State moves to block welfare party cash

KRQE TV

Updated: Jul 11, 2012 5:16 PM

SANTA FE (KRQE) — It's a safety net meant to help families in need.

Every month, thousands of New Mexico families get cash benefits paid onto EBT cards, benefits that can be withdrawn from ATM's across the state.

That money is meant for the bare essentials needed to get through day-to-day life.

"You shouldn't be buying things like movie tickets, alcohol, cigarettes or things of that nature," said Matt Kennicott with the New Mexico Human Services Department.

That's why in New Mexico, welfare cash benefits cannot be used to directly buy liquor, and money cannot be withdrawn from casino ATM's.

But there's a loophole. Cash benefits can be withdrawn from a wide variety of other ATM's across the state including those located in liquor stores and strip clubs.

While it's technically against program rules to spend money on strippers and booze--those caught could get their benefits cut off--tracking cash is difficult.

A federal change is pressuring New Mexico to crack down on where welfare benefits are used. Under a law signed by President Obama in February, states that don't block transactions at casinos, liquor stores and adult entertainment establishments will lose federal funding starting in 2014.

If New Mexico does not comply, it would lose approximately $5.5 million a year.

Kennicott said HSD is looking to work with other state agencies to identify ATM's located in strip clubs and liquor stores to begin blocking EBT card use there. It's possible the solution could come through a combination of legislative action and administrative changes.

"These are taxpayer dollars that get put out to the public, and we want to make sure taxpayers are receiving the best bang for their buck and fraud, waste and abuse are not being committed," Kennicott said.

W elfare and Medicaid fraud can be reported either through an HSD hotline, (800) 228-4802, or by e-mailing HSDOIGFraud@state.nm.us.

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