Smith v. Concannon

CANBY, Circuit Judge:

In 1981, Congress enacted the “lump sum” rule that rendered recipients of Aid to Families with Dependent Children (“AFDC”) ineligible for AFDC benefits for a period of time after they receive a lump sum of money from outside sources. 42 U.S.C. § 602(a)(17). This appeal challenges Oregon’s application of that lump-sum rule to its Medicaid program.

Brenda Smith and her children were receiving AFDC benefits in May of 1989. During that month, Smith received a check for her daughter’s retroactive Social Security benefits in the amount of $3,285. Under the AFDC lump-sum rule,…