New York State can seize up to half of jackpots of lottery winners on public assistance

FORDHAM, THE BRONX -- The combined total of the major lottery jackpots on Tuesday was more than $1.01 billion, which certainly put the Mega Millions and Powerball games in mind for millions of players nationwide, who lined up to buy tickets.

What many players in New York did not know, however, was that the state can take away a significant portion of their winnings if they hit the jackpot, even if their lottery payout is relatively small.

The seizing of lottery winnings, called an intercept, is not new, although very few of the millions of people who buy lottery tickets in New York state are aware of it. New York has the most stringent seizure law in the country.

Established under the direction of then-Governor George Pataki, the seizure program was founded in 1995 as part of a plan for the state to recoup expenditures it had made to New York residents who no longer needed indigent citizens' services. In other words, the program was set up for the state to be repaid for public assistance it had provided for lottery game winners after those formerly low-income winners had increased their income through lottery payouts.

"That's not fair," said Laura Vargas, a Mega Millions player at the 7-Eleven market on Fordham Road at Arthur Avenue here. Even though she's never been on public assistance herself, she was one of many customers at the convenience store who expressed shock over learning about the seizure program.

"If you've been on public assistance, and you won the prize, you just got lucky," Vargas said. "And they just want to take advantage of it? That's not fair to me."

Another customer, who'd just bought a half dozen Mega Millions tickets, echoed Vargas's message. "That's totally crazy. It shouldn't be tolerated."

He had also never been on public assistance, but, like Vargas and other customers, was surprised to learn that in the last five years, according to state records reviewed by syracuse.com, New York has seized more than $20 million in lottery winnings from more than 30,000 public assistance recipients. The average seizure was $670.

There are exceptions, however, and few people know that better than Susan Antos.

"There are in instructions on how to appeal, and they should do that right away," was advice that the attorney with the Empire Justice Center in Albany gave to anyone who's been notified that they're the subject of a lottery winnings intercept.

Antos represented Brooklyn resident Walter Carver, 72, who had half his $10,000 scratch off prize seized in 2007. The state had said that because he'd received public assistance in the past, he needed to repay it by forfeiting half of his jackpot. Antos successfully argued that, because Carver had been in a welfare-to-work program -- rather than receiving public assistance without working for the benefits -- he should not have had to forfeit the money.

It took overcoming a series of appeals, as well as eight years of time, for the New York State Court of Appeals, the highest court in the state, to rule in Carver's favor for a final time. He got his $5,000 back in 2015.

Antos said that any type of cash public assistance is subject to seizure by the state.

"Some people don't know what cash public assistance is," Antos told PIX11 News via FaceTime. She explained that state-funded housing vouchers given to a tenant's landlord qualify as cash public assistance that the tenant is receiving. "A living allowance that's [also] considered cash public assistance. If you're in a shelter, that's called cash public assistance, and it's where there are big recoveries."

The cost of the state housing residents in shelters can be quite steep, she said, and it's an amount that residents would be expected to repay to the state if they were to win any lottery prize greater than $600. Shelter payments can be in the tens of thousands of dollars a year, Antos said.

Public assistance recipients who win lottery prizes are expected to reimburse the state for any cash public assistance they've received for 10 years prior to their winning.