Despite a restrictive law aimed at combating welfare fraud, the Michigan Department of Human Services announced on Monday that 3,500 lottery winners collected food assistance last year.
According to DHS Director Maura Corrigan, only sixteen percent of lottery winners are now restricted from collecting aid, which she attributes to “glitches” in federal asset-testing requirements.
Corrigan recommends that lawmakers enact a law similar to one in New York, allowing the state to withdraw money from lottery winnings and redistribute it to taxpayers.
The Michigan law, signed by Governor Rick Synder last April, requires that the Michigan Lottery notify the DHS when winnings exceed $1000. It also requires the DHS to perform an asset test, ensuring that welfare recipients possess no more than $5,000 in total assets.
Despite criticism that the law draws attention to an insignificant problem (average winnings only amount to $6,800), Snyder stated that the law aims to aid “vulnerable citizens” and “protect taxpayers”.
The law arose after welfare recipient Amanda Clayton failed to report her $1 million jackpot winnings last April, and was later charged with felony welfare fraud.