Michigan man still on food stamps despite winning $2M

[preciousjeni]

Apparently, because he took a lump sum, it's considered a liquid asset instead of income. Unfortunately, the "loophole" that allows him to do this is the same one that allows people who have lost their jobs to keep their homes.

It's unfortunate because I foresee a drastic decision being made that will affect thousands of people in the name of cutting off services to this man.

[Ch2tf]

Originally Posted by preciousjeni

Apparently, because he took a lump sum, it's considered a liquid asset instead of income. Unfortunately, the "loophole" that allows him to do this is the same one that allows people who have lost their jobs to keep their homes.

It's unfortunate because I foresee a drastic decision being made that will affect thousands of people in the name of cutting off services to this man.

This may be true but it angers me (and others) no less. Not too long ago a friend lost her job and could barely make it week to week on unemployment. She went to see if she qualified for food stamps and they offered her $10 a month because she made too much

[preciousjeni]

Originally Posted by Ch2tf

This may be true but it angers me (and others) no less. Not too long ago a friend lost her job and could barely make it week to week on unemployment. She went to see if she qualified for food stamps and they offered her $10 a month because she made too much

I can't speak for other states, but in NY, if you let a sufficient amount of time pass from when you lost your job, you can get various forms of public assistance. The worst time to go is right after you've lost your job and you had steady income up to that point.

Regardless, the way public assistance is set up, it mostly benefits children, elderly people, disabled people and the like. They seem to expect the rest of us to bounce back like nothing happened when we lose our jobs or undergo another major life crisis.

My point in commenting was to bring attention to the fact that people, like your friend, would really be up a creek if their assets (savings, house, car, etc.) were factored into how much they're eligible for.

[AGDee]

Originally Posted by preciousjeni

Apparently, because he took a lump sum, it's considered a liquid asset instead of income. Unfortunately, the "loophole" that allows him to do this is the same one that allows people who have lost their jobs to keep their homes.

It's unfortunate because I foresee a drastic decision being made that will affect thousands of people in the name of cutting off services to this man.

I agree to an extent. If you liquidate retirement funds while in dire straits financially and use it to pay off your house or something, then I could see still allowing food stamps. There are ways to close this particular loophole without hurting too many people. There could be a threshold that is much lower than $850K after taxes.

[preciousjeni]

Originally Posted by AGDee

I agree to an extent. If you liquidate retirement funds while in dire straits financially and use it to pay off your house or something, then I could see still allowing food stamps. There are ways to close this particular loophole without hurting too many people. There could be a threshold that is much lower than $850K after taxes.

I'm with on you the concept. I just can't help but think of people who have high value houses that they can't unload. Closing the loophole would get complicated pretty quickly, which is my concern. It will be interesting to see how the politicians spin this one.

[PiKA2001]

Originally Posted by preciousjeni

It's unfortunate because I foresee a drastic decision being made that will affect thousands of people in the name of cutting off services to this man.

According to the articles I read the loophole fix will be a law stating that lottery winners cannot be eligible for public assistance.

I think it's misguided because what about the people who won the lotto 30 years ago but are legitimately broke now?

I also think that liquid assets should be factored into the equation. If you have $300k sitting in a savings account you shouldn't be eligible for welfare, regardless of income.

[ASTalumna06]

Originally Posted by PiKA2001

According to the articles I read the loophole fix will be a law stating that lottery winners cannot be eligible for public assistance.

I think it's misguided because what about the people who won the lotto 30 years ago but are legitimately broke now?

Um... tough luck?

People need to realize that even when you win 1 million dollars, it doesn't mean that you don't have to work (unless maybe you have a spouse that's willing to bring in all the money, or some other circumstance where money is still steadily coming through the door). Even a person who makes $40,000/year, every year, for 50 years, will make 2 million dollars in their lifetime (and that's not even factoring in taxes).

Why is it that the people who were handed half of that can't afford to eat and expect us to put food on the table for them, but the guy who worked his ass off for every penny his whole life is expected to feed himself?

I think everyone needs a wake-up call.