In the case of Van Lare, Acting Commissioner, Department of Social Services of New York, et al. v. Hurley et al., 1974, the U.S Supreme Court ruled that a New York regulation which reduced public assistance to individuals living in homes where heating costs were included in rent was unconstitutional. The court found that this violated Title IV-A (Aid to Families with Dependent Children) and Title XVI (Supplemental Security Income for Aged, Blind and Disabled) of the Social Security Act by creating an arbitrary distinction between those who paid separately for heat and those whose heating costs were included in their rent payments. The ruling held that such distinctions must have some relevance to needs or goals recognized under federal law; otherwise they are invalid as being inconsistent with federally assisted programs designed to provide aid on a uniform basis throughout each state.

In the dissenting opinion for Van Lare v. Hurley, Justice William Rehnquist argued that the majority's decision to strike down New York's "shelter allowance" regulation was an overreach of judicial power. He contended that it is not within the Court’s purview to dictate how states allocate their welfare resources or determine what constitutes a reasonable standard of need. According to him, such decisions should be left up to state legislatures and administrative agencies who are more familiar with local conditions and needs. Furthermore, he disagreed with the majority's interpretation of Section 402(a)(23) of Social Security Act as requiring states to increase payments when costs rise; instead, he believed this provision merely prevents states from lowering their standards without federal approval. Overall, his dissent emphasized respect for state autonomy in managing public assistance programs.