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Reynolds v. Dept. of Public Aid

MARCH 6, 1975.




APPEAL from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding.


This is an appeal from a judgment of the circuit court of Cook County affirming the decision of the Illinois Department of Public Aid denying plaintiffs' applications for public aid. Separate petitions for administrative review were filed by plaintiffs in the circuit court, and the cases were consolidated for hearing. Plaintiffs appeal from the judgment affirming the decision of the State department.

Plaintiffs are four residents of the Baptist Retirement Home (hereinafter Home) in Maywood, Illinois. Alva Barker (born December 5, 1892) made application for admission to the Home on November 1, 1963, and entered the Home on April 8, 1965; Margaret Clink (born February 28, 1887) made application on November 3, 1967, and entered the Home on February 27, 1968; Grace Bentley (born October 16, 1878) made application on October 13, 1969, and entered on June 29, 1971; Grace Reynolds (born September 12, 1890) made application on January 20, 1969, and entered the Home on July 1, 1969. Defendants are Edward T. Weaver, Director of the Illinois Department of Public Aid, and David L. Daniel, Director of the Cook County Department of Public Aid.

Preliminary to acceptance, plaintiffs submitted signed applications for admission to the Home on printed forms, each of which contained a certificate of admission of the Board of Directors of the Home executed by its president and secretary. No duties or obligations of the Home were set forth therein. The applications of Barker, Clink and Bentley contained assignments to the Home of all present and future assets. The Reynolds application did not contain such an assignment, but all of her assets were in fact turned over to the Home, and after her admission all Social Security payments were assigned. None of the applications specifically referred to the assignment of old-age-assistance benefits. Each included the question, "Do you receive State old age assistance?" which Reynolds and Bentley answered affirmatively and Barker and Clink in the negative. The Reynolds application followed with the question, "If eligible, will you apply on request of the Home and cooperate with the Home to obtain such assistance?" and the others asked instead, "If eligible, are you willing to apply?" Each answered "Yes."

During the month of October 1972, prior to filing application for old-age assistance with the State of Illinois, each of the plaintiffs, at the request of the Home, signed "Residents' Agreements" with the Home which purported to set forth the rights, obligations and duties of the parties. Paragraph 7 provides, inter alia, that upon exhaustion of the assets transferred, the resident will apply for old-age-assistance benefits and further, that in the absence of receipt of such payments, when all other assets have been exhausted, the Home reserves the right to remove the resident.

Subsequently the Home, on behalf of Barker, Bentley, Reynolds and Clink, submitted applications for old-age assistance total-care payments to the Cook County Department of Public Aid. In an accompanying letter the executive director of the Home stated, "The above applicants do not pay a set fee. They have limited funds and surrender everything when they come in." In supplemental forms the Home stated that each applicant had contracted for life care, and attached copies of the respective residents' agreements of October 1972, with each original application for admission. The Reynolds application for assistance was denied for the stated reason that she was presently under a contract for life care with the Home. The Barker, Bentley and Clink applications were also denied, but for the stated reason that sufficient information was not furnished upon which to determine eligibility. In each case an appeal was taken from the decision of the Cook County Department of Public Aid.

During the hearings on appeal before the State Department of Public Aid, an employee of the Home testified as to the assets each applicant brought to the Home upon admission, the value of subsequent benefits received by the Home (such as the assignment of Social Security benefits, proceeds of sale of real estate and personalty, and Barker's pension payments), and in each case the excess cost of care over the value of the total assets received by the Home. The cost of care was based on the cash stipends received by each resident from the Home, together with the average per resident of the total costs of operating the Home. The Home took the position that each applicant was obliged, both by the terms of the original application and the subsequently executed residents' agreements, to apply for old-age assistance upon the exhaustion of the assets by the Home. It was there argued, as it is before this court, that the applicants are therefore entitled to old-age-assistance benefits in accordance with the provisions of section 3-1.5 of the Illinois Public Aid Code (Ill. Rev. Stat. 1971, ch. 23, par. 3-1.5), which are:

"Residents of Private Institutions.) Persons who are residents of or who are being maintained by a private institution may qualify only if they have not purchased care and maintenance in the institution by cash or by transfer of property, or having purchased care and maintenance, only after the amount of the cash or property has been wholly consumed for care and maintenance."

Contrary to the County Department's request, no documentation was ever presented to verify the expenditures on behalf of the applicants or otherwise show that the assets transferred had been wholly exhausted or consumed for care and maintenance. An undated brochure of the Home was introduced into evidence to show the general policy with respect to the Home's residents.

After hearings had in each plaintiff's case, the decisions of the Director of the Department of Public Aid of the State of Illinois provided that each applicant was ineligible for public aid because she contracted for life care when she entered the Home, and such assets can neither be wholly consumed nor altered by subsequent agreements. The decisions further provided that since the Home limited its responsibility to the applicants through the October 1972 residents' agreements, the subsequent agreement cannot be recognized because it constitutes a revision or abrogation of an earlier contract.

Although each notice of decision filed by the County Department stated that the "application for Medical Assistance which was filed" was denied for the reasons above stated, we note that the original applications for assistance filed by plaintiffs stated that they applied for and sought total care assistance and not merely medical assistance payments. Section 5-2 of the Illinois Public Aid Code (Ill. Rev. Stat. 1971, ch. 23, par. 5-2) provides a different standard of eligibility to obtain medical assistance only. Therefore, since the applications were originally filed for general old-age-assistance benefits and the parties had limited argument to plaintiffs' eligibility thereto, we do not reach the issues of whether or not the plaintiffs are entitled to medical assistance payments.


Plaintiffs' first contention on appeal is that they are not precluded from receiving old-age assistance and are eligible for such benefits under section 3-1.5 of the Illinois Public Aid Code. They maintain that since the amount of cash or property transferred to the Home has been wholly consumed for care and maintenance, they are entitled to public aid "regardless of whether the institution might have a continuing contractual obligation to furnish care thereafter." It is further contended that the regulations adopted by the Illinois Department of Public Aid (Illinois Department of Public Aid Categorical Assistance Manual, Chapter 550, Topics 554.3 and 555.1) unlawfully restrict the scope of section 3-1.5 of the Code and are therefore invalid and not applicable.

• 1 A primary rule of statutory construction is that the court must look to the very words of the statute to ascertain the legislative intent. (Ill. Bell. Telephone Co. v. Powell (1971) 48 Ill.2d 375, 270 N.E.2d 25.) An administrative agency has authority and responsibility to regulate the execution of a statute (Hill v. Relyea (1966), 34 Ill.2d 552, 216 N.E.2d 795), but the statute which is being administered may not be altered or added to by the exercise of a power to make regulations thereunder. (Ruby ...

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