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Mass. bill targets welfare fraud

Plan also gives incentives to hire recipients

Store owners who knowingly allow welfare recipients to buy lottery tickets, tobacco, and other prohibited items with benefit cards would face stiffer penalties under a bill expected to clear the Legislature in the coming days.

The legislation, which also includes incentives for businesses to hire welfare recipients, would amount to the most significant welfare revision since Governor William Weld signed a landmark bill in 1995.

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Legislators backing the bill say it strikes a careful balance between cracking down on fraud and helping recipients get on their feet.

“This bill outlines thoughtful changes to our welfare system,” Senate President Therese Murray said in a statement.

But advocates on the left and right say — for different reasons — that the legislation is flawed.

“Overall, it is disappointing,” said Deborah Harris, a staff attorney with the Massachusetts Law Reform Institute, a nonprofit law and policy center focused on poverty. “The legislature missed an opportunity to improve economic stability for very, very low-income people.”

Harris said the bill fails to address the most pressing needs of the poor — namely, enhanced housing and transportation subsidies — while making a complex system even harder to navigate.

Jim Stergios, executive director of the conservative Pioneer Institute in Boston, said the bill includes some significant changes, requiring women who receive benefits to work further into their pregnancies, for instance.

But he said the state should make more robust use of technology to track spending by welfare recipients and root out fraud.

“I would say it’s a really good step in the right direction, but it’s tweaking,” Stergios said. “It’s not close to what people were doing in the mid-1990s.”

The legislation signed by Weld in 1995, designed to push recipients from welfare to work, marked a major shift in policy. The bill forbade additional benefits for recipients who have more children and barred anyone from receiving more than 24 months of benefits in a five-year period.

President Clinton signed federal legislation built on similar principles a year later.

The number of households on the state’s main cash assistance program, now known as Transitional Aid to Families with Dependent Children, has dropped by half since the mid-1990s, to about 45,000.

The new legislation does not represent that kind of game-changing shift in policy. But it would make substantive changes in a welfare system that touches tens of thousands of Massachusetts families.

The Senate is expected to approve the measure Thursday and the House of Representatives to sign off on it in the days that follow.

Governor Deval Patrick has not indicated whether he will sign the bill.

The legislation is, in part, a reaction to the controversy that swirled last year around the Department of Transitional Assistance, which provides aid to about 1 in 7 people in the state.

A scalding inspector general’s report in January 2013 suggested the agency had squandered $25 million in aid, leading to the resignation of the department’s chief.

Suzanne Bump, the state auditor, followed with another report two months later that said the state had doled out millions of dollars in public assistance to people who were listed as dead or used more than one Social Security number to gin up their benefits.

The report also found the Department of Transitional Assistance could not account for 30,500 Electronic Benefit Transfer cards that had not been assigned to welfare recipients. The finding raised the specter of state employees diverting the blank cards for fraudulent use.

The new legislation would require better tracking of the unassigned cards and mandate the establishment of a fraud detection program that would flag, among other things, cash assistance spending outside of New England.

Bump’s report found card use as far away as Hawaii and Alaska, suggesting that recipients had moved out of state.

The legislation would also add televisions, stereos, and video games to the list of items welfare recipients are forbidden from buying with benefit cards.

The purchase of alcohol, tobacco, lottery tickets, pornography, firearms, and tattoos, among other things, is already verboten.

Store owners who knowingly allow welfare recipients to purchase forbidden items with benefit cards already face fines of up to $2,500.

The bill before the Legislature would mandate that store owners who violate the law for a second time face an automatic 30-day suspension of any licenses they hold to sell alcohol or lottery tickets.

Murray, the Senate president, was a chief architect of the 1995 welfare bill, which included a provision known as the “full employment program,” giving employers incentives to hire welfare recipients.

The underutilized program has been defunct since 2005. The new bill seeks to revive it by sweetening the pot for employers with health insurance subsidies for hired workers.

The legislation would also mandate that the Department of Transitional Assistance and the Commonwealth Corporation develop a “job diversion program” to connect able-bodied welfare applicants to jobs before they get on the rolls.

State Representative Kay Khan, a Newton Democrat who is House chairwoman of the Joint Committee on Children, Families, and Persons with Disabilities, said she understood liberal advocates’ arguments that the bill does not go far enough.

But given the pressure to crack down on welfare fraud after last year’s controversies, she said, lawmakers did well to include measures helpful to recipients.

The bill, for instance, would set aside $3 million for specialists who will provide employment and training assistance to those at high risk for long-term dependency.

“Sometimes you have to take baby steps,” she said.

The House of Representatives and the Senate passed separate versions of the bill months ago, but a compromise version came out of the conference committee last week.

The Senate was scheduled to take up the bill last Thursday. But the vote was delayed at the request of State Senator Robert Hedlund, the assistant minority leader, who asked for more time to review the provisions.

Hedlund, a Weymouth Republican, said that he was disappointed the final bill did not include language that was in the original version giving a public housing preference to legal citizens.

“I believe it is a fundamental obligation of government to ensure taxpayer funded benefits go to legal citizens,” he said in a statement.

“No illegal alien should be placed in public housing ahead of a legal citizen.”

David Scharfenberg
can be reached at david.scharfenberg@globe.comFollow him on Twitter @dscharfGlobe.
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