Michigan's Lottery Winners Still Cashing in on State's Welfare System
More than 3,500 lottery winners in Michigan received public assistance last year or lived with people on welfare, food stamps, or other aid, a state agency reported Monday.
The count stems from a 2012 state law that required the state to match a list of lottery winners of $1,000 or more with recipients of public assistance. Republican Gov. Rick Snyder signed the measure after legislators learned of two cases in which people used food stamps despite winning $700,000 and $850,000 lump sum prizes.
Though the law included a requirement for asset-based means testing to help determine eligibility for public assistance, the head of the state Department of Human Services said more than 2,000 lottery winners are continuing to receive public aid because certain benefits are not covered by the tests or because of other issues. Just 565 cases were closed as a result of the law, according to the report, which discussed a man who won $33,000 in the lottery but continues to get $1,000 a month in child care assistance for his three children.
"With the match system, we can now identify substantial winnings, but the loopholes that allow lottery winners to continue to collect various benefits need to be closed, through amending state and federal law and policy," DHS Director Maura Corrigan said in a statement.
About 14 percent of lottery winners are either welfare recipients or live in a household with recipients, according to the state. The 3,544 winners took home $6,800 on average, prompting some advocates for the poor to question the extent of the problem.
"We agree that big lottery winners should not be getting benefits designed to help people meet basic needs," said Judy Putnam, spokeswoman for the Michigan League for Public Policy. "But having said that, the cases that seem to be driving this—they're extremely unusual and rare. How much have we been spending to get to a few bad apples?"
DHS officials said they will seek changes in laws and policies so public assistance is ended for more lottery winners. Corrigan said a man recently won $125,000 in the lottery but his children living with him can keep getting $400 a month in food stamps if they say they buy and prepare their food separately.
Putnam countered that some legitimately needy people have been hurt by the state's move toward means testing assets instead of income to determine eligibility for public assistance. Unemployed workers once could use their savings to keep making house payments while receiving food stamps to try to get back on their feet, she said.
"It cast such a broad net that it did hurt people with legitimate needs," Putnam said of the law signed in April 2012.