Knebel v. Hein

Background

A divorced woman with custody of two children received state help to attend a nurses’ training program. She had bought food stamps at a reduced price, but after the State paid her tuition and a $44 monthly transportation allowance, the allowance was counted as “income” and her food stamp charge rose by $12. She sued on behalf of others receiving similar allowances, and a three-judge District Court found the state and federal rules invalid and ordered refunds.

Reasoning

The Court asked whether the Food Stamp Act allowed the Secretary of Agriculture and the State to treat training and travel payments as income and whether doing so was constitutional. The Court explained the statute gives the Secretary broad authority to define household income and to set reasonable rules for the program. The regulations treat many monetary benefits, including training allowances, as income and allow a standard 10% deduction and a 30% cap on food stamp charges. The Court found the rules were a reasonable policy choice, justified by administrative limits and the need for uniform handling of varied expenses, and therefore within the Secretary’s authority and constitutional limits.

Real world impact

The decision reverses the District Court and leaves in place federal and state rules that let officials include transportation allowances when calculating food stamp prices. Low-income trainees and recipients of travel grants may pay more for food stamps, and some state training benefits will have reduced net effect. The ruling affirms agency discretion in setting uniform benefit rules.