Sunday, March 4, 2012

Legislature Debates Tougher Penalties for Violations of Public Assistance Programs

Assembly Debate Scheduled for Tuesday on Sanctions for W-2 Violations

In recent months, there has even more political attention than usual to the subject of “waste, fraud and abuse” – and especially to fraud in receiving public benefits, such as food stamps or W-2 assistance.  A pair of companion bills, SB 426 and AB 534, that have been progressing through the legislature are intended to punish intentional program violations by making it easier to disqualify people from receiving future W-2 benefits or emergency assistance.  

Both versions (which are nearly identical) are scheduled to be debated on the Senate floor on Tuesday, March 6.  In recent weeks, Senate and Assembly committees have made a couple improvements to the twin bills; however, another significant amendment offered by Senator Erpenbach was rejected last week by the Senate Committee on Judiciary, Utilities, Commerce, and Government Operations.

Under current law, a person may be permanently denied W-2 benefits if a court finds or if it is determined after an administrative hearing that the individual has intentionally violated any W-2 statutes or rules on three separate occasions.  There are a number of sanctions in the law for program violations, but the denial of future benefits is limited to people committing 3 intentional violations. 

The initial version of the two companion bills included several statutory changes to make it easier to prospectively suspend or terminate benefits, including a redefinition of “intentional violation” to delete the requirement of intent!  Fortunately, the Assembly and Senate committees both voted unanimously last week to restore the element of “intent” to that definition (Assembly Amendment 2).  

Other statutory changes that remain in the proposed legislation and make denials of benefits easier to impose include:
  • allowing the denial of benefits to also apply to emergency assistance for low-income families;
  • creating a graduated scale of penalties for program violations (including first and second violations); and
  • allowing the determinations of violations to be made by W-2 agencies, county departments, or the Dept. of Children and Families (without having to go through a formal administrative hearing).
We think the last of those changes is particularly worrisome because it will make it far easier for families to be sanctioned, and because W-2 agencies aren’t disinterested parties. Private W-2 agencies could profit by using these sanctions to reduce the benefits for the families they are contracted to serve.    

Unfortunately, the committee voted 3-2 against an amendment supported by Legal Action of Wisconsin and WCCF that would have mitigated the effect on children of a parent’s violation.  That amendment, offered by Senator Erpenbach, would have provided for the continuation of benefits for dependents, by making “vendor payments” directly to the landlord or mortgagee of the family’s residence.  

A summary of the bill and the two amendments that were approved by the Assembly and Senate committees can be found in a March 2nd Legislative Council memo.  

Jon Peacock

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