In the case of Townsend et al. v. Swank, Director, Department of Public Aid of Illinois et al., 1971, the U.S Supreme Court ruled that a state cannot deny federally funded benefits to residents based on criteria not included in federal law. The case involved an Illinois regulation denying Aid to Families with Dependent Children (AFDC) benefits to children attending college full-time but living away from home during school breaks or vacations. This was contrary to federal AFDC guidelines which did not include such restrictions and considered these students as still being part of their parents' household even when temporarily absent due to school attendance. The court held that this state regulation violated the Social Security Act by imposing eligibility requirements stricter than those set forth by Congress and ordered it invalidated.

In the dissenting opinion for Townsend et al. v. Swank, Justice Rehnquist argued that the majority's decision was an overreach of federal judicial power into state affairs. He contended that Illinois' policy to discontinue public aid to college students who had reached their 21st birthday did not violate the Social Security Act or Equal Protection Clause of the Fourteenth Amendment as claimed by plaintiffs and upheld by majority justices. According to him, it is within a state's rights to set eligibility criteria for its welfare programs based on age limits without being discriminatory or unconstitutional in nature; such decisions should be left up to individual states rather than dictated by federal courts.