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June 16, 1980

ROBERTA GILCHRIST, for herself and as the representative of the Estate of JAMES GILCHRIST, SR., KENNETH SMITH and SELMA SMITH, individually and on behalf of all other persons similarly situated, Plaintiffs, against PATRICIA ROBERTS HARRIS, as Secretary of the Department of Health and Human Services, BARBARA BLUM, as Commissioner of the New York State Department of Social Services, Defendants.

The opinion of the court was delivered by: SAND

We deal once again with the plaintiffs, Kenneth and Selma Smith, *fn1" recipients of federal and state benefits under the Federal Supplemental Security Income ("SSI") program. Plaintiffs challenge a classification used by New York State in providing supplemental state benefits as violative of both the Social Security Act and its implementing regulations, 42 U.S.C. § 1382 et seq., 20 C.F.R. § 416.2030, *fn2" and the Equal Protection Clause. Plaintiffs seek declaratory and injunctive relief barring the defendants' practice of reducing the state supplement to eligible couples who are classified as "Living with Others".

In our previous opinion, we held that the Smiths' claim for prospective relief was rendered moot by the decision of the District Court in Termini v. Califano, 464 F. Supp. 797 (W.D.N.Y.1979), and by the representation by the Secretary that, in light of Termini, SSI recipients such as the Smiths would be transferred from the classification "Living with Others" to that of "Living Alone". *fn3" Gilchrist v. Califano, 473 F. Supp. 1102, 1107 (S.D.N.Y.1979). We further held that the Smiths could not obtain relief from this Court because they had failed to exhaust their administrative remedies regarding their proper classification, a pre-condition to our jurisdiction over the Secretary of Health, Education and Welfare ("HEW"). Id.

 Subsequent to the filing of our opinion, the Second Circuit in Termini v. Califano, 611 F.2d 367 (2d Cir. 1979) reversed the district court, with the consequence that the Smiths' claim for prospective relief is no longer moot. On April 15, 1980, this Court, on consent of the parties, ordered that so much of our prior opinion as related to the mootness of the Smiths' claim for prospective relief be withdrawn pursuant to F.R.Civ.P. 60(b)(5). We have since been advised that the Secretary of HEW has decided to waive the defense of exhaustion of remedies. *fn4" This Court can thus proceed to address the merits of the Smiths' claim for prospective relief.

 As we noted in our prior opinion, federal jurisdiction in this case is founded under 28 U.S.C. § 1343(3). *fn5" Id. at 1105-1106. The facts are not in dispute. The Smiths and the state defendant have made cross-motions for summary judgment. Plaintiffs' motion is denied and defendant's motion is granted.


 The Supplemental Security Income program, see Pub.L.No. 92-603, codified at 42 U.S.C. §§ 1381-1383c, provides benefits to aged, blind and disabled individuals who have income and resources below certain statutory amounts. 42 U.S.C. § 1382. SSI establishes a national minimum benefit level for all eligible persons and allows the states to provide additional benefits through state supplements. Id. § 1382e. As this Court has noted:

". . . If a state chooses to provide such supplement, it may enter into an agreement with the Secretary of the Department of Health, Education and Welfare (HEW) whereby HEW administers the state's supplementary payment program. Id. As a condition of such administration, however, the state supplementation plan must conform to federal regulations. Id.
The regulations pertinent to state supplementary payments provide two categories of recipients "Individuals' and "Couples' and allow each state to provide for up to five variations in payment level based upon the recipient's "living arrangement'. The regulations also provide, however, that any such differences in payment levels "must be based on rational distinctions between both the types of living arrangements and the costs of those arrangements.' 20 C.F.R. § 416.2030(b).
New York State has entered into an Agreement with the Secretary of HEW pursuant to which HEW administers the State's supplemental SSI payments, and pursuant to such Agreement and the federal regulations, the State has elected to provide for five different payment levels based on living arrangements. Three of those categories are group living situations which are not relevant to this action. The other two are designated "Living Alone' and "Living with Others'. N.Y.Soc.Serv.L. § 209(3)(a), (b) (McKinney's 1976). "Living Alone' is defined as "living in a private household composed of one eligible individual or one eligible couple'; "Living with Others' is defined in pertinent part as "living in a private household composed of an eligible individual or couple and at least one other person'. Id." Gilchrist v. Califano, supra, 473 F. Supp. at 1105.

 The Smiths are a married couple. In November, 1975, two minor grandchildren came to live with them, and they were consequently reclassified from "Living Alone" to "Living with Others", with a resultant reduction in per capita state benefits. Plaintiffs contend that the living arrangements, "Living with Others", as applied to married couples does not comply with the federal mandate that all variations in payment level be based upon "rational distinctions between both the types of living arrangements and the costs of those arrangements" or with the Equal Protection Clause. Plaintiffs here challenge the variation created only by the state scheme and do not challenge that differential arising from the federal program. *fn6" As will be discussed below, the basis of plaintiffs' argument is that an individual who is married suffers a per capita reduction in benefits since the benefits paid to a married couple are less than twice that paid to one living alone; when joined by another person in a household, a second per capita reduction in state SSI benefits takes place. However, when two unmarried persons are joined by a third person in their household, no reduction in per capita benefits results.

 We hold that the payment category of "Eligible Couple Living with Others" as provided by the state statute, does not violate the federal regulation and consequently, we need not reach the merits of plaintiffs' constitutional argument.


 Under the scheme here in issue, *fn7" an eligible couple *fn8" "Living Alone" receives $ 75.94 in state supplemental benefits, while an individual "Living Alone" receives $ 60.85. Affidavit in Opposition of John Hickey, Director, Bureau of Income Support (hereinafter cited as "Hickey Affidavit"), Exhibit "A". In short, a married couple receives lower per capita state benefits than do two individuals living separately. This initial reduction suffered by a married couple by dint of their marital status is not challenged by plaintiffs. It can be justified by the "commonsense proposition" underlying Termini that "individuals living with others usually have reduced per capita costs because many of their expenses are shared". Termini v. Califano, supra, 611 F.2d at 370.

 The state scheme further provides that when an individual "Living Alone" is joined by another, his per capita benefits drop from $ 60.85 to $ 8.18, because he is reclassified from the "Living Alone" category to "Living with Others". This reduction can again be justified by the principle of economies of scale three ...

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