Kansas governor signs fix for potential ATM issue with welfare reform

Gov. Sam Brownback
Gov. Sam Brownback AP

TOPEKA Gov. Sam Brownback has signed a bill into law that ensures Kansas won’t lose $100 million in federal aid as it sets new restrictions for welfare recipients.

A separate part of the law increases a tax on health maintenance organizations in an effort to generate nearly $50 million more for state coffers.

The Legislature, with strong backing support from Brownback, approved welfare reforms in April, including a provision that limits to $25 a day the amount welfare beneficiaries could can withdraw from ATMs using their electronic benefits transfer cards.

Supporters said the restriction — the first of its kind in the nation — ensures that benefits money isn’t squandered. They said beneficiaries still can use their EBT cards as debit cards at grocery stores without the $25 restriction.

Opponents called the restriction mean-spirited and said beneficiaries would be gouged by ATM fees because they would be limited to withdrawing only $25 at a time.

State officials later became aware that the restriction could violate provisions in the Social Security Act that require that welfare beneficiaries “have adequate access to their cash assistance” and are able to withdraw money “with minimal fees or charges.”

The Brownback administration began seeking a fix to ensure that Kansas would not lose $102 million in federal aid it receives for the Temporary Assistance for Needy Families program.

H.B. 2258, which the governor signed Friday, doesn’t eliminate the restriction, which is set to take effect in July. Instead, it empowers the secretary of the Kansas Department for Children and Families to unilaterally raise or rescind an ATM withdrawal limit.

The change was paired with legislation that will increase a tax on health maintenance organizations from 1 percent to 3.31 percent on total premiums and subscription charges.

That legislation is part of the state’s solution for a $400 million budget hole and is estimated to bring in about $48 million in 2016.

To reach Bryan Lowry, call 785-296-3006 or send email to Follow him on Twitter: @BryanLowry3.