An appeals court in Pennsylvania affirmed a trial court ruling on Thursday which held that welfare fraud and outstanding restitution balance cannot be used to justify the denial of housing assistance. The decision signaled a win for applicants seeking housing vouchers in Pennsylvania.

The appeal, heard before the Commonwealth Court of Pennsylvania, concerned the Lawrence County Housing Authority’s decision to deny the appellee’s application for assistance under the Housing Choice Voucher Program, otherwise known as “Section 8.” Funded and regulated by the US Department of Housing and Urban Development (HUD), the program is administered through local entities and aims to provide housing assistance for low-income, disabled, and elderly individuals.

After a background check showed the appellee had a history of “welfare fraud” and outstanding restitution owed in relation to her criminal case, the Housing Authority marked the appellee’s application as “inactivated” and advised that it would not be reactivated until she paid her remaining restitution. Following a hearing with the Housing Authority, the appellee was once again formally denied. Ultimately, the appellee brought the matter before the Court of Common Pleas of Lawrence County which found that the Housing Authority abused its discretion. Under 24 C.F.R. § 982.553(a)(2)(ii)(A)(3)-(4), the Housing Authority:

[M]ay prohibit admission of a household to the program if [it] determines that any household member is currently engaged in, or has engaged in during a reasonable time before the admission…other criminal activity which may threaten the health, safety, or right to peaceful enjoyment of the premises by other residents or persons residing in the immediate vicinity; or other criminal activity which may threaten the health or safety of the owner, property management staff, or [administrative personnel].

The trial court found that, because the findings of the appellee’s background check did not suggest a threat, the Housing Authority abused its discretion. In reviewing the decision, the appeals court confirmed the lower court’s conclusion, reasoning that “it is not criminal activity alone that forms a sufficient basis to terminate Section 8 benefits.” Criminal activity must “threaten the health, safety, or right to peaceful enjoyment of residents and/or persons in the immediate vicinity thereof.”