Indiana's social services agency illegally counts food stamps as income, resulting in a reduction of state benefits paid
to developmentally disabled people in a Medicaid waiver program, a lawsuit filed for an autistic Indianapolis man said Friday.
The suit is the latest in a wave of criticism bombarding the state's handling of benefits for its neediest residents,
which has drawn national scrutiny.
The federal government levied a $1.2 million penalty last month against the Family and Social Services Administration for
miscalculating food stamp benefits; the state has revamped its welfare intake system after firing IBM from a $1.3 billion
privatization contract in October; and the state has drawn fire from the federal government for not processing food stamps
in a timely manner.
In the latest development, the American Civil Liberties Union of Indiana says the FSSA cut 26-year-old Michael Dick's
monthly grocery benefit dollar-for-dollar under the Developmental Disabilities Waiver Program to offset increases in his food
Federal law states that food stamps "shall not be considered income or resources for any purpose under any Federal,
State or local laws, including … public assistance programs," and prohibits states from reducing any other public benefits
because of the receipt of food stamps, according to the lawsuit, filed by the ACLU in Marion County Superior Court.
U.S. Food and Nutrition Service spokesman Alan Shannon said Friday the agency was reviewing its policy to determine if any
laws might have been broken.
FSSA spokesman Marcus Barlow said the state agency typically counts food stamps when calculating other benefits, not just
for the disabilities waiver program. "We do that with our state programs," he said.
"We stand by the integrity of our program, and it is our responsibility as stewards as taxpayer dollars to make sure
they're used in the best way possible," he said.
The lawsuit seeks class-action status for all those in the waiver program. Barlow could not say how many people are enrolled
in the program.
The lawsuit asks a judge to issue a preliminary injunction to keep the state from counting food stamps as income. The suit
also wants a $200 monthly cap on grocery benefits — including food stamps — set aside, contending that it was
established without following state rulemaking guidelines. The suit says that cap has remained in effect for six years without
any cost-of-living adjustment.
Dick appealed to the agency after his grocery allowance was cut last year from $139 to a low of $101 per month, reflecting
increases in his food stamp benefits to a high of $99. But an administrative law judge ruled in the FSSA's favor in May.
The lawsuit called the agency's action "arbitrary, capricious, an abuse of discretion and/or contrary to law."