Maine Welfare Lottery Winners from 2010 – 2014 Overview In early 2015, the Maine Department of Health and Human Services (“DHHS”) formally requested and received from the Bureau of Alcohol and Beverage and Lottery Operations (“BABLO”) a list of all individuals that have won a Maine lottery prize of $1,000 or more for the years of 2010 through 2014. Quick Facts This list of winners was data matched against an internal DHHS list which contained the following fields: $22,401,826 in winnings by individuals on benefits at the time of winning Total “check amounts” of $17,147,014 11 individuals each won $1,000 or more 10 or more times Eight individuals on welfare won single prize winnings of $500,000 or more since 2010 1. Open on Temporary Assistance for Needy Families (“TANF”) at the time of their win. 2. Open on MaineCare at the time of their win. 3. Open on Supplemental Nutrition Assistance Program (“SNAP”) at the time of their win. 4. Open on a combination of any of the three program listed above at the time of their win. Based on the results of this data match and subsequent analysis of winnings, it was determined that over the course of the last five years, there were thousands of welfare recipients who have won a total of $1,000 or more. In total, there was $22,401,826 in lottery winnings by individuals receiving welfare at the time of the winnings. Since 2010, 4,865 winning tickets of $1,000 or more were cashed in by 3,685 individuals who were receiving SNAP, TANF or MaineCare, or some combination of those benefits at the time they won. Program Integrity Welfare benefits are meant to go to the neediest and most vulnerable populations in Maine. Subsidizing recreational and problem gambling goes against the long-term objectives of TANF, SNAP and MaineCare. Total Winnings by welfare recipients Total individuals on welfare when they won more than $1,000 $6,332,730 $4,477,370 $4,866,087 930 960 968 2011 2012 2013 2014 $3,967,049 529 $2,758,590 2010 930 2011 2012 2013 2014 2010 DHHS – November 2015 2014 Agricultural Act Section 4009 of the Agricultural Act of 2014 states that: a. Households that receive “substantial lottery or gambling winnings (as determined by USDA) are ineligible for SNAP until the household meets the SNAP resources (assets) and income eligibility limits.” b. States must also “establish agreements with entities such as BABLO to determine whether individuals participating in SNAP have received substantial lottery or gambling winnings.” 1) Maine should introduce legislation which requires that within 7 days after paying a prize of $1,000.00 or more, BABLO shall notify DHHS of the name of and other available identifying information regarding the winner of the prize and the amount of the prize. 2) The Secretary for the U.S. Department of Agriculture has yet to define “substantial lottery or gambling winnings.” The common sense approach, which Maine DHHS could use, would be to define this as the proposed asset test amount or $5,000.00, and close any individual that has a lottery winning that meets this threshold. The Secretary’s failure to define “substantial” has left states in the lurch in regards to implementation of this rule. Looking at Michigan’s closures (roughly 10% of the identified winners were immediately closed) and applying this to Maine, it would result in approximately 100 people being removed from the program immediately. This would result in a cost avoidance of roughly $24,000 per month, or $291,600 per year (using the average SNAP benefit per household). Traditional Categorically Eligible Groups Under 7 USC 2014(a), traditional categorically eligible groups are established when all members of a household receive one of the following: social security benefits; state disability benefits; or benefits under a general assistance program which is administered by the State or a local government. In Maine, the State administers a cash assistance program called TANF (Family Independence Program in Michigan) that grants categorical eligibility for SNAP. Traditional categorically eligible groups cannot contain any members who are disqualified because of: an intentional program violation; an employment-related activity. 7 USC 2014(j) allows for “resource exemption for otherwise exempt households” as it provides that a household member who receives social security benefits under Title XVI of the Social Security Act (SSA), aid to the aged, blind, or disabled under Titles I, II, X, IXV, or XVI of the SSA, or who receives state benefits funded under Part A of Title IV of the SSA is considered “to have satisfied the resource limitations prescribed under subsection (g).” 7 USC 2014(g) prevents Maine from applying an asset test to these traditional categorically eligible groups for purposes of SNAP. For example, subsection(j) allows an individual that wins a million dollars to remain on the SNAP rolls until her SSI closes, even though DHHS – November 2015 Maine will have a $5,000 asset limit. According to SNAP regulations, lottery winnings are considered to be liquid assets in the form of non-recurring lump sum payments, which are excluded from income and counted as assets in the month received. If the person is not subject to an asset test, the winnings wouldn’t be counted towards income or asset. However, 7 USC 2015(a) states that “[i]n addition to meeting the standards of eligibility prescribed in section 5 of this Act [7 USC 2014], households and individuals who are members of eligible households must also meet and comply with the specific requirements of this section to be eligible for participation in the supplemental nutrition assistance program.” (Emphasis added.) The new lottery provision found in section 4009 of the Agricultural Act of 2014 was inserted into 7 USC 2015 as subsection 2015(s). Therefore, presumably, lottery and casino gambling winners with “substantial” lottery winnings will immediately lose their SNAP benefits, whether or not the household is categorically eligible, at least for the month in which the winning occurred. DHHS – November 2015