## Facts

- William Hill was elderly and disabled.
- Hill received a $45,000 inheritance from his mother’s estate.
- Hill transferred the $45,000 to Utah SNAP Fund, Inc., Utah’s pooled fund supplemental needs trust.
- The trust operated with (1) a pooled investment account holding funds for multiple beneficiaries and (2) a beneficiary expense-paying sub-trust checking account funded by periodic transfers from the investment account.
- Hill had no control over trust investments or distributions; whether and when Hill would be reimbursed for expenses was within the trustee’s discretion.
- Trust assets were treated as excluded when assessing a beneficiary’s eligibility for means-tested public assistance programs.
- After funding the trust, Hill applied for benefits under the federal Food Stamp Program (FSP).
- Because Hill was elderly, his eligibility was evaluated using the net-income standard.
- The FSP denied Hill’s application after concluding that his net income exceeded the program’s eligibility limit.
- In calculating Hill’s income, the administering agency included (1) transfers the trustee made from the pooled investment account to the sub-trust checking account and (2) trust reimbursements to Hill for expenses, including utilities, life insurance premiums, medical expenses, a bus pass, and clothing.
- Hill appealed administratively. The Utah State Department of Workforce Services and an administrative-law judge affirmed the denial.
- Hill then sought judicial review in the United States District Court for the District of Utah.

## Issues

1. Whether transfers made within a pooled supplemental needs trust—moving funds from the pooled investment account into the beneficiary’s sub-trust checking account—may be treated as countable income for Food Stamp Program net-income eligibility.
2. Whether trust reimbursements paid to the beneficiary for ordinary living and medical expenses may be treated as countable unearned income even if the trust principal is excluded as an asset for eligibility purposes.
3. Whether the Utah State Department of Workforce Services acted lawfully in applying federal food-stamp income-counting rules to these trust-related transactions.

## Decision

- The court denied Hill’s motion for summary judgment.
- The court granted the Department’s motion for summary judgment.
- The court upheld the agency’s denial of Hill’s food-stamp application.
- The court accepted the agency’s treatment of both (1) intra-trust transfers into the sub-trust checking account and (2) reimbursements for Hill’s expenses as countable income for purposes of the net-income calculation.

## Legal Principles

- Under the Food Stamp Program, “income” is broadly defined and includes amounts received by a household unless a specific exclusion applies.
- Treating a trust’s principal as excluded for eligibility purposes does not automatically exclude payments flowing from the trust when those payments are used to meet the beneficiary’s expenses.
- Amounts made available for a beneficiary through trust administration—such as transfers earmarked to pay the beneficiary’s expenses and reimbursements paid to the beneficiary—can be counted as unearned income in the net-income determination.
- On judicial review of an agency eligibility determination, the reviewing court will uphold the decision where the agency’s application of governing program rules is lawful and supported by the administrative record.

## Conclusion

The district court affirmed the denial of Hill’s food-stamp benefits because the agency permissibly counted trust-related transactions—both the trustee’s transfers from the pooled investment account into the expense-paying sub-account and the trust’s reimbursements of Hill’s expenses—as income under the net-income standard, which caused Hill to exceed the eligibility threshold.


Hill v. Utah State Department of Workforce Services, 2012 WL 3527885 (2012)