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State proposal aims to plug loophole in ATM access to federal benefit money
BY CHELYEN DAVIS
RICHMOND--State Sen. Bryce Reeves has introduced a bill in the General Assembly that would bar some government benefit recipients from spending their checks at liquor stores, casinos or strip clubs.
But it's not because Reeves necessarily believes those benefits recipients are out whooping it up on the public dime.
Rather, federal law is requiring states to pass such bills, or risk losing the federal dollars that help pay for the Temporary Assistance for Needy Families benefits. Reeves, R-Spotsylvania, is simply carrying the bill at the request of Gov. Bob McDonnell's administration.
Last February, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012. The law did a lot of things, primarily extending the payroll tax cut through the end of 2012 and extending some unemployment benefits.
But it also requires states to "maintain policies and practices" to prevent TANF benefits from being accessed at any liquor stores, casinos or gambling establishments, or any "retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment."
TANF is a cash payment to those who qualify for government help. It is separate from the Supplemental Nutrition Assistance Program, which provides recipients money for food items.
Reeves' bill--and the federal law--are focused specifically on the spending of benefits through electronic transfers. With electronic transfer of benefits, recipients get a card like a debit card and use it to buy things at authorized retailers.
Some news reports had suggested the EBT cards were being abused by, for example, recipients withdrawing cash at casinos.
The EBT cards for TANF benefits can be used at ATMs. The federal law also requires states to develop policies to prevent access to benefits through ATMs located at the above locations.
If Virginia doesn't pass Reeves' bill--or something like it--the federal government could withhold up to 5 percent of the state's $7.9 million block grant for TANF benefits.
Chelyen Davis: 804/343-2245