In the past four years, the New York Lottery has been collecting money from individuals who have won the lotto and were on welfare. It is known that several states in the US have a clawback program that allows them to deduct child support and unpaid taxes from gambling winners. However, New York is the only city that also deducts social welfare payments.
How the Welfare Clawback Program Works
According to the New York law, when you want to collect the lotto prize money, you have to visit a state lottery center.
Once there, you will have to supply them with your social security Number. They will then search through the social assistance program to find out if you have been receiving welfare for the past ten years. If your name happens to appear on the system, they will then automatically deduct the money you have received. The deduction will apply if the welfare you have received is not more than 50% of your lottery prize.
To date, the New York Lottery has been able to reclaim around $20 million since 2013 from about 30 000 lottery winners. The average amount that is deducted is $670. Every year the amount that the lottery institute claws back keeps rising. In 2014 $4.9 million was deducted and $5.7 million in 2016.
Challenges that the New York Lottery has
The public is now aware that the New York Lottery is deducting welfare from lotto winnings. To avoid this, some winners enlist the help from others who are not on welfare to claim the money on their behalf and then share the money.
However, the authorities are aware of this and have managed to find some of the individuals who were involved in such schemes. They were able to find people who had claimed from 777 lottery tickets and had received social assistance.