Judge upholds Vermont “poor tax”

child in silhouette looks into a bowl
Judge upholds “poor tax”

The U.S. District Court for the District of Vermont dismissed a lawsuit November 9, filed by Vermont Legal Aid, which challenged a recent change to state welfare benefits as discriminatory against Supplemental Security Income recipients.

The lawsuit, filed in June, concerns how the state determines eligibility for Reach Up Assistance, the state’s program for temporary welfare benefits under the federal Temporary Assistance for Needy Families program.

Individuals receiving SSI, the federal government’s primary benefits program for low-income people with disabilities, are exempt from the TANF program, according to a Vermont Legal Aid news release. Accordingly, income from SSI benefits was previously excluded when determining eligibility for Reach Up Assistance.

The Vermont Legislature last spring changed this so that households receiving Reach Up Assistance would receive a $125 a month deduction if a household member is receiving SSI.

Stressing that SSI recipients aren’t even eligible for Reach Up Assistance, Vermont Legal Aid accused the legislature of enacting a “poor tax” and unfairly targeting people with disabilities, in violation of their equal protection rights. It also argued that recipients were not given adequate notice on the changes, in violation of their 14th Amendment procedural due process rights.

“Establishing a new countable income standard for Reach Up/SSI families essential amounts to a disability “tax” on certain households to help solve the budget shortfall,” Vermont Legal Aid wrote in a letter to the legislature in February [PDF]. “In the universe of possible taxes available respond to the budget crisis, taxing the poor households with family members who have a disability is surely among the least desirable – from a public policy perspective, from a budgetary perspective, and from a moral and philosophical perspective.”

In upholding the changes, the District Court found no evidence that the legislature intentionally discriminated against people with disabilities in enacting the change, noting that the state had a rational basis for its decision, namely its interest in budget savings. The Court also denied the procedural due process complaint.

“In an effort to achieve budgetary savings the Legislature has voted to decrease public aid to those families, resulting in what can only be further hardship for parents as they struggle to provide food and shelter for their children,” Judge William Sessions wrote in the decision. “While the Court is sensitive to the plight of these families, and acknowledges the efforts of Vermont Legal Aid on behalf of the plaintiff class, it finds no sound legal basis for maintaining the Plaintiffs’ claims.”