Bowen v. Gilliard

483 U.S. 587, 107 S. Ct. 3008, 97 L. Ed. 2d 485, 1987 U.S. LEXIS 2896, 55 U.S.L.W. 5079

Opinions

Justice Stevens

delivered the opinion of the Court.

As part of its major effort to reduce the federal deficit through the Deficit Reduction Act of 1984, 98 Stat. 494, Congress amended the statute authorizing Federal Aid to Families with Dependent Children (AFDC)¹ to require that a family’s eligibility for benefits must take into account, with certain specified exceptions, the income of all parents, brothers, and sisters living in the same home.² The principal question presented in this litigation is whether that requirement violates the Fifth Amendment to the United States Constitution when it is applied to require a family wishing to receive AFDC benefits to include within its unit a child for whom child support payments are being made by a noncustodial parent.

I

This litigation began in 1970. At that time the federal statute did not require that all parents and siblings be included in an AFDC filing unit. Thus, for example, if a teenage child had significant income of her own, perhaps from wages or perhaps in support payments from an absent parent, the other members of her family could exclude her from the filing unit in order to avoid disqualifying the entire family from benefits or reducing its level of benefits.

Beaty Mae Gilliard, one of the named class members in the 1970 suit,³ began receiving public assistance from North Carolina under AFDC in 1962. In February 1970, after her seventh child was born, the State automatically included him in the filing unit, thereby increasing the family’s monthly allotment from $217 to $227 to reflect the difference between the benefit for a family of seven and the benefit for a family of eight. Gilliard was, however, also receiving $43.33 each month in child support from the baby’s father. When a formal parental support order was entered in April 1970, the State credited the support payments against her account and reduced her monthly benefit to $184. Gilliard sued, contending that she had a statutory right to exclude her seventh child from the unit and thus to continue to receive the $217 benefit for a family of seven and also to retain the $43.33 paid by her youngest child’s father. A three-judge District Court agreed with her reading of the statute and entered an order requiring the State to reinstate her benefits at the $217 level and to reimburse her for the improper credits of $43 per month. Gilliard v. Craig, 331 F. Supp. 587 (WDNC 1971). The District Court also granted classwide relief. We affirmed that judgment. 409 U. S. 807 (1972). No constitutional question was decided at that time.

Congress amended the AFDC program in 1975 to require, as a condition of eligibility, that applicants for assistance must assign to the State any right to receive child support payments for any member of the family included in the filing unit.⁴ In response, North Carolina amended its laws to provide that the acceptance of public assistance on behalf of a dependent child would constitute an assignment of any right to support for that child. See N. C. Gen. Stat. § 110-137 (Supp. 1985). These amendments, however, did not harm recipients like Gilliard because they did not affect the right to define the family unit covered by an application and thereby to exclude children with independent income, such as a child for whom support payments were being made.

In 1983, the Secretary of Health and Human Services proposed certain amendments to the Social Security Act to “assure that limited Federal and State resources are spent as effectively as possible.” Letter of 25 May 1983, to the Honorable George Bush, President of the Senate, App. 168-169 (hereinafter Heckler Letter). One of the Secretary’s proposals was “to establish uniform rules on the family members who must file together for AFDC, and the situations in which income must be counted. In general, the parents, sisters, and brothers living together with a dependent child must all be included; the option of excluding a sibling with income, for example, would no longer be available.” Ibid. The Secretary stressed that the improveménts would result in an AFDC allocation program that “much more realistically reflects the actual home situation.” Id., at 169.

The Secretary’s proposal was not enacted in 1983, but one of the provisions in the Deficit Reduction Act of 1984 (DEFRA) established a standard filing unit for the AFDC program. The Senate Finance Committee estimated that the change would save $455 million during the next three fiscal years. S. Print No. 98-169, p. 980 (1984) (hereinafter Senate Print). It explained the purpose of the amendment in language that removes any possible ambiguity in the relevant text of the statute:⁵

“Present Law

“There is no requirement in present law that parents and all siblings be included in the AFDC filing unit. Families applying for assistance may exclude from the filing unit certain family members who have income which might reduce the family benefit. For example, a family might choose to exclude a child who is receiving social security or child support payments, if the payments would reduce the family’s benefits by an amount greater than the amount payable on behalf of the child. . . .

“Explanation of Provision

“The provision approved by the Committee would require States to include in the filing unit the parents and all dependent minor siblings (except SSI recipients and any stepbrothers and stepsisters) living with a child who applies for or receives AFDC. . . .

“This change will end the present practice whereby families exclude members with income in order to maximize family benefits, and will ensure that the income of family members who live together and share expenses is recognized and counted as available to the family as a whole.” Ibid.

See also H. R. Conf. Rep. No. 98-861, p. 1407 (1984).

Because the 1984 amendment forced families to include in the filing unit children for whom support payments were being received, the practical effect was that many families’ total income was reduced.⁶ The burden of the change was mitigated somewhat by a separate amendment providing that the first $50 of child support collected by the State must be remitted to the family and not counted as income for the purpose of determining its benefit level.⁷ See 42 U. S. C. §§602(a)(8)(A)(vi), 657(b)(1) (1982 ed., Supp. III). Thus, the net effect of the 1984 amendments for a family comparable to Gilliard’s would include three changes: (1) the addition of the child receiving support would enlarge the filing unit and entitle the family to a somewhat larger benefit; (2) child support would be treated as family income and would be assigned to the State, thereby reducing the AFDC benefits by that amount; and (3) the reduction would be offset by $50 if that amount was collected from an absent parent. In sum, if the assigned support exceeded $50 plus the difference in the benefit level caused by adding the child or children receiving support, the family would suffer; if less than $50 and the difference in the benefit level was collected as support, it would not.

I — I I — 1

After North Carolina adopted regulations to comply with the 1984 amendments, some members of the class that had earlier obtained relief filed a motion to reopen the 1971 decree and obtain further relief on behalf of the class. The State impleaded the Secretary of Health and Human Services, contending that if the State’s compliance with the federal statute resulted in any liability to appellees, the Federal Government should share in any payment of additional AFDC benefits. The District Court found that North Carolina’s and the Department of Health and Human Services’ regulations were in conformance with the statute,⁸ but concluded that the statutory scheme violated both the Due Process Clause and the Takings Clause of the Fifth Amendment.⁹

The court interpreted North Carolina law as imposing a duty on the custodial parent to use child support money exclusively for the benefit of the child for whom it had been obtained,¹⁰ and reasoned that a forced assignment of the support money to the State in exchange for AFDC benefits for the entire family was a taking of the child’s private property. Gilliard v. Kirk, 633 F. Supp. 1529, 1551-1555 (WDNC 1986). Additionally, the court reasoned that the use of the child’s support money to reduce the Government’s AFDC expenditures was tantamount to punishing the child for exercising the fundamental right to live with his or her family. Id., at 1557. Because of the serious impact on the autonomy of the family — including the child’s potential relationship with his or her noncustodial parent — “special judicial scrutiny” was considered appropriate, id., at 1555-1557, and the deprivation of property and liberty effected by the statutory scheme could not, in the court’s view, survive such scrutiny. We noted probable jurisdiction, 479 U. S. 1004 (1986).

The District Court was undoubtedly correct in its perception that a number of needy families have suffered, and will' suffer, as a result of the implementation of the DEFRA amendments to the AFDC program. Such suffering is frequently the tragic byproduct of a decision to reduce or to modify benefits to a class of needy recipients. Under our structure of government, however, it is the function of Congress — not the courts — to determine whether the savings realized, and presumably used for other critical governmental functions, are significant enough to justify the costs to the individuals affected by such reductions. The Fifth Amendment “gives the federal courts no power to impose upon [Congress] their views of what constitutes wise economic or social policy,” by telling it how “to reconcile the demands of . . . needy citizens with the finite resources available to meet those demands.” Dandridge v. Williams, 397 U. S. 471, 486, 472 (1970). Unless the Legislative Branch’s decisions run afoul of some constitutional edict, any inequities created by such decisions must be remedied by the democratic processes. The District Court believed that the amendment at issue did conflict with both the Due Process Clause and the Takings Clause of the Fifth Amendment.¹¹ We consider these arguments in turn, and reject them.¹²

t — I h-1 I — l

The precepts that govern our review of appellees’ due process and equal protection challenges to this program are similar to those we have applied in reviewing challenges to other parts of the Social Security Act:

“[0]ur review is deferential. ‘Governmental decisions to spend money to improve the general public welfare in one way and not another are “not confided to the courts. The discretion belongs to Congress unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment.’” Mathews v. De Castro, 429 U. S. 181, 185 (1976), quoting Helvering v. Davis, 301 U. S. 619, 640 (1937).” Bowen v. Owens, 476 U. S. 340, 345 (1986).

This standard of review is premised on Congress’ “plenary power to define the scope and the duration of the entitlement to . . . benefits, and to increase, to decrease, or to terminate those benefits based on its appraisal of the relative importance of the recipients’ needs and the resources available to fund the program.” Atkins v. Parker, 472 U. S. 115, 129 (1985); see also Schweiker v. Hogan, 457 U. S. 569 (1982); Califano v. Boles, 443 U. S. 282, 296 (1979); California v. Aznavorian, 439 U. S. 170 (1978); Weinberger v. Salfi, 422 U. S. 749 (1975).

The District Court had before it evidence that the DEFRA amendment was severely impacting some families. For example, some noncustodial parents stopped making their support payments because they believed that their payments were helping only the State, and not their children. 633 F. Supp., at 1542-1543. It is clear, however, that in the administration of a fund that is large enough to have a significant impact on the Nation’s deficit, general rules must be examined in light of the broad purposes they are intended to serve.¹³ The challenged amendment unquestionably serves Congress’ goal of decreasing federal expenditures. See Senate Print, at 981 (estimating that amendment in AFDC program will save $455 million during fiscal years 1984 through 1987); 130 Cong. Rec. 8368 (1984) (remarks of Sen. Dole). The evidence that a few noncustodial parents were willing to violate the law by not making court-ordered support payments does not alter the fact that the entire program has resulted in saving huge sums of money.

The rationality of the amendment denying a family the right to exclude a supported child from the filing unit is also supported by the Government’s separate interest in distributing benefits among competing needy families in a fair way. Given its perceived need to make cuts in the AFDC budget, Congress obviously sought to identify a group that would suffer less than others as a result of a reduction in benefits. When considering the plight of two five-person families, one of which receives no income at all while the other receives regular support payments for some of the minor children, it is surely reasonable for Congress to conclude that the former is in greater need than the latter. This conclusion is amply supported by Congress’ assumption that child support payments received are generally beneficial to the entire family unit, see Senate Print, at 980, and by “the common sense proposition that individuals living with others usually have reduced per capita costs because many of their expenses are shared.” Termini v. Califano, 611 F. 2d 367, 370 (CA2 1979); see also Lyng v. Castillo, 477 U. S. 635, 638-643 (1986).¹⁴

It was therefore rational for Congress to adjust the AFDC program to reflect the fact that support money generally provides significant benefits for entire family units. This conclusion is not undermined by the fact that there are no doubt many families in which some — or perhaps all — of the support money is spent in a way that does not benefit the rest of the family. In determining how best to allocate limited funds among the extremely large class of needy families eligible for AFDC benefits, Congress is entitled to rely on a classwide presumption that custodial parents have used, and may legitimately use, support funds in a way that is beneficial to entire family units. As we have repeatedly explained:

“If the classification has some ‘reasonable basis/ it does not offend the Constitution simply because the classification ‘is not made with mathematical nicety or because in practice it results in some inequality.’ Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78. ‘The problems of government are practical ones and may justify, if they do not require, rough accommodations — illogical, it may be, and unscientific.’ Metropolis Theatre Co. v. City of Chicago, 228 U. S. 61, 69-70. ‘A statutory discrimination will not be set aside if any state of facts reasonably may be conceived to justify it.’ McGowan v. Maryland, 366 U. S. 420, 426.” Dandridge v. Williams, 397 U. S., at 485.

See also Weinberger v. Salfi, 422 U. S., at 785. We have no doubt that the DEFRA amendment satisfies this test.¹⁵

Appellees argue (and the District Court .ruled), however, that finding that Congress acted rationally is not enough to sustain this legislation. Rather, they claim that some form of “heightened scrutiny” is appropriate because the amendment interferes with a family’s fundamental right to live in the type of family unit it chooses.¹⁶ We conclude that the District Court erred in subjecting the DEFRA amendment to any form of heightened scrutiny. That some families may decide to modify their living arrangements in order to avoid the effect of the amendment, does not transform the amendment into an act whose design and direct effect are to “intrud[e] on choices concerning family living arrangements.” Moore v. East Cleveland, 431 U. S. 494, 499 (1977).¹⁷ As was the case with the marriage-related provision upheld in Califano v. Jobst, 434 U. S. 47 (1977), “Congress adopted this rule in the course of constructing a complex social welfare system that necessarily deals with the intimacies of family life. This is not a case in which government seeks to foist orthodoxy on the unwilling.” Id., at 54, n. 11.

Last Term we rejected a constitutional challenge to a provision in the Federal Food Stamp Program, which determines eligibility and benefit levels on a “household” rather than an individual basis. Lyng v. Castillo, 477 U. S. 635 (1986).¹⁸ We held that the guarantee of equal treatment in the Due Process Clause of the Fifth Amendment was not violated by the statutory requirement that generally treated parents, children, and siblings who lived together as a single household, and explained:

“The disadvantaged class is that comprised by parents, children, and siblings. Close relatives are not a ‘suspect’ or ‘quasi-suspect’ class. As a historical matter, they have not been subjected to discrimination; they do not exhibit obvious, immutable, or distinguishing characteristics that define them as a discrete group; and they are not a minority or politically powerless. See, e. g., Massachusetts Board of Retirement v. Murgia, 427 (1976) (per curiam). In fact, quite the contrary is true.

“Nor does the statutory classification ‘directly and substantially’ interfere with family living arrangements and thereby burden a fundamental right. Zablocki v. Redhail, 434 U. S. 374, 386-387, and n. 12 (1978). See id., at 403-404 (Stevens, J., concurring); Califano v. Jobst, 434 U. S. 47, 58 (1977).” Id., at 638.

In light of this, we concluded in Lyng that the “District Court erred in judging the constitutionality of the statutory distinction under ‘heightened scrutiny.’” Ibid. In this case the District Court committed the same error. As in Lyng, the standard of review here is whether “Congress had a rational basis” for its decision. Id., at 639. And as in Lyng, “the justification for the statutory classification is obvious.” Id., at 642. The provisions at issue do not violate the Due Process Clause.¹⁹

IV

Aside from holding that the amendment violated the Due Process Clause of the Fifth Amendment and its equal protection component, the District Court invalidated the DEFRA amendments as a taking of private property without just compensation. The court based this holding on the premise that a child for whom support payments are made has a right to have the support money used exclusively in his or her “best interest.” Yet, the court reasoned, the requirements (1) that a custodial parent who applies for AFDC must include a child’s support money in computing family income, and (2) that the support must be assigned to the State, effectively converts the support funds that were once to be used exclusively for the child’s best interests into an AFDC check which, under federal law, must be used for the benefit of all the children. § 405, 42 U. S. C. § 605. Therefore, the District Court held that the State was “taking” that child’s right to exclusive use of the support money. In addressing this issue, it is helpful to look first at whether the State “takes” the child’s property when it considers the support payments as part of the family’s income in computing AFDC eligibility. We will then consider whether the requirement that support payments be assigned to the State requires a finding that the amendments violate the taking prohibition.

Some perspective on the issue is helpful here. Had no AFDC program ever existed until 1984, and had Congress then instituted a program that took into account support payments that a family receives, it is hard to believe that we would seriously entertain an argument that the new benefit program constituted a taking. Yet, somehow, once benefits are in place and Congress sees a need to reduce them in order to save money and to distribute limited resources more fairly, the “takings” label seems to have a bit more plausibility. For legal purposes though, the two situations are identical. See Bowen v. Public Agencies Opposed to Social Security Entrapment, 477 U. S. 41 (1986). Congress is not, by virtue of having instituted a social welfare program, bound to continue it at all, much less at the same benefit level. Thus, notwithstanding the technical legal arguments that have been advanced, it is imperative to recognize that the amendments at issue merely incorporate a definitional element into an entitlement program. It would be quite strange indeed if, by virtue of an offer to provide benefits to needy families through the entirely voluntary AFDC program, Congress or the States were deemed to have taken some of those very family members’ property.

The basic requirement that the AFDC filing unit must include all family members living in the home, and therefore that support payments made on behalf of a member of the family must be considered in determining that family’s level of benefits, does not even arguably take anyone’s property. The family members other than the child for whom the support is being paid certainly have no takings claim, since it is clear that they have no protected property rights to continued benefits at the same level. See Public Agencies Opposed to Social Security Entrapment, supra. Nor does the simple inclusion of the support income in the benefit calculation have any legal effect on the child’s right to have it used for his or her benefit. To the extent that a child has the right to have the support payments used in his or her “best interest,” he or she fully retains that right. Of course, the effect of counting the support payments as part of the filing unit’s income often reduces the family’s resources, and hence increases the chances that sharing of the support money will be appropriate. See n. 13, supra. But given the unquestioned premise that the Government has a right to reduce AFDC benefits generally, that result does not constitute a taking of private property without just compensation.

The only possible legal basis for appellees’ takings claim, therefore, is the requirement that an applicant for AFDC benefits must assign the support payments to the State, which then will remit the amount collected to the custodial parent to be used for the benefit of the entire family. This legal transformation in the status of the funds, the argument goes, modifies the child’s interest in the use of the money so dramatically that it constitutes a taking of the child’s property. As a practical matter, this argument places form over substance, and labels over reality. Although it is true that money which was earmarked for a specific child’s or children’s “best interest” becomes a part of a larger fund available for all of the children, the difference between these concepts is, as we have discussed, more theoretical than practical.²⁰

In evaluating whether governmental regulation of property constitutes a “taking” we have “eschewed the development of any set formula . . . and have relied instead on ad hoc, factual inquiries into the circumstances of each particular case.” Connolly v. Pension Benefit Guaranty Corporation, 475 U. S. 211, 224 (1986).

“To aid in this determination, however, we have identified three factors which have ‘particular significance’: (1) ‘the economic impact of the regulation on the claimant’; (2) ‘the extent to which the regulation has interfered with distinct investment-backed expectations’; and (3) ‘the character of the governmental action.’ Penn Central Transportation Co., [438 U. S. 104,] 124.” Id., at 224-225.

Here, each of these three factors refutes the conclusion that there has been a taking.

First, in evaluating the economic impact of the assignment, it is important to remember that it is the impact on the child, not on the entire family unit, that is relevant. Thus, the fact that the entire family’s net income may be reduced does not necessarily mean that the amount of money spent for the benefit of a supported child will be any less than the amount of the noncustodial parent’s support payments. The reality is that the money will usually continue to be used in the same manner that it was previously since the typical AFDC parent will have used the support money as part of the general family fund even without its being transferred through AFDC. See n. 13, supra. Moreovér, any diminution in the value of the support payments for the child is mitigated by the extra $50 that the family receives as a result of the assignment, by the extra AFDC benefits that are received by the inclusion of an additional family member in the unit, and by the fact that the State is using its owm enforcement power to collect the support payments, and is bearing the risk of nonpayment in any given month. Whatever the diminution in value of the child’s right to have support funds used for his or her “exclusive” benefit may be, it is not so substantial as to constitute a taking under our precedents. See Keystone Bituminous Coal Assn. v. DeBenedictis, 480 U. S. 470, 493-497 (1987); Agins v. Tiburon, 447 U. S. 255, 260 (1980); Penn Central Transportation Co. v. New York City, 438 U. S. 104, 131 (1978).

Second, the child receiving support payments holds no vested protectable expectation that his or her parent will continue to receive identical support payments on the child’s behalf, and that the child will enjoy the same rights with respect to them. See Layton v. Layton, 263 N. C. 453, 456, 139 S. E. 2d 732, 734 (1965) (support is “not a property right of the child”). The prospective right to support payments, and the child’s expectations with respect to the use of such funds, are clearly subject to modification by law, be it through judicial decree, state legislation, or congressional enactment. See N. C. Gen. Stat. § 50-13.7 (1984) (modification of order for child support). For example, one of the chief criteria in assessing a child support obligation is the noncustodial parent’s ability to make payments, see Coggins v. Coggins, 260 N. C. 765, 133 S. E. 2d 700 (1963); Douglas, Factors in Determining Child Support, 36 Juvenile & Fam. Court J., No. 3, p. 27 (1985), and an adverse change in that parent’s ability may, of course, require a modification of the decree. 2 J. Atkinson, Modern Child Custody Practice § 10.25, pp. 527-528 (1986) (discussing reductions in support). Any right to have the State force a noncustodial parent to make payments is, like so many other legal rights (including AFDC payments themselves), subject to modification by “the public acts of government.” Reichelderfer v. Quinn, 287 U. S. 315, 319 (1932); see generally Public Agencies Opposed to Social Security Entrapment, 477 U. S., at 51-56. As the District Court explained, Congress, and the States, through their implementing statutes and regulations, have modified those rights through passage of (and the States’ compliance with) the DEFRA amendments. See 633 F. Supp., at 1548-1551; Gorrie v. Bowen, 809 F. 2d 508, 521 (CA8 1987). This prospective change in the child’s expectations concerning future use of support payments is far from anything we have ever deemed a taking.

Finally, the character of the governmental action here militates against a finding that the States or Federal Government unconstitutionally take property through the AFDC program. It is obviously necessary for the Government to make hard choices and to balance various incentives in deciding how to allocate benefits in this type of program. But a decision to include child support as part of the family income certainly does not implicate the type of concerns that the Takings Clause protects. This is by no means an enactment that forces “some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 U. S. 40, 49 (1960).

The law does not require any custodial parent to apply for AFDC benefits. Surely it is reasonable to presume that a parent who does make such an application does so because she or he is convinced that the family as a whole — as well as each child committed to her or his custody — will be better off with the benefits than without. In making such a decision, the parent is not taking a child’s property without just compensation; nor is the State doing so when it responds to that decision by supplementing the collections of support money with additional AFDC benefits.

y

Writing for a unanimous Court, Justice Stewart described the courts’ role in cases such as this:

“We do not decide today that the . . . regulation is wise, that it best fulfills the relevant social and economic objectives that [Congress] might ideally espouse, or that a more just and humane system could not be devised. Conflicting claims of morality and intelligence are raised by opponents and proponents of almost every measure, certainly including the one before us. But the intractable economic, social, and even philosophical problems presented by public welfare assistance programs are not the business of this Court. The Constitution may impose certain procedural safeguards upon systems of welfare administration, Goldberg v. Kelly, [397 U. S. 254 (1970)]. But the Constitution does not empower this Court to second-guess . . . officials charged with the difficult responsibility of allocating limited public welfare funds among the myriad of potential recipients. ” Dandridge v. Williams, 397 U. S., at 487.

The judgment of the District Court is

Reversed.

1 “ ‘The AFDC program is based on a scheme of cooperative federalism.’ King v. Smith, 392 U. S. 309, 316 (1968). Established by Title IV of the Social Security Act of 1935, 49 Stat. 627, ‘to provide financial assistance to needy dependent children and the parents or relatives who live with and care for them,’ Shea v. Vialpando, 416 U. S. 251, 253 (1974), the federal program reimburses each State which chooses to participate with a percentage of the funds it expends. § 403, 42 U. S. C. § 603. In return, the State must administer its assistance program pursuant to a state plan that conforms to applicable federal statutes and regulations. § 402, 42 U. S. C. § 602.” Heckler v. Turner, 470 U. S. 184, 189 (1985).

2 The Deficit Reduction Act of 1984, 98 Stat. 494, which fills over 700 pages of the Statutes at Large, includes two major divisions, the Tax Reform Act of 1984 and the Spending Reduction Act of 1984. The amendment at issue in this case is found in the latter division, 98 Stat. 1145. As a result of that amendment, § 402(a)(38) of the Social Security Act, 42 U. S. C. § 602(a)(38) (1982 ed., Supp. III) now provides, in pertinent part:

“A State plan for aid and services to needy families with children must—

“(38) provide that in making the determination under paragraph (7) with respect to a dependent child and applying paragraph (8), the State agency shall (except as otherwise provided in this part) include—

“(A) any parent of such child, and

“(B) any brother or sister of such child, if such brother or sister meets the conditions described in clauses (1) and (2) of section 606(a) of this title, if such parent, brother, or sister is living in the same home as the dependent child, and any income of or available for such parent, brother, or sister shall be included in making such determination and applying such paragraph with respect to the family (notwithstanding section 405(j) of this title, in the case of benefits provided under subchapter II of this chapter) . . . .”

Section 406(a), in turn, provides:

“The term ‘dependent child’ means a needy child (1) who has been deprived of parental support or care by reason of the death, continued absence from the home ... or physical or mental incapacity of a parent, and who is living with his father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, aunt, first cousin, nephew, or niece, in a place of residence maintained by one or more of such relatives as his or their own home, and (2) who is (A) under the age of eighteen, or (B) at the option of the State, under the age of nineteen and a full-time student in a secondary school (or in the equivalent level of vocational or technical training), if before he attains age nineteen, he may reasonably be expected to complete the program of such secondary school (or such training).” 42 U. S. C. § 606(a).

3 The class was comprised of “persons who have been or may be subject to reduction of AFDC . . . benefits based upon unconstitutional or illegal claim of credit by administering agencies for outside income and other resources available to some but not all of a family group.” Gilliard, v. Craig, 331 F. Supp. 587, 588 (WDNC 1971).

4 Section 402(a)(26)(A) provides:

“[A]s a condition of eligibility for aid, each applicant or recipient will be required—

“(A) to assign to the State any rights to support from any other person such applicant may have (i) in his own behalf or in behalf of any other family member for whom the applicant is applying for or receiving aid, and (ii) which have accrued at the time such assignment is executed . . . .” 42 U. S. C. § 602(a)(26)(A) (1982 ed., Supp. III).

The 1975 amendment also amended § 402 to require recipients to

“cooperate with the State (i) in establishing the paternity of a child born out of wedlock with respect to whom aid is claimed, and (ii) in obtaining support payments for such applicant and for a child with respect to whom such aid is claimed, or in obtaining any other other payments or property due such applicant or such child ....’’ 42 U. S. C. § 602(a)(26)(B) (1982 ed., Supp. III).

5 In support of the District Court’s judgment, appellees have asked us to adopt a construction of the statute that is completely inconsistent with the intent of Congress as explained in the Secretary’s request for the legislation, in the Senate Print, and in the Conference Report as well. Moreover, the arguments are inconsistent with the unambiguous regulations the Secretary has adopted to implement the statute. See 45 CFR § 206.10(a)(1)(vii) (1986). The District Court carefully considered these statutory arguments and rejected them. Gilliard v. Kirk, 633 F. Supp. 1529, 1548 (WDNC 1986). We agree with that court’s analysis of the meaning of the statute and find no merit in appellees’ statutory arguments advanced in this Court. See also Gorrie v. Bowen, 809 F. 2d 508, 513-516 (CA8 1987).

6 For example, under the July 1985 levels of payment in North Carolina, a family of four with no other income would have received $269. A child’s support income of $100 would therefore reduce the family’s AFDC payment to $169 if that child was included in the filing unit. The family would have a net income of $269. But if the family were permitted to exclude the child from the unit and only claim the somewhat smaller benefit of $246 for a family of three, it could have collected that amount plus the excepted child’s $100 and have a net income of $346. See App. 85.

7 Therefore, under our example, n. 6, supra, the net income with the child included in the unit would have been $319.

8 The Secretary of Health and Human Services promulgated the following regulation to implement the DEFRA amendments:

“For AFDC purposes only, in order for the family to be eligible, an application with respect to a dependent child must also include, if living in the same household and otherwise eligible for assistance:

“(A) Any natural or adoptive parent, or stepparent (in the ease of States with laws of general applicability); and

“(B) Any blood-related or adoptive brother or sister.” 45 CFR § 206.10 (a)(1)(vii) (1986).

North Carolina’s implementing regulations are set forth in the District Court’s opinion. 633 F. Supp., at 1533-1534.

9 “No person shall be . . . deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.” U. S. Const., Arndt. 5.

10 The District Court relied on the following paragraph of the opinion of the North Carolina Supreme Court in Goodyear v. Goodyear, 257 N. C. 374, 379, 126 S. E. 2d 113, 117 (1962):

“While defendant [father] was and is obligated to make the monthly payments called for in his contract for the support of his children, plaintiff [mother] is not the beneficiary of the moneys which defendant must pay. These moneys belong to the children. Plaintiff is a mere trustee for them. That part of the payments not reasonably necessary for support and maintenance, she must hold for the benefit of the children and account to them when they call upon her. She cannot, by contract with another person, profit at the expense of the children.”

The Goodyear opinion did not purport to announce any rule of law unique to North Carolina; it quoted from Indiana and Iowa opinions and cited authorities from other jurisdictions.

11 The only Court of Appeals, see Gorrie v. Bowen, 809 F. 2d 508 (CA8 1987), and virtually all of the District Courts, that have addressed challenges to the inclusion of child support or other “exclusive use” funds have upheld the validity of these amendments, see, e. g., Showers v. Cohen, 645 F. Supp. 217 (MD Pa. 1986); Sherrod v. Hegstrom, 629 F. Supp. 150 (Ore. 1985); Huber v. Blinzinger, 626 F. Supp. 30 (ND Ind. 1985); Oliver v. Ledbetter, 624 F. Supp. 325 (ND Ga. 1985); Ardister v. Mansour, 627 F. Supp. 641 (WD Mich. 1986) (denying preliminary injunction); Shonkwiler v. Heckler, 628 F. Supp. 1013 (SD Ind. 1985) (denying preliminary injunction); cf. Park v. Coler, 143 Ill. App. 3d 727, 493 N. E. 2d 130 (1986); but see Lesko v. Bowen, 639 F. Supp. 1152 (ED Wis. 1986), appeal docketed, No. 86-744; Baldwin v. Ledbetter, 647 F. Supp. 623 (ND Ga. 1986), appeal docketed, No. 86-1140, stay pending appeal granted, 479 U. S. 1309 (1986) (Powell, J., in chambers).

12 After ruling that the DEFRA amendment of AFDC was unconstitutional, the District Court considered the form of relief appellees were entitled to. In addition to granting prospective relief, the court ordered the state defendants to “pay retroactive AFDC benefits to all families in North Carolina whose benefits were denied, reduced or terminated as a result of the enforcement” of the state regulations. 633 F. Supp., at 1563. In response to the State’s argument that the Eleventh Amendment barred such a retroactive award, the District Court explained that the State had continuously been bound by the court’s 1971 injunction, and that if the State believed DEFRA had changed the applicable law, it should have sought modification of the injunction. Id., at 1563-1564. Because we interpret the District Court’s award of both prospective and retroactive relief to rest on its holding that the DEFRA amendment was unconstitutional, and read its discussion of the 1971 injunction as responding to the State’s claim that an award of retroactive benefits was barred by the Eleventh Amendment, see Edelman v. Jordan, 415 U. S. 651, 667-668 (1974), our ruling that the DEFRA amendment is constitutionally valid requires reversal of both the District Court’s award of prospective relief and its award of retroactive relief.

13 “General rules are essential if a fund of this magnitude is to be administered with a modicum of efficiency, even though such rules inevitably produce seemingly arbitrary consequences in some individual cases. Weinberger v. Salfi, 422 U. S. 749, 776.” Califano v. Jobst, 434 U. S. 47, 53 (1977).

14 An assumption that child support payments to families receiving AFDC benefits are typically used for the entire family’s needs is entirely reasonable. See Senate Print, at 980 (amendment will “ensure that the income of family members who live together and share expenses is recognized”). This conclusion does not rest on an assumption that custodial parents routinely violate state-law restrictions on the use of support money. For the requirement that the support income be used for the “benefit” of the child does not preclude its use for common expenses. Moreover, the custodial parent’s duty to benefit the supported child is not necessarily served simply by spending more money on him or her than on other children living in the same home. As the District Court recognized, nothing in North Carolina law requires a custodial parent to focus only on the economic interest of the child receiving support without taking into account the emotional and psychological welfare of the child. Congress’ finding that custodial parents were routinely using the support funds for the entire family thus reflects the reality that such use is typically proper since expenditures for an entire family unit typically benefit each member of the household. We do not question Congress’ reliance on the Secretary of Health and Human Services’ assurance that counting child support income as part of the family income “much more realistically reflects the actual home situation.” Heckler Letter, App. 168-169.

15 Congress’ presumption is similar to the one made in § 402(a)(31), 42 U. S. C. § 602(a)(31), which provides that portions of a stepparent’s income are to be considered as part of the family income for AFDC purposes. In Brown v. Heckler, 589 F. Supp. 985 (ED Pa. 1984), aff’d, 760 F. 2d 255 (CA3 1985), the court explained that the presumption that a stepparent will assist in supporting his or her spouse’s children is rational, even though stepparents are under no legal duty to assist the children, and not every stepparent does. See also Kollett v. Harris, 619 F. 2d 134 (CA1 1980) (holding that inclusion of stepparent’s income as available to child in the Supplemental Security Income program was not unconstitutionally irrational).

16 For example, the District Court had before it an affidavit from one mother who stated that she had sent a child to live with the child’s father in order to avoid the requirement of including that child, and the support received from the child’s father, in the AFDC unit. 633 F. Supp., at 1537-1538.

17 If the DEFRA amendment’s indirect effects on family living arrangements were enough to subject the statute to heightened scrutiny, then the entire AFDC program might also be suspect since it generally provides benefits only to needy families without two resident parents. Surely this creates incentive for some needy parents to live separately. The answer, of course, is that these types of incentives are the unintended consequences of many social welfare programs, and do not call the legitimacy of the programs into question.

18 The District Court denied appellants’ motion for reconsideration in light of our decision in Lyng. App. to Juris. Statement in No. 86-509, p. 107 a.

19 Nor is there any merit in the contention that the assignment provision, see supra, at 591, and n. 4, violates the Due Process Clause. Once it is determined that it is permissible to include all members of the family in the unit, the assignment of the benefits typically has no adverse effect on the child receiving support. To the contrary, through the assignment provision the Government takes over the responsibility of making sure that noncustodial parents actually perform their child support obligations. The State also bears the risk of nonpayment of support, since the family receives the identical amount of AFDC (although not the $50 supplement) whether or not the absent parent makes payments. In the first 10 years following the adoption of the assignment requirement in 1975, legal paternity was established for more than 1.5 million children, more than 3.5 million support orders were established, and $6.8 billion in support obligations was collected on behalf of children in AFDC families. 1 Office of Child Support Enforcement, U. S. Dept. of Health & Human Services, A Decade of Child Support Enforcement 1975-1985: Tenth Annual Report to Congress for the Period Ending September 30, 1985, pp. iii, 6, 9-10 (1985).

20 In analyzing the effect of the assignment it is again instructive to ask what would happen to the support payments if there were no AFDC program at all. In that case, it would appear that custodial parents would have to use a much greater portion of the support payments to sustain the family unit, since it could hardly be deemed in the child’s best interest for his custodial parent and siblings to have no funds whatsoever. The overall practical effect of the AFDC program (even after the 1984 amendment), therefore, is to enhance the probability that a child whose custodial parent is receiving support payments in the child’s behalf will obtain direct economic benefit from those funds, in addition to the benefits that result from preserving the family unit. A reduction in that enhancement is no more a taking than any other reduction in a Social Security program.