Tuesday July 23, 2013

CONCORD, N.H. -- New welfare rules taking effect next year in New Hampshire will penalize people for spending their cash assistance on booze, gambling and at strip clubs.

The Legislature included the new limits in the budget package that passed last month. Congress adopted the limits last year and required states to change their laws to conform by 2014.

Terry Smith, director of the state division of family assistance, said Monday that the state is in the informing the 13,000 people affected by the law about the penalties for noncompliance.

Smith said breaking the law the first time will cost the recipient one month’s cash assistance. A second offense will cost the person two month’s assistance and the third and subsequent offenses will cost the person three month’s assistance.

Smith said the law bars using Electronic Benefits Transfer cards or cash obtained from the cards at liquor stores, places that primarily sell beer, wine or other alcoholic beverages, gambling establishments that include charity gambling facilities licensed by the state to run table games and bingo, and at adult clubs "in which performers disrobe or perform in an unclothed state for entertainment."

The state uses EBT cards to provide assistance to 3,683 welfare clients, 1,453 poor elderly clients, 155 poor blind residents and 7,841 people with disabilities. The cards can be used to pay for merchandise and withdraw money from an ATM.

Former Republican House Speaker William O’Brien -- a critic of the cash assistance program -- said Monday that even stronger controls are needed. O’Brien sided with a convenience store clerk last year who refused to sell cigarettes to a welfare recipient and said then that tighter controls were needed, including eliminating the ability to withdraw cash from ATMs.

"I don’t think cash should be put on those cards," O’Brien reiterated Monday. "The funds should be dedicated to a specific purpose: food, shelter."

Smith argues that not all transactions can be made electronically, including payments to landlords. If the state assumes responsibility for paying landlords and others directly, more staff will be needed at a higher cost to taxpayers.

Smith acknowledges enforcing the new law will be difficult and depend on retailers notifying the state of infractions. The state will then investigate to see if the law was broken, he said.

"The way we’re going to know is through observation," he said. "It’s going to be very difficult to prove."

O’Brien argues the state should track purchases like credit card companies do, but Smith said EBT cards don’t identify the type of purchase. Transactions occur as invisibly as any other debit card purchase.

"The department -- like the general community -- doesn’t like this one bit that we don’t have the technology and tools to hold people more accountable," Smith said.