O'Dea v. Commissioner of Public Welfare

This appeal by the Department of Public Welfare (department) raises the following question: When a self-employed household member gradually depletes the inventory of his unprofitable business and makes cash withdrawals, how are such withdrawals treated for determining the household’s eligibility to obtain food stamps?

The department considered the withdrawals as income and determined that the plaintiff’s income exceeded the maximum allowable income limits. As a result, in 1977, and again in 1979 (after benefits had been resumed), the department terminated the plaintiff’s food stamp benefits.…