Thousands of lottery winners in one state are benefitting from public assistance, a new government report reveals. But many could lose those benefits -- even if their jackpot is as small as $1,000.
About 14 percent of lottery winners in Michigan were either receiving welfare benefits or living with welfare recipients, according to a report released this week by the state’s Department of Human Services. That’s approximately 3,500 lottery winners that are benefitting from welfare, the report found.
The release of the report is part of a law officials enacted last year, which requires Michigan Lottery to cross check its database of those with more than $1,000 in winnings to the state's list of welfare recipients. Though the state's DHS agency was able to close more than 500 cases as a result of the recent law, more than 2,000 remain outstanding, according to the report.
That’s because there are some government assistance programs that don’t require asset testing, according to Michigan DHS.
The report's findings come a little more than a year after the state enacted large-scale cuts to its welfare programs. The cuts caused the families of 46,000 children to lose cash assistance in the state, and critics alleged that such cuts were forcing needy families to turn to food banks and other non-profits for assistance.
For its part, DHS argues that the lottery program would ensure that welfare benefits are "preserved for those truly in need."
Michigan politicians passed the lottery law last year after two high-profile cases of jackpot winners collecting welfare benefits. The first man claimed in 2011 that he was still using food stamps despite winning $2 million in a state lottery. Then last year, the state charged another lottery winner with welfare fraud after she continued to collect food stamps despite winning $1 million from a state lottery game show. The winner, Amanda Clayton, died shortly after the controversy erupted.
Some states are weighing a controversial policy that would eliminate the problem altogether. Republican lawmakers in North Carolina pushed a proposal earlier this year that would ban welfare recipients from buying lottery tickets.