APPEAL from the Circuit Court of Cook County; the Hon. WALTER
P. DAHL, Judge, presiding.
MR. PRESIDING JUSTICE DIERINGER DELIVERED THE OPINION OF THE COURT:
Rehearing denied May 26, 1972.
This class action was brought in the Circuit Court of Cook County by plaintiff welfare families under 42 U.S.C. § 1983 for declaratory judgment, injunctive and other relief to implement 42 U.S.C. § 602 (a)(23) [402 (a)(23) of the Social Security Act], a 1968 amendment to the Social Security Act which provided a cost-of-living adjustment effective July 1, 1969, for recipients of Aid to Families with Dependent Children (AFDC). Release of benefits alleged to be wrongfully withheld by defendants was also sought. On August 30, 1971, the court entered a decree awarding the plaintiff class retroactive AFDC payments. Defendants appeal from that portion of the judgment. The decree also provided that the adjustment of the Illinois Department of Public Aid's (IDPA) shelter maximum from $90 to $97 was correct rather than the increase of $90 to $100 asked for by the plaintiffs. The plaintiffs cross appeal from this portion of the judgment.
The State of Illinois is voluntarily taking part in the AFDC program of the Social Security Act, 42 U.S.C. § 601 et seq. On September 1, 1963, Illinois established a $90 per month maximum on the shelter allowance any recipient could receive. (Section 202.7, Chapter 23, Illinois Revised Statutes, 1963.) On January 2, 1968, Congress enacted § 402(a)(23):
"[B]y July 1, 1969, the amounts used by the State to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established, and any maximum that the State imposes on the amount paid to families will have been proportionately adjusted."
An HEW interpretation of 45 C.F.R. § 233.20(a)(2)(ii), which refers to § 402(a)(23), states:
"`By July 1, 1969' means the required updating will have been completed and all AFDC assistance payments will have been recomputed in accordance with revised amounts, and, if applicable, adjusted maximums and ratable reductions.
`Reflect fully changes in living costs since such amounts were established' means that the State agency must identify when the amounts to determine need were last priced. A cost study of the AFDC amounts should have been completed between January 2, 1968, and July 1, 1969, and the changes in living costs from the date the amounts were last priced should have been determined.
Acceptable cost study methods
Method B [Used by the IDPA in this case]
a. Using the U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index, for the appropriate region determine the current index price for the applicable items of living;
b. Calculate percentage change for the items in the index from the date the standard was last established to the present date; * * *
`Will have been adjusted' means the amounts used by the State agency to determine need will have been corrected to reflect the changes in costs of living, since the amounts were last established. This adjustment in assistance standards must be made, even though other provisions regarding payment may offset it.
Adjustment amounts and costs study must bear a reasonable time relationship between cost study and the application into agency regulations. A cost study in early 1968 which was reflected in the agency's standard effective July 1, 1968, meets the requirements of the Act. However, if the agency did not adjust its standards until July 1, 1969, ...