The issues involved are (1) whether the recent amendment to N.J.S.A. 44:10-4(a) excludes from reimbursement to the county welfare agency all compensatory damages awarded for a minor's personal injury and (2) if such awards are now exempt from reimbursement, should the statute be applied retroactively.
The court holds that the new statute prohibits welfare agencies from recouping welfare payments made to minors from tort claim proceeds for compensatory damages distributed after April 8, 1985.
These issues arise because the Essex County Division of Welfare demands that part of the net proceeds to be paid by defendant to the infant plaintiff be paid to it to recover payments of welfare assistance paid by it to the infant plaintiff.
From February 5, 1982 to April 1, 1985, welfare assistance of $2,884 was paid by the Essex County Division of Welfare to Pearl Hart on behalf of her infant daughter, Angelina Hart, under the Assistance for Dependent Children Act, N.J.S.A. 44:10-1 et seq. Nothing has been repaid.
This problem arose because the Legislature amended N.J.S.A. 44:10-4(a) on April 9, 1985, purporting to exclude from reimbursement compensatory damages awarded to an infant from a tortfeasor. L. 1985, c. 120, § 4.
On February 5, 1982, plaintiff Angelina Hart, then age 15, was a pedestrian when she was struck by an automobile owned and operated by defendant. She was hospitalized for ten days with various injuries, from which she has substantially recovered. She does, however, have a permanent disability as a result of a broken big toe, which she still cannot bend. As a
result of defendant's alleged negligence, plaintiff instituted this action.
A settlement was made between the infant plaintiff and defendant by which plaintiff received a gross amount of $8,500 with a net balance to her of $6,000 to be held by the Essex County Surrogate pursuant to N.J.S.A. 3B:15-16. This settlement was approved by the court subject to the claimed welfare lien.
The county became involved when it learned that the court had approved an infant's settlement subject to the county's claim for reimbursement of welfare payments.
The county does not question that this amendment to N.J.S.A. 44:10-4(a) purported to exclude from reimbursement to welfare agencies all compensatory damages awarded to an infant in a personal injury action despite the fact that the amendatory language is not totally clear, but it contends that it applies only to causes of actions which accrued after April 8, 1985 and for welfare payments made after the effective date of the amendment.
The Department of Human Services, the state agency which supervises and regulates welfare agencies, has taken this position and the Essex County Division of Welfare contends it is bound by the State's position.
The new statute, which became effective immediately, provides:
4. (a) Whenever any parent or relative with whom a child is living applies for or is receiving assistance for such child pursuant to this act, and it appears that there is pending entitlement to a payment to the child or to either or both his parents of funds arising from a claim or interest legally or equitably owned by such child or by either or both his parents, other than that portion of a personal injury award which a court specifically awards to a child to make him whole as a result of an injury, the county welfare agency may, as a condition of eligibility or continuation of eligibility for such assistance, require such parent or parents, or relative, to execute a written promise to repay, from the funds anticipated, the amount of assistance to be granted from the date of entitlement to such payment. [ N.J.S.A. 44:10-4(a)]
The statement to the original bill reads: