On appeal from Division of Public Welfare.
Deighan and Landau. Landau, J.A.D.
[224 NJSuper Page 2] This is an appeal by Angelica Saldana (Saldana) a recipient of benefits under the Aid to Families With Dependent Children (AFDC), from the refusal of the Director of the Division of
Public Welfare to reconsider and remand the denial of AFDC and related benefits.
Saldana's initial application for benefits was filed July 11, 1985, and denied on August 7, 1985 by the Essex County Welfare Board.
Following an appeal and hearing before an Administrative Law Judge pursuant to N.J.S.A. 52:14D-1 et seq. the ALJ recommended that the denial of benefits be affirmed. Saldana filed an exception which specifically requested a remand and reconsideration or reversal, because of her retroactive disqualification from unemployment benefits. The decision of the Administrative Law Judge was adopted by the Director of the Division of Public Welfare, without taking action to remand or reconsider, but noting Saldana's right to reapply for benefits on the ground of changed circumstances.
The only issues raised on appeal concern the effect of "newly discovered evidence" upon the outcome of the proceeding. As Saldana correctly argues, justice may require reconsideration of an earlier decision where newly discovered evidence would probably change the outcome if a new proceeding was ordered. See Quick Chek Food Stores v. Springfield Tp., 83 N.J. 438, 445 (1980).
At the time of the underlying rejection, and the proceeding before the Administrative Law Judge, Saldana's income reflected $452 per month in social security benefits for several of her minor children, and $168 per month in unemployment benefits. It is not controverted that this total of $620 per month exceeded by $33 the "unearned income" ceiling for AFDC eligibility. Subsequent to close of the record before the Administrative Law Judge, but prior to his decision, Saldana was advised by the Division of Unemployment and Disability Insurance that because her employer had incorrectly reported her wages, she was required to repay $819 plus interest, reflecting the amount of unemployment benefits she had received incorrectly.
Although Saldana's receipt of the unemployment benefits is not denied she contends that because she is obliged to repay that amount with interest, the $168 per month of unemployment benefits should now be reconsidered in calculating her unearned income for the months in which they were incorrectly paid. So recalculated, she would be rendered financially eligible for benefits, including Medicaid and food stamps.
Director argues that Aid to Families with Dependent Children (AFDC) is a joint federal-state program and that in determining eligibility, a state must comply with federal regulations as well as with its own state plan for AFDC. He correctly points out that under both federal and state regulations the definition of income for AFDC purposes basically embraces any funds not expressly excluded. The income which is expressly disregarded in AFDC eligibility computations is contained at 45 C.F.R. § 233.20(a)(3). Similar state provisions appear at N.J.A.C. 10:82-4.4 through 10:82-4.17. In the Director's view, even monies received which result in corresponding debt, must be considered "income" absent an express exclusion, and thus, the fact Saldana is obligated to repay the unemployment benefits is irrelevant in establishing her eligibility for AFDC.
Thus it is critical in this case to determine how the erroneous unemployment benefits should be characterized. If characterized as "income" and if Saldana's obligation to repay is ignored, then the State's argument may have merit.
Generally, unemployment benefits correctly paid would be considered "unearned income." However, the unusual circumstances in this case ...