Welfare Clients Already Work,
By Barbara Vobejda and Judith Havemann
|See the accompanying graphic, Living on Welfare.|
But as the federal welfare law enacted a year ago takes effect and caseworkers delve more deeply into the lives of their clients, they are finding an unsettling truth: Welfare fraud is virtually universal.
Supported by new research, state officials say that instead of the old image of welfare mothers sitting at home, unable or unwilling to work, they now see that many are already working — they're just not telling their caseworkers, for fear their welfare benefits will be cut.
The extra money these recipients make from styling hair, minding children or waiting tables may be relatively small, but it is nevertheless illegal.
"I don't think of it as petty. Fraud is fraud," said Claire McIntire, welfare commissioner in Massachusetts, where The Washington Post is chronicling the impact of welfare reform through a series of occasional articles.
And ultimately, welfare workers say, it may be more troublesome than the proverbial "welfare queen" with her expensive home and gleaming Cadillac.
That's because the far more common practice of bringing in extra money on the side acts as a counter-incentive to welfare reform, hampering efforts to push recipients into official jobs. Until their welfare checks are cut off completely, caseworkers fear, many recipients simply will continue to combine their monthly benefits with under-the-table income.
Welfare experts say that should be no surprise. With benefits set at levels that keep a family below the poverty line, virtually all welfare mothers have found ways to bring in extra money, according to recent research that explores the phenomenon in unprecedented detail. And as history would predict, savvy recipients already have devised new strategies for getting around the changing requirements of welfare, investigators say.
McIntire and her counterparts in other states argue that welfare reform has had some positive effect on rooting out fraud. The most serious abusers — those recipients with substantial outside income from jobs or family — have left the rolls completely. In effect, they were "smoked out" by new regulations requiring recipients to spend 20 hours a week in a job or performing community service. Knowing they didn't have enough time to keep working secretly and find another job they could report to their caseworkers, they simply left the rolls. State officials say that explains as much as 20 percent of the shrinking welfare caseload — -down 138,000 in Massachusetts and 3.6 million nationwide since 1993.
But those still on public assistance are much more worrisome.
"There are an awful lot who are ... just sitting there waiting," not taking advantage of training or other help to become self-sufficient, McIntire said. And the fact that many of those families are collecting benefits as well as unreported income makes it even harder to move them into the full-time, permanent work force, where they would have to live on their wages alone.
Officially, just 8 percent of Massachusetts welfare recipients tell the state they collect any outside income. Anonymously, 28 percent told researchers conducting a domestic violence study that they receive assistance beyond their welfare checks.
In the first national study of the issue released this year, researchers Kathryn Edin and Laura Lein report that virtually 100 percent of welfare recipients are bringing in extra funds, money they rarely report to caseworkers.
Some researchers see the research by Edin and Lein as good news, proof that welfare mothers have marketable skills and, when forced, can support themselves.
"People will be better off, on balance," said Lawrence Mead, a New York University political scientist who predicts that recipients will end up with more income when they are forced to work.
But if the good news is that welfare mothers are already working, it also may be the bad news: If they are willing and able to work, why are they still so poor?
"They're not going to be able to get a much better job than their covert job," Edin said. "But meanwhile, they lose their welfare check. ... How much more enterprising can they get?"
Until recently, Marcia Missouri paid $475 a month in rent. Her monthly welfare check was $486.
She said she tried to pay her rent first, then feed herself and her 11-year-old son on the $180 she received in food stamps each month. That meant she had $11 left over to buy shoes for her son, pay the electric bill, cover bus fare and parcel out quarters for the laundry. Extras like pizza, even a mid-week trip to the corner store, weren't in the budget.
It didn't take long before she fell behind in her rent. "I had a nice landlord who would let me pay late," said Missouri, who is 27.
Eventually, when she was hospitalized for minor surgery, she became eligible for public housing "and that saved my life," she said. But when her housing costs dropped, so did her food stamp allotment, to $30 a month.
For a period when Missouri was married, her husband worked as a day laborer, but they didn't report the wages to the welfare office. "They found out," she said. "They said I owed $400 in food stamps." She paid it back in installments, $10 a month.
Since her husband left last year, she has been getting by on welfare and extra income from baby-sitting her nephew, money she reports to the welfare office. She also takes an occasional side job, which she doesn't report.
"I go to my sister if I have no food," said Missouri. "I go to Wanda," she said, nodding at her friend.
Now she lives in a vast expanse of public housing, 936 units on an isolated spot at the corner of the city. The welfare mothers who live here, several of whom gathered at the request of The Washington Post and agreed to speak with reporters about the income they receive, are well aware of the welfare reforms that Massachusetts is imposing.
Since last year, women with children age 6 and older must find a job or perform community service in exchange for their benefits. The state also has instituted a two-year limit on benefits that will expire for thousands of recipients at the end of next year.
Those changes have prompted some recipients to take advantage of a healthy economy and find work, knowing they must eventually live without welfare. But for Missouri, Murrell and many others, the changes haven't caused such a reaction. They are convinced they will have even less money when they are off the rolls, in part because now they can combine their benefits with what they earn on the side.
They can tick off a list of restaurants, cleaning firms, small stores and cab companies that will hire them off the books. And they can recite the tolerance of every creditor for late payments, in hierarchal order of which should be paid first. The banks, phone company and cable TV service show little mercy. The housing authority is easier to bamboozle.
Missouri's neighbor, Ursell Thompson, recently tested that theory.
Like many others in the Great Brook Valley housing project, when money gets tight, Thompson does something that residents in private apartments would have a much harder time getting away with: She doesn't pay her rent. She knows she can't be evicted before she's given the chance to pay up. And she knows she can go to the welfare office once a year and come away with an emergency grant that will pay the back rent.
It's a carefully choreographed dance, and the timing must be perfect. But this year, Thompson's timing was a bit off.
By September, she was nearly $300 behind and her phone and cable TV service were scheduled to be disconnected. Still, she ignored the bills until one morning a few weeks ago, when she woke up with a hunch that she had better pay her rent that day.
She was $5 short in her bank account, but wrote a check anyway and headed to the housing office. On the way, she ran into a friend, borrowed $5 and went to the bank to deposit it, covering the check.
When Thompson arrived home, she saw that her well-honed instincts had been right. Waiting in her mailbox was a final eviction notice that she could now ignore.
A day later, she was still elated. With a $5 bill and a couple of hours to spare, she'd kept her family off the street and her world intact.
The Caseworkers' View
At the welfare office in downtown Worcester, caseworkers spend their days in small partitioned cubicles, quizzing poor families on the details of their lives. That has made them somewhat cynical, said Richard Williamson and other caseworkers who point to glaring evidence that recipients aren't telling the whole truth.
Although they know welfare families must live on very little, the workers still hate cheating. It's a matter of fairness, and it distorts the basic incentives of the system. After all, if you can work under the table and collect a check, they argue, why take a full-time job until absolutely forced?
"Welfare is set up so the lowest of the working [poor] are supposed to be doing better than people on welfare," said Williamson, a caseworker for 19 years. But if hard-working people who get by on their wages see that the welfare family next door is better off, he said, "it destroys the whole system."
Welfare reformers have often boasted that the changing rules would create a new, more cooperative relationship between caseworkers and recipients, ending the workers' role as bureaucratic check-writers and replacing it with one of job counselor.
But in Worcester there is little to suggest that the new rules are bringing harmony.
In fact, said Williamson, "because we're taking a lot of negative actions, it's leading to more hostility and distrust." As caseworkers dock benefits or cut off families when they cheat or refuse to cooperate, "they think we're trying to put the screws to them."
The workers use a code for those they suspect of fraud: SLAM, for "Suspected of living above their means."
That describes families like Missouri's, whose rent and utilities exceed their monthly checks. Caseworkers know other money must be coming in. It's basic mathematics.
They can also reel off plenty of other schemes they say they see daily.
"We see ... guys, they have grease under their nails and we'd ask him if he was working and he'd said no," said Dave Heller, who has been on the job for more than two decades. "You'd call and the kids would say, 'Oh, he's at work.'‚"
Or women wearing gold jewelry that, in Williamson's words, "could choke a cat."
Time after time, people claim they are unemployed, but are mysteriously unavailable for appointments until after 5 p.m., more evidence that they already have jobs,the caseworkers said.
Heller tells of a woman who said she didn't know where the father of her children was. But when Heller called the woman's house and asked for the father by name, he came to the phone, essentially proving that he was part of the household and that the woman had been lying.
When the workers suspect that recipients are ripping off the government, they refer the cases to the Bureau of Special Investigations. Yet for years, nothing would happen.
Two years ago, the bureau had a backlog of 58,000 cases, plus the task of investigating all the new tips pouring in every day.
Faced with gridlock, the bureau simply erased all the cases that had been pending from before 1992. Shortly thereafter, the chief of the unit quit, blasting his beleaguered subordinates in newspaper accounts as lazy "tax-fattened walruses" who were ignoring the remaining backlog of 19,000 cases.
When the state finally replaced him eight months later with Pamela D. Ring, the pace changed dramatically. Last May, investigators surrounded a $290,000 house north of Boston with a swimming pool in the back yard and several cars in the driveway. They arrested two women on charges that they had collected $170,000 in fraudulent welfare, food stamp and health care benefits while their husband and boyfriend were running thriving convenience stores in nearby towns.
Still, cases like this are rare. More common is the occasional job, and recently, a new species of fraud inspired by state welfare reforms. Ring says she is beginning to see fraud connected to the community service requirement and the availability of day care funds, as well as in efforts to receive Medicaid and disability payments and to get into public housing.
Her bureau is investigating complaints that recipients have managed to get employees at nonprofit agencies to sign forms falsely certifying that they have put in their community service hours. In one case, she said, a recipient simply changed the date on the same document week after week to make it appear as if she had fulfilled the community service requirement.
Ring is also looking into complaints about fraudulent claims for newly expanded day care subsidies, including centers that ask to be reimbursed for children they don't have in their care. Some families have done the same for children not living with them, even children living out of state. Ring said complaints of public housing fraud and cheating on the government's health insurance program have increased. And she fears that as the time limits near, some recipients may lie in an attempt to get disability or other governmental payments they don't deserve.
In the meantime, the yard work and baby-sitting and hair styling that brings extra money into welfare households is likely to continue. "We try to keep our focus on cases that are worth $1,000 or more," Ring said.
One Year and Counting
In just over a year, welfare benefits will run out for Missouri. Murrell is in the same situation, one year and counting.
Missouri is putting in her hours at community service and working on her high school equivalency degree. Murrell is taking business courses at a local college.
"I want to work," Murrell said. "I don't like to be home with bratty-assed kids." She has already scoped out the best employers in town, the ones that pay benefits and help with college training. But if necessary, she said, "I'll work in fast food for $5.25 an hour."
Thompson, who was raised on welfare and has brought up five children on the system, said she will do whatever it takes to get by.
As she looks out at the glass-strewn walkways slicing across the housing project, she fears that many residents will become desperate when welfare benefits end. Then, she predicts, the Christmas crafts and hair braiding will look mild compared with the new type of fraud.
"Prostitution is gonna go up to an all-time high," she said. The same with drug-selling and other criminal activity. And truth to tell, she said, "if all that stands between me and starving is a bag of crack, I'm selling it."
© Copyright 1997 The Washington Post Company