Lakewood Welfare fraud: 5 reasons it's hard for the poor to do


WATCH: Welfare raids in Lakewood

 

Allegations that several wealthy families in Lakewood scammed public assistance programs out of million of dollars has put a spotlight on the services that only are meant for the poorest in New Jersey.

The alleged complex scam used hidden income, fake applications and phony company owners to trick the government, authorities said. One law enforcement source told the Asbury Park Press that the scam was some of the "most significant financial fraud" cases that investigators have seen in recent years.

Press on Your Side talked with experts and found that obtaining government assistance, in programs such as those designed to help pay for food or welfare for families with children or single adults, is not easy. There are strict guidelines and requirements to obtain help. And the aid does not cover much.

In the late 1970s, future President Ronald Reagan talked about the abuse of the welfare system. "You really don't hear much about" that now, said Raymond Castro, senior policy analyst for New Jersey Policy Perspective in Trenton, a left-leaning research group. "All of these programs have greatly tightened up."

Here are five things to keep in mind about the state's public assistance programs.

1. Verification. When someone applies for any public assistance, such as general assistance for a single adult, or Temporary Assistance for Needy Families, their eligibility information is checked electronically on federal and state databases that, among other things, can track income.

"Fraud is greatly reduced for low-income people," Castro said. "For struggling, low-income people, these programs are run very tightly now."

The scheme in Lakewood that authorities said was run by wealthy people is "incredibly unusual," Castro said.

2. Who's eligible? The amount of public assistance someone can receive is based on household size and income. Marital status doesn't come into play, which means there is no financial incentive for a couple to be unmarried. "It's based on need," Castro said.

A three-person household, such as a mother, father and child, cannot have an income of more than 37 percent of the federal poverty level, or $636 a month or $7,632 a year.  A single adult who wants general assistance can't have a monthly income of more than 21 percent of the federal poverty level. That's $210 a month or $2,520 a year.

The eligibility levels have not risen in 30 years, Castro said. "The eligibility level is so low that only about 10 percent of all children living in poverty get any assistance whatsoever," Castro said.

According to a quarterly report from WorkFirst NJ, 21,319 families received TANF assistance as of June 30, 2016, down 7 percent from the previous quarter.

3. How much? A three-person household will receive $424 a month from Temporary Assistance for Needy Families. A single person will receive $140 in assistance.

"It's tough," Castro said. "They are trying to use their money for housing. They don't have a lot left over for anything else."

4. Strings attached. People who receive assistance must be in job training, looking for a work, or participating in an approved work activity. "Because the eligibility level is so low and the requirements are so high that just fewer people participate in this program. They just don't think it's worth it" to apply. Castro said. "It's just the opposite of what people think."

5. What about food stamps? The Supplemental Nutrition Assistance Program puts a person's benefit on a payment card. It can only be used for food, not prepared food, such as a rotisserie chicken, from the store. It can't be used to pay for alcohol either.

The average benefit is $238 a month, said Carlos M. Rodriguez, executive director of Fulfill, formerly the Food Bank of Monmouth and Ocean Counties.

Grocery checkout systems ensure that only eligible items are paid for using the card. Anything else isn't covered. "Most families run out of SNAP benefit by no less than the third week of the month," Rodriguez said. "A lot of people find themselves back at the pantry."

Rodriguez said the assistance program is working.

"So many people want to demonize some of the resources that our neighbors really need," he said. "It is here to remind us that anyone can fall on hard times."

 

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