## Facts

- Congress amended the Aid to Families with Dependent Children (AFDC) program through the Deficit Reduction Act of 1984 (DEFRA).
- Before DEFRA, a household could exclude from the AFDC filing unit a child who received child-support payments, if exclusion increased the household’s total combined income.
- DEFRA required the filing unit to include all children living in the home, including children for whom child support was received, and required assignment of those support rights to the State as a condition of AFDC eligibility.
- DEFRA also required a “pass-through” to the family of the first $50 per month of collected child support, which was disregarded when computing AFDC benefits.
- Beaty Mae Gilliard and similarly situated AFDC recipients in North Carolina challenged the post-DEFRA scheme, alleging that including supported children and counting their support could reduce total household income compared to the prior regime.
- North Carolina adopted regulations implementing the DEFRA filing-unit and assignment requirements; the district court found the regulations consistent with DEFRA but held the federal statute unconstitutional under the Fifth Amendment.

## Issues

1. Whether DEFRA’s mandatory inclusion of all co-resident children in the AFDC filing unit, with child-support income counted subject to a $50 disregard, violates the Fifth Amendment’s Due Process Clause or its equal protection component.
2. Whether DEFRA’s requirement that AFDC applicants assign child-support rights to the State, coupled with reduced AFDC benefits, effects a taking of property without just compensation in violation of the Fifth Amendment.

## Decision

- The Supreme Court reversed the district court.
- The Court held that the DEFRA amendments did not violate due process or equal protection because the classification was subject to rational-basis review and was rationally related to legitimate governmental objectives.
- The Court held that the amendments did not violate the Takings Clause because recipients lacked a vested property right to AFDC benefits at pre-amendment levels and the assignment requirement was a permissible condition of participation in the program.

## Legal Principles

- Social welfare and economic legislation generally receives rational-basis review unless it burdens a suspect class or infringes a fundamental right.
- The Constitution does not require the government to subsidize particular family living arrangements; reduced benefits resulting from eligibility rules typically do not trigger heightened scrutiny absent direct interference with protected choices.
- Congress may treat child-support payments received for one child as relevant to the resources of the household for purposes of allocating limited welfare funds.
- Statutory welfare benefits may be altered prospectively; beneficiaries do not have a constitutional entitlement to continuation of benefits at a fixed prior level.
- Conditioning welfare eligibility on assignment of support rights to the State, with partial pass-through to the family, is not a compensable taking where participation is voluntary and no vested property is confiscated.

## Conclusion

The Court upheld DEFRA’s AFDC filing-unit and child-support assignment requirements, concluding that Congress could rationally redesign benefit calculations to reduce expenditures and allocate limited aid among needy families, and that the changes neither violated due process/equal protection nor constituted a taking.


Bowen v. Gilliard, 483 U.S. 587 (1987)