My wife came across this story on Yahoo a while back about a woman who won $1 million in the lottery, yet still collects food stamps!
I’m used to reading about people who win the lottery, and then throw their riches away on useless items or things which don’t hold value. You even hear stories of people giving all of their money away and failing to save any of it, and ending up in the poorhouse.
However, I must say that this is a new one for me! Michigan resident, Amanda Clayton decided to continue collecting food stamps even after she won a $1 million lottery prize (see full video below)!
Many people are outraged because they feel as though Clayton is robbing taxpayers of their hard-earned money! What makes this even worse is the fact that 25% of Michigan residents are currently collecting food stamps.
Here is how she responded when a reporter asked her if she thought it was the right thing to do for her to continue to collect public assistance:
“I thought that they would cut me off, but since they didn’t, I thought maybe it was OK because I’m not working…”
“I feel that it’s OK because I mean, I have no income and I have bills to pay,” she said. “I have two houses.”
According to the reporter in the video, she purchased her new home and car with cash. I assume that she is selling her old home (which can take forever in Michigan), so she will soon be without any debt at all. This means that she will have a new house, a new car, and no debt…she’s probably better off than half of the residents of that state!
However, she is not the first million dollar lottery winner to continue to collect food stamps. According to ABC News, Leroy Fick won a $2 million lottery prize about 2 years ago…also from the state of Michigan! The 59-year old took home $850k after taxes, and purchased a new home and an Audi convertible.
Despite his winnings, he still used his Bridge Card for groceries. The difference in this case is that Fick actually called Michigan’s Department of Human Services to tell them that he won the lottery, and they said that he can continue using public assistance. Here is what his attorney, John Wilson had to say…
“He’s not trying to cheat the state,…based on his income, he’s eligible.”
He specifically called the Department of Human Services and said, ‘Can I still use the Bridge Card?’ and they said, ‘Yes,’ because he is eligible,” said attorney Wilson. “He’s done everything right in the eyes of the law.”
“He lives a simple life,” Wilson said. “He doesn’t even have the Internet.”
The eligibility requirements posted on the Michigan Department of Human Services website, lists the following sources of income as examples of what is counted when determining eligibility: Wages, self-employment earnings, rental income, child support, Social Security benefits, and veterans benefits. Lottery benefits, gifts, or other “windfalls” are not listed.
The fact that lottery winnings are not explicitly mentioned in the list of eligibility requirements leads to a huge debate about this subject. Do these people who can obviously afford to buy food on their own now, have an obligation to refuse food stamps?
Arguments For Them Being Justified In Their Actions
If you look at the comments sections in the various articles that covered these stories, you will see a few ideas being repeated constantly, justifying the actions of these lottery-winning, welfare recipients:
- They both paid at least 50% of their “winnings” in taxes (a portion of that to the state of Michigan), and so they should be entitled to collect $200/month or less.
- The small amounts that they are receiving pale in comparison to what the government wastes each month, so the real outrage should be with our elected officials first.
- They exploited a loophole in the system, so this is really the state’s fault. In fact, these 2 should be rewarded for sparking a change in government policy.
Arguments For Them Being Wrong
- They are stealing from the system since they do not need public assistance.
- There are taxpayers who are struggling to make ends meet, that now have to support a couple of millionaire lottery winners!
- Just because there was a loophole and therefore no legal issue, their actions are still immoral and are ultimately hurting Michigan.
What Do You Think?
- Were they right for continuing to accept public assistance after winning the lottery?
- Should we even care about this? If they turn down the benefits, it won’t reduce the taxes of anyone in Michigan…so who cares, right?
- Should they be required to pay back all of the money they used on their Bridge Card after receiving their “winnings”?
- What would you do if you were in this position?
Recession Proof Your Business By Cutting Your Costs
What a story! This is unethical, but she actually isn’t breaking the law. There are two types of people out there. Ones who follow rules and ones that break them. This one is tricky as it is more of a moral rule.
Unfortunately many people will do whatever they can get away with. And we don’t have enough civil service employees to keep up with it all. Or else they don’t care. It’s all symptomatic of a culture of corruption, I’m afraid.
We hear that just 27% of Americans have any savings. Should we be surprised about that?
There should be an assets test! If you own assets above a certain level, you should not be able to collect state programs (food stamps). I thought there was a threshold that would disqualify you. I hope Michigan’s legislators correct this flaw.
If I was in her position I couldn’t help but feel as if I was stealing off the tax payer with that amount of cash in the bank, still claiming food stamps. However you cant really blame her, it’s the governments issue to sort out.
Gee, and I thought I was cheap!
Not okay. Unethical. Dumb excuses. Even if the net ends up being half a mil, she could put it in mutual funds and be good probably for the rest of her life, esp. if she eventually finds a part-time job.
Wow.. the audacity of some people. This is downright shameful – IMHO. And the rationalization that they paid at least 50% of their “winnings” in taxes. Well guess what – so do I.
We don’t have ‘food stamps’ in Australia, our welfare is set up differently. Personally I could not continue to collect something like that after winning the lottery. (In Australia you would instantly lose your benefits if you had that much in cash or assets anyway.)
Dependence on these sort of programs is huge though. Many people once on government assistance have no desire to get off it, as they see it as ‘free money’ and some people sabotage themselves, without realizing it so they keep their benefits.
Yes, it could be stealing from those who really needed the food stabs but still, it’s not her fault. It’s a government task to detect or investigate this kind of situation.
1) I don’t think I would personally do it but if they’re following the law then technically they are right.
2) I think that the state should address the loophole and fix the problems with it. If they do turn it down the money may be able to be used for another purpose that is currently underfunded
3) No, they got it legally and the program definitions allow them to continue so I don’t feel they should
4) I wouldn’t take the money but to each their own. If it is legal then they have the right to do so.
Something is just a little crazy about this story. But, welfare dependence is a huge problem and it doesn’t stop folks from working ‘under the table’ while on welfare to buy their gadgets, fancy clothes and yes, Lottery tickets! Sad, yet I hope she’s able to develop better financial habits, now that she’s been given this ‘break’ so to speak.
You ought not to be allowed to gamble playing the lottery if you are on public assistance period. That money should be spent on food. Thus any lottery winnings should belong to the state to repay such frivolous expenses.
After these stories became public, it would take a simple act of the state government to include assets as part of the criteria to collect.
There are people that have no concept of how to handle money. I see the (net) $600K or so, and think “this is $24,000 annual income, as a withdrawal each year.” Somehow, this woman with no income, and already on the public dole, thinks it wise to buy a second house with cash? The car might be understood, I don’t know what she bought, but a new house? Give me a break. Give me that million, and I promise you, my spending would not change one bit. The retirement date might get pulled in, but that’s it.