Kansas welfare recipients can still withdraw more than $25 from ATMs – for now

Kansas Gov. Sam Brownback signed into law the state’s one-of-a-kind ATM limit for welfare recipients in April.
Kansas Gov. Sam Brownback signed into law the state’s one-of-a-kind ATM limit for welfare recipients in April. AP

Kansas will not enforce a $25 limit on welfare recipients’ ATM withdrawals on July 1, the date the state’s tough new restrictions on cash assistance were supposed to take effect.

The Kansas Department for Children and Families said in a statement on Monday that it’s awaiting feedback from the federal government to ensure any ATM limit it might impose doesn’t violate federal statutes.

“We have been in discussions with our federal partners about this provision of the law, but we have not received specific guidance about the daily ATM withdrawal limit at this time,” said Phyllis Gilmore, department secretary.

The agency also is working to overcome technical difficulties with the contractor that provides the Kansas Benefits Card, the debit card Kansans use to withdraw benefits. That vendor, FIS, likely won’t be able to enforce the ATM limit or another provision that bars point-of-sale withdrawals from out of state for at least six to 12 months.

The state’s one-of-a-kind ATM limit was added as an amendment to a welfare overhaul bill signed in April by Kansas’ Republican Gov. Sam Brownback. McClatchy reported in May that the limit might violate the Social Security Act, which requires states to ensure that recipients of Temporary Assistance for Needy Families, or TANF, “have adequate access to their cash assistance” and can withdraw money “with minimal fees or charges.”

Kansas receives about $102 million in TANF block grant funds every year from the federal government. That money could be in jeopardy if the U.S. Department of Health and Human Services determines that ATM limit doesn’t meet the requirements of federal law.

Concerned about the risk to federal funds, Brownback signed a “fix-it” bill last week that modified the welfare law by allowing Gilmore to raise or eliminate the $25 limit to ensure compliance with federal law.

As of last week, a spokesman for HHS’s Administration for Children and Families said the agency had yet to receive any changes in Kansas’ welfare plan from the state for review, said a spokesman for the agency, Kenneth Wolfe, in an email.

Wolfe said HHS “will work with the state to resolve any issues that require clarification.”

In addition to setting a cash limit on ATM withdrawals, Kansas’ new welfare law also imposed stricter eligibility requirements and prohibited welfare recipients from spending their benefit money at certain places, including movie theaters, massage parlors, cruise ships and swimming pools.

The law also reduced the amount of time recipients could remain on welfare from 48 months to 36 months. That policy will be implemented in stages, starting on July 1, when new applications for benefits from households that have already spent 36 months on welfare will be denied, the Kansas Department for Children and Families said in its statement on Monday.

Households that had received extensions before July 1 or will hit the limit by January 1, 2016, will be given a six-month grace period, the agency said.

People can apply for hardship extensions to receive another year of eligibility.

“We know that the average client on TANF uses 18 months of eligibility, so we are confident that through our services, we can help individuals obtain self-sufficiency before they ever come close to the limit,” Gilmore said.