A new state rule announced by the LePage administration Tuesday that would terminate food stamp benefits for those who win $5,000 or more in the state lottery or by gambling may be redundant and superseded by federal rules because Congress already has passed a similar law.

The federal Agricultural Act of 2014 bars those with “substantial” lottery or gambling winnings from receiving food stamps.

“Any household in which a member receives substantial gambling or lottery winnings (as determined by USDA) will immediately lose eligibility for (food stamp) benefits until they again meet normal income and resource standards,” according to a March 2014 memo by the U.S. Department of Agriculture.

Though the provision of the 2014 bill governing gambling or lottery winnings has not yet been implemented, any state regulations would have to conform with rules devised by the USDA because food stamps are a federal program.

Chris Hastedt, public policy director for Maine Equal Justice Partners, a progressive social advocacy group, said the Maine rule is redundant.

“What does this really do? Because Congress has already addressed this issue, states are precluded from acting on their own,” Hastedt said. Ubon Mendie, a USDA spokesman, said he couldn’t comment on whether the Maine rule would pass muster because federal officials have yet to review Maine’s rule on lottery winnings and food stamps.

The Maine Attorney General’s Office had no comment on the possible conflict between federal and state policies. Samantha Edwards, DHHS spokeswoman, did not respond to requests for comment on the potential conflict.

The federal law was in response to a few high-profile cases of lottery winners continuing to collect food stamps after winning the lottery, including a Michigan woman who collected food stamps after winning $1 million in the state lottery in 2012.

The USDA memo says that lottery winnings are included among “provisions that are not to be implemented until federal rulemaking occurs.”

The federal government has yet to finalize the rules or define a monetary threshold for what “substantial” means.

How many people would be affected by the state policy also was not immediately clear Tuesday, but it’s a small fraction of the 190,000 Mainers who currently receive food stamps.

From 2010 to 2014, there were 4,856 winning lottery tickets of $1,000 or more that were cashed by 3,685 people who were receiving food stamps, Temporary Assistance for Needy Families benefits or MaineCare at the time they won, Maine DHHS said.

The winners received more than $22 million in prizes while on welfare programs, the department said.

DHHS and lottery officials said they couldn’t immediately say how many won $5,000 or more.

Hastedt said whatever the number is, it’s insignificant compared to the many people receiving food stamps and in danger of going hungry.

Also, a law passed this year forbids Mainers from spending welfare money on lottery tickets, tobacco, liquor and bail.

“In no way, shape or form should taxpayers be asked to foot the bill for someone who is gambling and winning huge amounts of money,” said Mary Mayhew, health and human services commissioner. “Welfare benefits shouldn’t be used for gambling or lottery, and someone who beats the long odds and ‘wins big’ shouldn’t continue receiving assistance while he or she has that money. Along with our recent ban on using welfare benefits to purchase lottery tickets, this rule makes sure that taxpayers aren’t subsidizing gambling or giving benefits to those who have other means.”

The new rule allows for the immediate termination of food stamp benefits when a welfare recipient collects winnings of $5,000 or more in one calendar month, the department announced in a statement. A recipient could reapply the next month, but the winnings will count as an asset that could disqualify the person from TANF benefits under the asset limits adopted by the LePage administration in January.

Assets considered when determining eligibility for welfare programs include the bank account balances, snowmobiles, boats, motorcycles, jet skis, all-terrain vehicles, recreational vehicles, campers and other valuables. Assets that are excluded include equity in a home or a household’s primary vehicle.

In January, DHHS approved a rule that required people who apply for food stamps to disclose their assets. If assets exceed $5,000, some applicants are ineligible for benefits.

“This rule is consistent with recent Congressional reforms regarding the food stamp program and lottery winnings designed to ensure that this taxpayer funded benefit is appropriately supporting those who truly need the welfare assistance,” Mayhew said in a prepared statement. “Just like when we limited the amount of assets someone could have while receiving welfare benefits, this change ensures individuals are not using the program when they don’t need it. It allows taxpayers to have faith in the system and know their tax dollars are going where they are most needed.”

 

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