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Public assistance recipients earning double their income in benefits, report finds

By   /   August 9, 2012  /   3 Comments

By M.D. Kittle | Wisconsin Reporter

MADISON – A Wisconsin lawmaker says the state’s “generous” suite of publicly funded benefits is a disincentive to work and an assault on hard-working, middle-class wage earners.

And state Sen. Alberta Darling contends a new study underscores the problem.

The River Hills Republican points to the recently completed analysis by the nonpartisan Legislative Fiscal Bureau, which took a look at social service programs and their payouts at Darling’s request.

Darling asserts a Wisconsin family receiving government benefits could qualify for nearly triple their yearly salary.

For instance, a single parent with one child earning $15,130 could conceivably receive up to $43,277 between income, benefits and the state’s refundable tax credits.

Public assistance includes everything from health care to food stamps to Wisconsin Shares, the state’s subsidized child-care program.

The senator, an advocate for public-assistance reforms, broke out the benefits this way in the hypothetical scenario:

Benefits Available:

BadgerCare Plus                      $4,740

FoodShare Wisconsin              $3,285

WIC                                              $477

Wisconsin Shares                  $10,972

Section 8 Housing                    $4,188

Refundable Tax Credits           $4,485

Total                                        $28,147

“I don’t want to begrudge anybody who needs help … , Darling told Wisconsin Reporter. “But these should be temporary things from the government, not a way of life.

“How is that going to be an incentive for work?” she said, adding that a lot of middle-class families in Wisconsin are living on $40,000 a year without the aid of public assistance. “The wagon is getting bigger and bigger, and those pulling are getting weaker and weaker.”

Rob Reinhardt, program supervisor for the fiscal bureau, which provides research to the Legislature, said the bureau didn’t break down the numbers in the manner Darling did because “apples to oranges” comparisons are in play.

For instance, for individuals not in the managed care health insurance system, expenditures for medical services would vary depending on use.

Wage earners in this scenario would be making minimum wage, representing a relatively small portion of the working population.

Dennis Smith, secretary of the state Department of Health Services, told Wisconsin Reporter on Thursday that it is “quite common” that low-income families qualify for multiple programs.

DHS administers BadgerCare Plus, Wisconsin’s Medicaid health insurance program for the poor, elderly and disabled. It also operates the Wisconsin FoodShare, or food stamps, program.

According to the latest audit, 1,175,000 Wisconsin residents are covered under BadgerCare, and about 771,000 of the beneficiaries are not disabled or elderly.

While there’s a lot of churn in the system, the numbers have climbed in recent years due in large part to the recession, but also due to looser participation standards laid out during former Gov. Jim Doyle’s administration.

Smith said he did not have any numbers on how many recipients stay in the program long-term — three years or more — but he said he would try to get those numbers for Wisconsin Reporter.

Darling, picking up on a charge by GOP presidential candidate Mitt Romney,chided the Obama administration for eliminating the work requirement for benefits in the Temporary Assistance to Needy Families program, or TANF.

The charge has been broadly debunked by political fact checkers. PolitFact rated it “Pants on Fire,” the news feature’s lowest rating.

Romney and his supporters continued to hold firm on the assertion, while Democrats and the president’s people roundly criticized what they have called a “drastic distortion.”

Smith declined to comment on the squabble.

But he did say 47 states have voluntary work requirements for their food stamp programs. TANF beneficiaries in Wisconsin are required to seek employment.

Smith said the $4,740 estimated in the study’s BadgerCare Plus expenditure would be true for the vast majority of Medicaid recipients, who are in managed care. Even if beneficiaries aren’t using the medical care, the state is paying a capitation, or per-person, fee to cover them.

The broader value of Medicaid for instance is in its comparison, Smith said.

The state health insurance program is considerably less expensive for recipients, generally, than medical insurance and treatment costs for individuals covered under private insurance, Smith said.

“Even this (fiscal bureau study) understates the value of this benefit,” he said.

Darling, who survived a recall campaign a year ago, said she will continue to look for ways to crack down on fraud and abuse in taxpayer-funded public assistance programs.

“This report shows taxpayers already paying for very generous benefits. They shouldn’t have to pay for people who misuse the system too,” she said.

Contact M.D. Kittle @wisconsinreporter.com



  • Mary

    I work in a healthcare office and have seen people come in with their employer based insurance, their husbands employer based insurance and then Medicaid! Wrong, wrong, wrong.

  • one serious dude

    the dumber they are, the easier they are to payoff for their vote… and WHY are they that dumb? ’cause the money confiscated from the wealth creators is doled out to the unionized public school teachers who calim they teach the kids “how to think”, NOT what to think….LYIN’ all the way around, aren’t they?

  • Richard Rider

    Actually, it’s even worse. Most of the benefits are not taxable, while the earned income is subject to federal and state income taxes — PLUS social security deductions (7.65%), unemployment insurance, and the frequently some of the cost of health care.

    Also not mentioned are utility subsidies and free student meals at school.

    Another study indicated that, in Mississippi, a $14,500 minimum wage family getting all the legal benefits nets significantly MORE than the same family earning $60,000 in income.