LANSING (AP) – The state of Michigan can take away welfare benefits under a five-year federal limit even if recipients still might qualify for cash under state law, a state appeals court ruled Wednesday.

The court overturned a decision in a closely watched dispute over welfare spending. A Genesee County judge had said Michigan Department of Human Services Director Maura Corrigan lacked authority last fall to enforce the five-year limit against more than 11,000 families.

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Michigan has a four-year limit, but the clock stops when someone with a disability can’t work or when family members are caring for a disabled spouse or child and can’t hold an outside job.

The Human Services Department said it would adhere to the stricter federal cap in an attempt to save more than $70 million a year. Without it, the state would be spending beyond five years.

“The circuit court erred in finding that the DHS director has no authority under the Social Welfare Act to impose this limitation. Other statutory provisions … authorize the DHS” to take action, said judges Patrick Meter, Deborah Servitto and Karen Fort Hood.

Corrigan said she was pleased with the decision.

The Saginaw-based Center for Civil Justice, which filed the lawsuit, said many families are on the verge of losing housing or utilities. The group claims the state could use federal money instead of state money.

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“We are disappointed by the decision and are worried about its impact on thousands of needy families,” director Terri Stangl said in a statement.

“I spoke to a woman who was the caregiver for five children as well as a mother with disabilities,” Stangl said. “She has been applying for jobs the last six months without success. She is about to lose her water service, and soon will be homeless.”

Stangl said the group is reviewing its options.

The appeals court addressed the key dispute in the lawsuit but sent the scaled-down case back to Genesee County court to look at other issues.

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