On June 24, 2014, the National Review Online posted an article entitled ‘Welfare Abuse Almost Quelled’.  (http://www.nationalreview.com/article/381063/welfare-abuse-almost-quelled-jillian-kay-melchior) An intriguing title about a simple – and relatively inexpensive – solution Indiana implemented to address concerns that the State’s Temporary Assistance for Needy Family (TANF) cash assistance recipients were accessing and using their benefits in specific restricted locations.  Indiana was one of the first states to restrict where a TANF recipient could access benefits.  In 1997 Indiana enacted laws restricting TANF recipients from accessing their benefits through electronic benefit transfer (EBT) cards at bars/liquor stores, gun stores and casinos.  In 2012, in response to Congressional action, Indiana added adult-entertainment establishments to the list of prohibited locations.

In order to generate buzz the article’s approach implies that Indiana tackled a major fraud problem, but a key piece omitted in the story is how few TANF recipients ever accessed benefits in a restricted location.  In my prior role as Indiana’s TANF Policy Manager, I and my team reviewed all TANF EBT transactions from January 2011 through December 2011.  Scouring 50,000 to 80,000 transactions per month, this review found that less than 0.2% of all TANF transactions occurred in prohibited locations.   Only one transaction for the whole of CY 2011 occurred in a casino. Health and Human service organizations are constantly challenged to ensure the benefits and services are delivered accurately and even one bad apple generates a lot of unwanted attention so fraud avoidance must be an ongoing effort. The balance comes in doing this within a cost effective framework, which is how Indiana developed its approach.

The data match outlined in the article was part of a broader strategy of education and outreach implemented in 2012.  As stated earlier, the number of improper transactions was small, so instead of developing a complex system to ‘block’ transactions, it was decided that a more pragmatic solution would be to make minor changes. In an effort to provide the required control and generate the necessary impact the changes included: educating clients, reaching out to restricted business locations, creating a simple data match identifying improper transactions and notifying clients when an inappropriate transaction has occurred.

To achieve this in September 2012, Indiana sent one time notices to all TANF EBT cardholders, updated the ‘buckslip’ – the letter that explains to clients how to use their EBT card – attached to new EBT cards, and modified TANF approval notices to include information about the restrictions.  Concurrently, Indiana’s Alcohol and Tobacco Commission (ATC), which issues all liquor and non-casino gambling licenses, notified all liquor licensees on the restrictions and provided a sample notice that business owners could print and post.  Additionally, by providing reinforcement on the ability for ATC to take actions if the business fails to post the notice, the notice also provided the impetus to spur liquor licensees to take action.   The results of these simple, low tech steps was a significant drop in the percentage of inappropriate transactions from 0.2% to 0.12% in December 2012 and 0.08% in January 2013.  Indiana implemented its data matching system and client notification process in January 2013. From the numbers stated in the National Review Online article, the program continues to be successful.


“Everything should be made as simple as possible, but not simpler.” Einstein