The Nation : U.S. Reverses Policy on Welfare Loans

The federal government has reversed its policy of counting loans as income for welfare recipients after a Nevada lawsuit showed the practice has violated the law since its inception five years ago, officials said. The lawsuit and similar cases in other states, including California, prompted the U.S. Department of Health and Human Services to change the policy last week, according to a motion filed in U.S. District Court in Reno. A department spokesman said he could not say how many people nationally would be affected. Anticipating the judge’s ruling against the federal government in the case, attorneys for the federal agency requested a 30-day delay in a final order so they could work out a settlement. The 1986 class-action suit was filed by Nevada Legal Services on behalf of state residents denied benefits. In the proposed settlement at the state level, Nevada agreed to repay 60 people $11,767 for welfare payments that were denied when personal loans were counted as income.