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$69M in Calif. welfare money spent out of state

Posted by on Aug. 17, 2011 at 9:40 AM
  • 9 Replies

Thousands of documents show tens of millions of welfare dollars have been spent out of state, some at vacation resorts. The discovery is leading to new legislation to prevent welfare abuse.

One lawmaker is calling for an end to taxpayer-funded vacations, as he calls it, for welfare recipients, but welfare supporters say that is just a political ploy. California already has one of the lowest fraud rates in the country.

Welfare offices in California have been jam-packed during this recession with applicants needing cash assistance for basic needs like food and shelter.

However, under new legislation about to be introduced by Assemblyman Ted Gaines, R-Roseville, welfare recipients may have to start spending their benefits only within the state.

A Los Angeles Times analysis found $69 million was spent outside state lines during a three and a half year period beginning in January 2007 at tourist destinations like Las Vegas, Hawaiian beaches and cruise ships in Florida. Critics call that "taxpayer-funded vacations" at a time when taxpayers can't afford one themselves.

"These are for folks that are hurting, that are out of job, and you see that money is spent on a cruise, then obviously, it's fraudulent," says Gaines.

Benefits are deposited electronically onto welfare cards that are used like a debit card in stores or to withdraw cash at certain ATMs.

The Times analysis found nearly $12 million was spent in Las Vegas, $1.5 million in Florida, $387,908 in Hawaii, and $16,010 withdrawn from ATMs on cruise ships.

But welfare supporters point out $69 million is less than 1 percent of the $11 billion the state gave out during that period.

"When people go on assistance, they're going to have the same kind of life situations come up as anyone else. You're going to visit your sick relative. You're going to go to funerals out-of-state. That's what's going on here," says Mike Herald from the Western Center on Law and Poverty.

The state says accounts aren't normally flagged until out-of-state transactions continue for more than 30 days because recipients aren't supposed to be gone that long.

"The vast majority of our families who are receiving benefits do so in a legal, lawful manner," says John Wagner, Director of the California Department of Social Services. "If someone is withdrawing benefits to feed their kid while they're taking care of an aging grandparent, that's allowed."

Taxpayer groups say it's time to move to a voucher system.

"Giving welfare recipients cash is always risk-inherent," says Jon Coupal from the Howard Jarvis Taxpayers Association.

Another problem is when welfare recipients don't use certain ATMs, taxpayers pick up those extra fees. Last year, the state paid more than $11 million in ATM surcharges, and we'll likely surpass that this year because bank fees have gone up.

http://abclocal.go.com/kgo/story?section=news/politics&id=7704795

by on Aug. 17, 2011 at 9:40 AM
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Replies (1-9):
Stephanie329
by Ruby Member on Aug. 17, 2011 at 9:47 AM
I'm mostly shocked at the ATM surcharge. Why wouldn't that just come out of the recipients cash benefit? That's what happens with any other debit card. You use an ATM that has a fee of $3, that's $3 less that you have to spend.
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Stephanie329
by Ruby Member on Aug. 17, 2011 at 9:49 AM
Clarifying the above: how is the ATM surcharge costing the state more money and not the individual using that card?
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candlegal
by Judy on Aug. 17, 2011 at 9:50 AM

I was going to answer, but I think I am going to keep my mouth shut on this one.

Quoting Stephanie329:

Clarifying the above: how is the ATM surcharge costing the state more money and not the individual using that card?


867-5309
by Bronze Member on Aug. 17, 2011 at 9:51 AM

 

Quoting Stephanie329:

I'm mostly shocked at the ATM surcharge. Why wouldn't that just come out of the recipients cash benefit? That's what happens with any other debit card. You use an ATM that has a fee of $3, that's $3 less that you have to spend.

 Because that would be logical and the gov is far from logical.

"Be the change you want to see in the world"  -Gandhi

rachel226
by Bronze Member on Aug. 17, 2011 at 9:56 AM

 I've never been to a funeral on a cruise ship before. Sounds interesting. I cant seem to remember even one of my "sick relatives" having visitors on a cruise ship either. I guess my family is just weird.

stormcris
by Christy on Aug. 17, 2011 at 10:00 AM

Wait a minute:

How are they getting to Florida and Hawaii?

I think they might need to see if some of these people are scamming the system. I don't think welfare would be enough for those type trips.

candlegal
by Judy on Aug. 17, 2011 at 10:05 AM

That is the 69 million dollar question

Quoting stormcris:

Wait a minute:

How are they getting to Florida and Hawaii?

I think they might need to see if some of these people are scamming the system. I don't think welfare would be enough for those type trips.


867-5309
by Bronze Member on Aug. 17, 2011 at 10:07 AM

 

Quoting Stephanie329:

Clarifying the above: how is the ATM surcharge costing the state more money and not the individual using that card?

 I asked this once of a family friend who works for social services.  She said that cash benefits comes from one large account that the recipients draw from.  Your card is only allotted x amount of dollars per month.  So when you withdraw $50 it decreases your amount allotted on the card and charges an ATM fee to the account.  It was designed that way after the first recipients complained that since they could only take from certain ATMs and they weren't available everywhere that it took more money in transportation fees to travel to the ATM than to pay the fee.  Of course that was over 15 years ago when the program first started to switch from checks to debit cards when limited banks accepted the cards.  Now a plethora of banks take the cards without penalty fees so the travel excuse is no longer a valid one.

"Be the change you want to see in the world"  -Gandhi

BleedinHeartMom
by on Aug. 17, 2011 at 10:08 AM

Just like our tax money paid for CEO's to go on luxurious cruises, buy up private jets,etc.. it don't matter who it is, this country is just too damn greedy

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