Faulty sanctions plague city welfare recipients

Jon Pepper, a homeless Army veteran, relies on a few hundred dollars a month in public assistance to survive.

Pepper, 45, joined New York City’s welfare rolls in 2010 and over the past few years the city has tried to reduce his benefits dozens of times for missing required meetings or failing to provide requested documentation.

Each time, he appealed the penalty and, each time, he won.

“I’ve been sanctioned from my public assistance right and left for the most ridiculous reasons,” he said.

Pepper’s experience is far from unique among the city’s approximately 300,000 welfare recipients.

The city routinely sanctions poor New Yorkers receiving cash assistance, but those penalties are often reversed when recipients appeal. In many cases, the city department that administers public assistance programs, the Human Resources Administration (HRA), doesn’t even attempt to defend the sanction.

About 20 percent of all households receiving cash assistance are in sanction status, meaning they are in risk of being penalized or are already being penalized with reduced benefits for alleged infractions. When recipients appealed the penalty during the 2012 fiscal year, the city lost more than 80 percent of the time.

Once imposed, a sanction results in a reduction in benefits until the recipient complies with HRA requirements.

The average sanction lasts a little more than 4 months and results in the loss of more than $1,000 in benefits, according to HRA statistics. And 10 percent of sanctioned recipients apply for entry to the city’s homeless shelter system.

The agency’s new commissioner, Steven Banks, formerly head of the Legal Aid Society, spent years signing off on litigation against the very agency he now runs. He acknowledges that improper sanctions and the resulting lost appeals are a problem.

In a City Council budget hearing in May, Banks announced several reforms, including some that attempt to address problematic sanctions. One will allow up to five excused absences from required work programs before sanctions are imposed. He also announced the implementation of text and cellphone alerts to remind clients of upcoming appointments.

In an interview with New York World, Banks said the agency is working on a way to settle thousands of backlogged appeals that “we know we are going to lose,” though discussions to settle the appeals are still in the early stages.

Many of Pepper’s erroneous sanctions stem from his inability to provide the agency with a copy of his birth certificate and Social Security card.


Jon Pepper. Photo: Maya Srikrishnan

He receives $246 in cash assistance and $200 in food stamps a month. He says there’s no money left to pay the replacement fees for his birth certificate.

“I don’t even have enough extra money to get my driver’s license to be a cabbie,” Pepper said. He also receives a pension from his Army service, but he says that money is used solely to make child support payments for his five children.

When sanctioned recipients such as Pepper appeal, the case is heard by an administrative law judge in what’s called a fair hearing.

According to documents filed in one of Pepper’s appeals, he tried to use his voter identification and electronic benefits card for his food stamps as identification, but the agency wouldn’t accept them. He then applied for a replacement birth certificate through HRA to avoid the fees, but agency personnel told him they never received the certificate.

In overturning the agency’s decision to close his case for the paperwork issue, the judge wrote that he felt Pepper tried to cooperate with HRA and was “sincere and forthright in his testimony.”

The judge added that “the Agency should note that, in accordance with its own ‘Suggested Documentation Guide’, a ‘Photo I.D.’ is sufficient to establish identity as an eligibility factor,” revealing that the agency did not actually need his Social Security card or his birth certificate.

Pepper, who moved to New York from Atlanta to help care for an ailing cousin and to look for work, has kept his benefits intact by appealing sanctions within 10 days of the notification. Recipients who appeal later or not at all lose a portion of their cash assistance. Only a small percentage of sanctioned recipients ever file an appeal.

A 2012 report by the Federation of Protestant Welfare Agencies, a social services advocacy group, cites several other examples of HRA sanctions being overturned in fair hearing decisions.

In one, the agency had previously determined a recipient was exempt from work requirements because she needed to stay home and care for her son who had cerebral palsy. It then sanctioned her for failing to attend a job training appointment.

In another, HRA sanctioned a client who had previously notified a caseworker that he or she could not attend their meeting due to a lack of childcare.

Sienna Fontaine, a lawyer with Legal Services of New York City in the Bronx, said accompanying clients to HRA centers can often be a “depressing scene as clients are often waiting for hours on end to be helped and are often treated pretty badly by staff.”

“They assume that clients should’ve made all these extra steps, including missing school or work, to go to these appointments,” Fontaine said. “It assumes that they’re not telling the truth, or hiding resources, or that they’re lazy.”

And the financial cost for the city’s high percentage of overturned sanctions attracted even the governor’s attention. This year’s state budget included a measure requested by Gov. Andrew Cuomo’s office that forces New York City, and only New York City, to pay the cost of the fair hearings it conducts and doesn’t win.

Until 2010, costs for all fair hearings were shared between all counties and the state. The state fronted the cost of the hearings, and then billed local governments for a portion of the cost. In fiscal years 2009 and 2010, New York City paid approximately $13.3 million of the roughly $15 million paid by all counties statewide.

The cost sharing program ended in 2010, but in response to the escalating costs, Cuomo proposed the measure that will charge only the city for fair hearings that it loses. The charges may total as much as $10 million during the fiscal year.

Banks pointed to the measure during an appearance at the American Bar Association in May, arguing that serious reforms should be implemented, at least in part, to avoid the “financial penalties” from “unnecessary hearings.”


HRA Commissioner Steven Banks

Robert Doar, who oversaw the HRA as commissioner for the last seven years of the Bloomberg administration, said the cost isn’t the city’s fault.

“To make the city carry the brunt for the wastefulness of the fair hearing process is unfair because it’s built to be wasteful by the state,” said Doar, now a poverty studies fellow at the American Enterprise Institute.

Of the 110,480 fair hearings requested statewide between July 2012 and June 2013, nearly all—100,731—were requested in the city, according to a state legislative report.

The source of some of the erroneous sanctions stems from faulty computer software and systems put in place years ago in an effort to improve efficiency at the HRA.

For example, the agency’s computer system has an “auto-posting” function that by default assumes clients aren’t adhering to their work requirements and scheduled appointments.

Once the time for a client’s appointment has passed, the computer will automatically generate a “failure to report” code, unless a caseworker affirmatively records the recipient’s attendance.

Thus, clients can be hit with a sanction despite having attended an appointment or having provided an excuse for their absence to their caseworker because the worker fails to record the attendance or excuse in the computer.

New York City is the only jurisdiction in the state that uses such a system.

Former commissioner Doar defended the practice.“It’s not some cold-hearted government bureaucrat trying to make welfare recipients’ lives miserable,” he said. “We’re trying to make things as efficient as possible.”

An HRA spokesperson said that Banks has ordered a complete review of the auto-posting system and aims to reform agency practices to avert the state’s new fair hearing-related financial penalties.

Auto-posting is not the only system that can cause errors.

In January 2013, HRA switched to a new version of its “address cleansing software.” Months later, the agency discovered that this update dropped apartment numbers from thousands of recipient addresses.

The computer glitch affected around 60,000 notices dealing with mandatory work requirement appointments and roughly 20,000 letters notifying clients to come in to re-certify their benefits. An HRA spokesperson said the agency took “corrective actions” upon realizing the mistake.

One of Fontaine’s clients, Carol Puerto, 30, saw her benefits cut after a series of notices from HRA were improperly addressed.

A single mother, Puerto was taking medical billing classes, interning at a Manhattan doctor’s office and doing part-time administrative work at one of the city’s Medicaid offices. She was doing everything her caseworker said she needed to in order to keep receiving the public assistance checks that helped support her two children, who were 4 and 7 at the time.

Then, in February 2011, without explanation, Puerto’s monthly benefits were slashed by a third, from $753 to $502—a huge blow to her budget.

The agency had apparently sent three notices to Puerto’s Bronx address during the previous six weeks. The first notified her of a mandatory work appointment. The second demanded that she come to an agency job center and explain why she’d missed the appointment. And the third informed her that she was being sanctioned and that her benefits would be reduced because she “willfully and without a good reason failed” to show up for the appointment.

But Puerto said she never received any of the letters. Unlike dozens of other letters the agency had sent since she began receiving public assistance in 2007, these notices failed to include her apartment number in the address.

At an October 2011 fair hearing, an administrative law judge ruled against her, upholding the sanction, even though a copy of the meeting notice with the incomplete address was included in Puerto’s file.

She appealed the decision to the New York State Supreme Court in Manhattan, with the help of Fontaine and other lawyers at the Legal Services of NYC-Bronx.

In April 2013, Puerto won.

Justice Lucy Billings, wrote in her decision that the agency couldn’t punish Puerto for missing “a pointless mandatory appointment or even a purposeful mandatory appointment” when she was “complying with her assigned and approved work activity.”

Billings also touched on policies that led to Puerto’s initial sanction, such as auto-posting, which she said “triggers adverse action” against clients “without the required review of the case record to assure that the action is in fact correct.”

This, she said, is in violation of New York State social services law.

HRA’s policies have turned even a former administrative law judge, Edwin Pearson, into a vocal advocate for change.


Edwin Pearson. Photo: Maya Srikrishnan

Pearson, who presided over fair hearing cases in the city for more than 15 years, said that HRA treats most welfare recipients as if they were “liars, cheaters and trying to get everything out of the system.”

“But it’s not true of most of the people,” he said. [read more about Pearson here]

Pearson, now retired, spent the last several years trying to make his superiors aware of the system’s problems. Starting in 2006, he wrote countless memos to the governor and state officials in Albany detailing what he saw, day in and day out, in fair hearings.

Pearson said he received polite responses to his memos but nothing more.

He said HRA continually failed to even prepare evidence packets to defend its sanction decisions in fair hearings. He said he took that as an admission that the sanction was incorrect in the first place. This lack of preparation is called a “withdrawal,” and if the client shows up at the hearing, the sanction will be automatically lifted.

While Banks has already announced his intention to implement sweeping reforms to ensure that “everyone in need of assistance gets it,” he acknowledges turning that goal into reality will be difficult.

“HRA is an agency that is highly regulated by state and federal rules and statutes, and all the while people need their benefits continuously,” he said. “It’s like changing the tires as the car moves very quickly.”


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