In the case of Lukhard v. Reed, 1986, the Supreme Court ruled on whether certain types of income could be considered when determining eligibility for Aid to Families with Dependent Children (AFDC). The plaintiffs were Virginia residents who received irregular, non-recurring lump-sum payments and argued that these should not affect their AFDC eligibility. However, the Commissioner of Virginia Department of Social Services disagreed and counted such payments as income which resulted in a reduction or termination of benefits. The court held that federal law did not prohibit states from treating such lump-sum payments as income for purposes of calculating AFDC benefits. Therefore, it was within Virginia's discretion to count those funds as resources available to recipients over a period beyond one month after receipt.

In the dissenting opinion for Lukhard v. Reed, Justice Brennan disagreed with the majority's interpretation of the Social Security Act and its application to Virginia’s General Relief program. He argued that this misinterpretation allowed states too much leeway in determining which programs would be exempt from income calculations for federal assistance eligibility purposes. According to Brennan, this could potentially lead to a situation where individuals who are most in need might not receive aid due to their participation in state relief programs. Furthermore, he criticized the majority's reliance on legislative history rather than clear statutory language as a basis for their decision-making process. In his view, such an approach undermines legal certainty and predictability while also failing to respect Congress' role as law-maker.