Welfare Reform Bill Becomes Law

Taxpayers will no longer be on the hook when people defraud the state’s W-2 program. Senate Bill 426 authored by Representative Dan Knodl (R-Germantown), State Senator Alberta Darling (R-River Hills), and Representative Scott Krug (R-Wisconsin Rapids) cracks down on fraud, penalizing first offenders. Representative Knodl says the legislation brings the W-2 program back to the principles that made it effective.

“The underlying premise of W-2—that honest individuals willing to work should be given a helping hand—was forgotten as fraud infected the system and criminals stole from taxpayers and the truly needy,” Knodl said. “For example, under the Doyle administration, Wisconsin law allowed an applicant for assistance to lie twice before they could be subject to sanction. As Governor Walker’s Taskforce on Waste, Fraud, and Abuse recently discovered, this type of program administration made a mockery of program integrity and cost taxpayers roughly $200 million annually. I believe Wisconsin deserves better.”

A glitch in state law prohibited the state from pursing intentional program violations until an individual had committed at least three violations. The lax law resulted in few prosecutions, creating an extreme incentive to cheat. Senate Bill 426 cuts off W2 payments for six months after the first intentional offense. A person could lose their benefits for a year on their second offense and permanently on the third.

Senate Bill 426 was passed by a bipartisan majority in the Assembly and Senate, and was signed into law by Governor Walker on April 2.