Jefferson v. Hackney
Headline: Welfare calculation upheld — Court affirms Texas’s percentage-reduction approach for AFDC, allowing the State to apply the percentage before outside income and to set lower benefit percentages without violating federal law.
Holding: The Court held that Texas may use its percentage-reduction method for AFDC benefits — applying the percentage before outside income is subtracted — and that these procedures do not violate the Social Security Act or the Fourteenth Amendment.
- Allows States to apply percentage reductions before subtracting outside income, reducing benefits for some working families.
- Permits different benefit percentages across programs (AFDC 75% vs aged 100%), leaving allocation decisions to States.
- Leaves policy trade-offs to state governments and political process, not the federal courts.
Summary
Background
A group of Texas recipients of Aid to Families With Dependent Children (AFDC) challenged the State’s method for computing welfare payments. Texas faces a constitutional ceiling on welfare spending and uses a percentage-reduction system to spread limited funds. Under Texas’s method the State first reduces the official “standard of need” by a fixed percentage and then subtracts any outside (nonexempt) income to set benefits; other States subtract income first and then apply the percentage. The plaintiffs argued this method shrinks eligibility and disadvantageously treats AFDC families, many of whom are black or Mexican-American, and they raised claims under the Social Security Act and the Fourteenth Amendment.
Reasoning
The Court explained that Congress left States considerable discretion to set standards and allocate limited AFDC funds, and that Rosado v. Wyman permits percentage-reduction systems so long as States expose standards of need. The majority found Texas had raised its standard of need to reflect cost-of-living changes and that its percentage-reduction method met the statutory objectives identified in Rosado. On equal protection and discrimination claims the Court accepted the district court’s factual findings that Texas’s choices were not shown to be racially motivated and were rational judgments about how to allocate scarce funds among different categorical programs.
Real world impact
The ruling allows Texas and similarly situated States to keep the Texas order of computation and different percentage levels across welfare programs (for example, AFDC at 75% versus other programs at higher percentages). The decision leaves policy choices about trade-offs between encouraging work, widening eligibility, and preserving benefits for those without income to state legislatures and administrators rather than to federal courts.
Dissents or concurrances
Dissenting Justices argued the Texas method reduces eligibility, penalizes work incentives, and disproportionately harms minority families, urging a broader reading of the Social Security Act to protect marginal recipients.
Ask about this case
Ask questions about the entire case, including all opinions (majority, concurrences, dissents).
What was the Court's main decision and reasoning?
How did the dissenting opinions differ from the majority?
What are the practical implications of this ruling?