GOP budget plan restricts use of welfare debit cards

EBT card
An EBT, or Electronic Benefits Transfer card is used by Minnesota welfare recipients for food and cash assistance.
MPR Photo/Jeffrey Thompson

Welfare recipients would still be able to use most ATMs to access their monthly benefits under the Health and Human Services budget released by a conference committee last week.

The budget includes some restrictions on welfare cards proposed by Republican lawmakers earlier in the year. But the ATM prohibition, which attracted the most concern from people who receive welfare and their advocates, was removed.

Republican lawmakers have said some restrictions are needed to prevent welfare recipients from spending the money on alcohol, tobacco, tattoos, and lottery tickets.

The proposal still needs to pass the Legislature and receive Gov. Mark Dayton's signature before it becomes law. That's no small feat. The Democratic governor's Health and Human Services budget differs from the Republican-controlled conference committee version by about $1 billion.

Negotiations to iron out a budget by May 23, the end of the regular legislative session, could result in more changes to the welfare proposal.

The state uses Electronic Benefits Transfer (EBT) cards, which resemble debit cards, to distribute monthly cash assistance from several welfare programs. The amounts are low -- up to $203 a month for single adults and $532 a month for a family of three.

People who receive the benefits said the ATM restriction would have made it impossible to get cash to pay for basic needs, like rent and laundry.

A MPR News review of a month's worth of transaction data found welfare misuse was minimal. About 0.01 percent of non-food support money was spent or withdrawn at stores with a name that includes the word "liquor." Some of those retailers also sell groceries.

The current proposal, like earlier versions, would make it illegal to use an EBT card to buy tobacco and alcohol and would restrict the card's use to within Minnesota. Those who attempt to use the card to buy tobacco or alcohol would be charged with a petty misdemeanor.

The law would not apply to food support money, which recipients get via the same transaction card, but is regulated by the federal government.

Instead, the law would create a separate card to distribute welfare money from state-run programs. The name of the head of the household would be printed on the card, along with the statement, "It is unlawful to use this card to purchase tobacco products or alcoholic beverages."

Retailers would not be penalized for selling tobacco or alcohol to a recipient. But the law would require liquor stores, tobacco stores, gambling establishments and tattoo parlors to work with credit card processors to block cash withdrawals at ATMs and cash registers located inside their stores. All other ATMs located elsewhere would be unaffected by the legislation.

The law would create a Minnesota EBT Business Task Force to create a plan to prevent people from using the card to buy alcohol and tobacco.

The task force would include lawmakers, the commissioner of the Department of Human Services, a representative from the Minnesota Grocers Association and a credit card processor. The task force would provide its recommendations by April 2012.