Kansas Gov. Sam Brownback isn’t very popular with low income voters. He’s set to continue that unpopularity due to a stealthy new tax on the poor. Legislators in the state have decided they will now place a $25 daily limit on ATM withdrawals on state-issued benefits cards.
This comes in addition to reducing the overall benefits themselves.
The daily cap of $25 on cash withdrawals will begin July 1st. The effect is that it will force beneficiaries to make more trips to the ATM to withdraw money from the debit cards used to pay public assistance benefits.
But because there is a fee for every withdrawal, the limit means that families will get substantially less money.
It’s difficult to overstate the significance of this action.
Most households in the program lack enough money to maintain a minimum balance in a conventional checking account so they will pay their rent and their utility bills in cash.
A single mother with two children who needs to withdraw $200 in cash would incur $30 or more in fees, which is almost ten percent of the roughly $400 the family would receive under assistance programs in Kansas.
But it gets far worse.
Banking machines are only stocked with $20 bills so the $25 limit is effectively a $20 limit.
A family withdrawing $200 in cash would have to visit an ATM 10 times a month, which is both a financial burden and also a time burden for a parent who might not have a car and might not live in a neighborhood where ATMs are easy to find.
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