New Law Takes Away MN Welfare if Used for Tobacco, Alcohol

Updated: 07/05/2012 9:19 AM By: Mark Albert

A new law took effect this week that will strip welfare recipients of their state benefits if they use public assistance to purchase alcohol or tobacco products.

The reforms were passed by the Republican-controlled Legislature and signed by DFL Gov. Mark Dayton in the 2012 session after an on-going investigation by 5 EYEWITNESS NEWS spotlighted Welfare Waste.

Beginning Sunday, July 1, 2012, the penalty for using welfare benefits to buy alcohol or tobacco is a loss of benefits under the Minnesota Family Investment Program, known as MFIP; general assistance; and supplemental aid. Such benefits typically come in the form of a cash portion of a client's Electronic Benefit Transfer (EBT) card, which is used much like a debit card.

The first conviction by a court, determination by an administrative hearing, or consent agreement with the client is punishable by a loss of benefits for one year, followed by a two-year suspension upon a second instance, and a permanent loss of benefits for the third offense.

It's the first time such penalties are in state law.

Further reforms are due to take effect in coming months. Beginning March 1, 2013, the cash portion of a Minnesota resident's EBT card can only be used within the state or in the surrounding states of Iowa, North Dakota, South Dakota, or Wisconsin.

The food stamp portion of a client's benefits are federally regulated and cannot be restricted by the states.

The geographic restrictions were proposed after a 5 EYEWITNESS NEWS story about Minnesota cash benefits being used 54,000 times during a one-month period in 2010 in all of the states, including Hawaii, as well as the U.S. Virigin Islands.

More than half of the Virgin Island transactions were later referred to fraud investigators.

At the time of those transactions, out of state use was not illegal, but some lawmakers were concerned about a lack of oversight over whether tobacco or alcohol were being purchased with public assistance funds.

Click here to watch our entire Welfare Waste investigation, which began in 2010.