Electronic Benefit Transfer Cash Withdrawals Limited for Some Households

Some Electronic Benefit Transfer (EBT) card holders in Connecticut are no longer allowed to withdraw money from liquor stores, strip clubs, or casinos.

The welfare program is supposed to go toward necessities such as rent, food and clothes.

Most EBT cardholders use the money for its intended purpose.

“I go to the grocery store every month…I buy myself food… buy my family food. That’s what I use my EBT card for,” said Anthony Jackson.

However, in May 2012, the NBC Connecticut Troubleshooters reported that some EBT cardholders were withdrawing money from liquor stores and strip clubs. Almost two years later, not much has changed.

Data on 5,000 ATM machines from October through December 2013 shows EBT card holders are still withdrawing money from places like Centerfold’s Strip Club in Berlin, Worth Liquors in Bridgeport, Mohegan Sun in Uncasville and at least seven other similar businesses.

It’s unclear how much money welfare recipients withdrew from those locations, or how they spent the money. The Department of Social Services doesn’t track that data.

But as of Jan. 1, Connecticut put its federally mandated rule into effect, limiting some of those withdrawals.

“It does send a strong message to people that this may not be the most productive use of your time to get a job, to get employment or to make yourself as self-sufficient as you can,” explained DSS Deputy Commissioner Ray Singleton.

DSS said it's planning to do a cross-match on prohibited ATMs in the state. When someone tries to withdraw cash at a liquor store, casino or strip club using their EBT card, that person will first receive a warning letter explaining the penalties they could face.

“The second time this person does that and we catch them, we'll reduce their budget amount by the amount they used in that transaction,” said Singleton. “The third time they're caught, we'll suspend the benefits for a month, and then also reduce the amount by again, the purchase amount that they used to conduct that transaction."

After four transactions, DSS then has the right to remove that person’s benefits.

"Each state was given discretion to how they wanted to implement those rules, and Connecticut chose to do it this way," said Singleton.

The rule, however, doesn’t apply to everybody.

There are 37,000 EBT households in Connecticut, split into three groups. The first group, called Temporary Family Assistance, comprises 17,000 households. SAGA includes 5,000 households and is just for individuals. The third—State Supplement for the Aged, Blind and Disabled—has 15,000 households.

The new federal restrictions only affect the TFA group for families.

What about the other 20,000? DSS said they’ll monitor how effective the new rule works with the first group before deciding whether to extend the provision.

Until then, 20,000 welfare recipients will still be allowed to withdraw cash from wherever they want.

“It should be spread across the board,” said Jackson. “It's for your family, so why would you go gamble money out that they're giving you to help you and your family?”

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