Kansas plans to keep a controversial $25 limit on ATM withdrawals by welfare recipients, despite the possibility that the restriction might violate federal law.
Despite legislation passed earlier this year to raise the limit, or do away with it entirely, a newly revised version of Kansas’ welfare plan does not permit withdrawals of more than $25 per transaction per day. Out-of-state purchases also will be blocked.
A fee of $1 will be collected for every transaction, not including additional bank ATM fees.
There is one loophole, however: Kansas’ plan — released publicly for the first time this week — places no limits on cash-back money received while making a purchase at a store. Welfare recipients are allowed two free cash-back transactions per month, but will be charged a forty cent fee for each additional transaction.
To remain eligible for welfare block grants from the federal government, states must ensure that recipients of Temporary Assistance for Needy Families, or TANF, can receive “adequate access to cash assistance” with “minimal fees or charges.” as required by the Social Security Act.
Kansas’ $25 ATM withdrawal limit was passed as part of a strict welfare bill that also prevented recipients from using their benefits at movie theaters and swimming pools.
Kansas receives $102 million in annual grant funds from the federal government. If the U.S. Department of Health and Human Services determines that the state’s $25 ATM limit violates the Social Security Act, those funds could be in jeopardy.
After McClatchy reported the potential conflict, Brownback signed a “fix-it” bill in June that allows Phyllis Gilmore, secretary of the Kansas Department for Children and Families, to raise or eliminate the $25 limit in order to comply with federal law.
But a spokeswoman for the state department said on Friday that the $25 cash limit reflects what was passed and signed into law.
“The legislative fix does not give the secretary unilateral authority to change the limit,” said the spokeswoman, Theresa Freed.
Freed said language in the fix-it bill only allows the limit to be changed with ‘guidance’ from the federal government.
“There have been conversations,” she said, “but we’ve received no guidance.”
HHS’ Administration for Children and Families now is reviewing a copy of the new welfare plan it received from the state of Kansas on July 30, said Kenneth J. Wolfe, a spokesman for the agency, in an email.
The next step is for HHS to determine whether the plan meets the requirements of federal law, Wolfe said. “We will work with the state to resolve any issues that require clarification.”
At least for now, Kansas welfare recipients will not be subject to the $25 withdrawal limit.
Freed said that the changes are estimated to take at least six to 12 months to implement. The department will inform the public when the ATM limit goes into effect, she said.
The $25 ATM withdrawal limit was passed as part of a strict welfare overhaul bill that also prevented welfare recipients from using their benefits certain places, including movie theaters and swimming pools, and shortened the amount of time people in Kansas can receive assistance.
Bryan Lowry of the Wichita Eagle contributed to this report from Topeka, Kan.
Lindsay Wise: 202-383-6007, @lindsaywise