 24, 1977.

VALARIE MILLER, PLAINTIFF-APPELLANT,
v.
ESSEX COUNTY WELFARE BOARD ET AL., DEFENDANTS-RESPONDENTS



Matthews, Seidman and Horn.

Per Curiam

[151 NJSuper Page 281] Plaintiff, an employee of the Essex County Welfare Board since July 1969, and also a welfare recipient under the program of Aid to Needy Families and Dependent Children (AFDC) appeals from a judgment entered in the Essex County District Court dismissing her action to recover

the sum of $261.30 which the board had deducted from a retroactive pay increase to which she and other employees were entitled, upon a claim that the pay increase had produced an overpayment in welfare benefits.

In the Spring of 1974 plaintiff received part of the retroactive increase in the amount of $1503.16. The board sought to recoup the sum of $553, contending that under existing law it was required to make the deduction in cases of overpayment of benefits resulting from retroactive pay increases received by the client-employee. Plaintiff was notified that her entitlement to welfare benefits was being terminated. She sought and was accorded a fair hearing. It was determined that although a welfare board may adjust assistance allowances where additional income is received by a client, the adjustment would be contingent upon the availability of the money; and since the client here had spent all the money she had received, she could not be compelled to repay and for that reason her grant was improperly terminated.

Before the balance of the retroactive salary increase was scheduled to be paid in December 1974, plaintiff refused the board's request that she sign a reimbursement agreement and asked that she be terminated as a welfare recipient. The board cancelled the grant and also deducted from plaintiff's salary increase an alleged overpayment of $261.36. Plaintiff thereupon filed her complaint in county district court to recover that amount.

In dismissing the complaint the trial judge ruled that the board's action was supported by "[a] fair and reasonable extention of the holding of Redding v. Burlington Cty. Welf. Bd. , 65 N.J. 439 (1974)," in which the court held (at 446) that "under the New Jersey Assistance for Dependent Children Act and regulations a county welfare board has the right and power to recover overpayments in assistance, except in those cases where the overpayment was the result of administrative error." The trial judge found, further, that the board had not acted arbitrarily in its attempt to protect itself from the consequences of plaintiff's having requested the termination

of her grant, in that if the board had not made the deduction, it would have been forced to sue plaintiff at added cost and expense.

Plaintiff contends on appeal that (1) Redding is not applicable to her case since the moneys involved are salary and not welfare benefits and, at the time the welfare benefits were received, she was fully entitled to the amount thereof; (2) she was denied due process in not having received prior notice that the deduction would be made; (3) the repayment could be effected only by her authorization in signing a repayment agreement, and (4) the board's action was also contrary to N.J.S.A. 34:11-4.4, which forbids an employer to withhold or divert any portion of an employee's wages under required or empowered to do so by law.

It is questionable that Redding supports the board's action here in seeking recoupment of the claimed overpayment by means of a deduction from the retroactive pay increase to which plaintiff was entitled as an employee of the board. In Redding the overpayments for which recovery was sought had in each case resulted from a lack of knowledge on the part of the welfare board of the receipt of some type of income by the welfare recipient, or the possession by the recipient of assets which, if known by it, would have reduced or eliminated the monthly grant of public assistance. 65 N.J. at 442. The court said (at 443-444) that cases dealing with state provisions allowing recovery of overpayments of AFDC welfare assistance "uniformly support the right of the state to recoup such overpayments, provided the method of recovery does not diminish present or future AFDC grants below actual need (emphasis supplied). But the court emphasized that the case involved overpayments of assistance, i.e. , public money paid out in excess of that permitted by law, in which case the "mere receipt of such money can be said to create an obligation to repay, akin to the common law action in assumpsit for money had and received." Id. at 445.

The case of Bradford v. Juras , 331 F. Supp. 167 (D. Or. 1971), on which defendant also relies, is similarly inapposite.

There the plaintiff-recipient had received a lump-sum income tax refund and had failed to report it to the state welfare agency. The state reduced each grant by 10% in order to recover the funds in installments. The court held (at 169-170) that the state had the authority to "recover client-caused overpayments from ...


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