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| Thread: Abuse of Government Aid | |
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Elodin
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Free Thinker
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posted May 19, 2011 12:02 AM |
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Abuse of Government Aid
Clicky
Quote:
A Michigan man who won $2 million in a state lottery game continues to collect food stamps 11 months after striking it rich.
And there's nothing the state can do about it, at least for now.
Leroy Fick, 59, of Auburn won $2 million in the state lottery TV show "Make Me Rich!" last June. But the state's Department of Human Services determined he was still eligible for food stamps, Fick's attorney, John Wilson of Midland, said Tuesday.
Eligibility for food stamps is based on gross income and follows federal guidelines; lottery winnings are considered liquid assets and don't count as income. As long as Fick's gross income stays below the eligibility requirement for food stamps, he can receive them, even if he has a million dollars in the bank.
Food stamps are paid for through tax dollars and are meant to help support low-income families.
"If you're going to try to make me feel bad, you're not going to do it," Fick told WNEM-TV in Saginaw on Monday.
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shyranis
Promising
Supreme Hero
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posted May 19, 2011 01:07 AM |
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Obvious form of abuse, sounds like reform is needed. If he had say, a few thousand in the bank and a ton of debt like most other people sure, as long as he could prove he's seeking employment he should qualify.
Wow.
My husband was on unemployment for a year, and he had to send monthly reports proving he was searching with business names, contact info, times contacted. You don't get an easy ride like that here. (Well, some people do, but they get punished when eventually caught)
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JollyJoker
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posted May 19, 2011 06:44 AM |
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In the US, does the guy have to pay taxes for his lottery winning?
There's a related discussion in Germany.
Say you own a house - bought and paid when you are working hard and so on. Now you are unemployed.
Do you get unemployment help from the government or will you have to sell your home?
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Corribus
Hero of Order
The Abyss Staring Back at You
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posted May 19, 2011 03:36 PM |
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Quote:
In the US, does the guy have to pay taxes for his lottery winning?
Yes - it's considered income.
If you invest the money (most people don't - most people blow it) you also have to pay taxes on earnings, like any other investment.
tbh I'm not sure about the unemployment question. My suspicion is that unemployment qualification would be determined by whether you are employed and what your earnings are, not on your net assets. (I.e., you can own a house and collect unemployment.) Likewise, you can collect food stamps even if you are a billionaire IF your earnings are sufficiently low. I.e., if I am a billionaire with no income and bury it in the backyard, I can collect food stamps. However if I am a bilionaire with no job and have my money invested in a bank, my income would be determined by my interest earned, which on $1 billion would probably be above the threshold for food stamps.
I heard this story on the radio. As I understand it, this guy is doing nothing illegal. He's taking advantage of a aystem which has loopholes. Loopholes which will probably never be fixed because no policitians like to tinker with entitlement programs.
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angelito
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posted May 19, 2011 03:50 PM |
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If this guy has to pay taxes for his $2 million lottery win, that would mean everbody would have to pay taxes for ANY kind of lottery win, even if it is only 5 $.
And exactly that is the reason wyh lottery wins are tax free in germany.
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del_diablo
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Manifest
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posted May 19, 2011 04:04 PM |
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I guess it is not abuse, but rather "questionable position regarding money".
The problem is that the procedures of social security is apparently extremely uncertain, i guess. Otherwise one would just point fingers to the guidelines, and everyone would shut up.
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Corribus
Hero of Order
The Abyss Staring Back at You
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posted May 19, 2011 04:13 PM |
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Quote:
If this guy has to pay taxes for his $2 million lottery win, that would mean everbody would have to pay taxes for ANY kind of lottery win, even if it is only 5 $.
Yes, that's true in principle. In practice most people don't report every little nickel and dime of taxable income on their year-end tax declarations. The IRS can't possibly audit everyone, after all. For instance, you're also supposed to report and pay sales tax for everything you purchase on the internet. And for every bank account that earns interest, even if the interest is only a few cents.
Obvoiusly, if you're winning millions of dollars, you're much more likely to be audited by the IRS at the end of the year, so you better report it.  [Actually - and I could be wrong, having never played or won the lottery - but I believe lottery checks are handled like paychecks. That is, the money is taken out for taxes even before you're issued your check, so you don't really have a choice as to whether you pay it or not.]
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bLiZzArdbOY
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Nerf Herder
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posted May 19, 2011 04:24 PM |
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There's a take-and-give to closing such alleged loopholes in food stamps and other assistance programs. Checking for all the potential sources of a person's assets is a pain in the ass and involves more administrative work than checking for income and monthly bills, and even for those it's not like it's impossible to cheat the system. It's considered much more cost effective to simply allow those loopholes to exist and have the occasional exploiter than to try to create an impervious system. It's not like there's thousands upon thousands of millionaires lining up to get food stamps and then evilly laughing as they use it to buy fresh produce that they immediately dump in the river.
I suppose there may be some ways to fine tune it, but overall I don't think this is as bad as some would think. With every mass program like this, exploitation - as well as the cost of trying to reduce it - is taken into consideration.
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shyranis
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posted May 20, 2011 03:00 PM |
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Edited by shyranis at 15:04, 20 May 2011.
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In many places Lottery winnings are not taxed because said taxes on it are already payed by the tons of people who bought it and lost. (They're usually government run)
Of course, even with that missing tax revenue, the provinces/states as well as the federal government all get nice large profits to use towards their budgets.
Edit:
But despite that, this man should be removed from the system. It's not like he was a person at a fairly well paying and successful job that had depleted his savings trying to get by after a layoff and he had non-liquid assets to take into account. That money is 100% liquid. He could live the rest of his life easily on that income. Heck, he could move to southeast asia and live like a king (provided he doesn't wave his money around stupidly and get killed for it).
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JollyJoker
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posted May 20, 2011 03:19 PM |
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Yeah, I agree with blizzard - take every system you want, closing ALL the holes costs more money than it gains.
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del_diablo
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posted May 20, 2011 04:27 PM |
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Quote:
But despite that, this man should be removed from the system. It's not like he was a person at a fairly well paying and successful job that had depleted his savings trying to get by after a layoff and he had non-liquid assets to take into account. That money is 100% liquid. He could live the rest of his life easily on that income. Heck, he could move to southeast asia and live like a king (provided he doesn't wave his money around stupidly and get killed for it).
1% of 2 million is 20.000
What was the insert rate again?
And does $20.000*insert rate compare to the cost of living?
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