$120-Million Settlement on Welfare Draws Few Takers

Despite an unusual, state-financed advertising campaign to reach them, relatively few California families eligible for a share of a $120-million welfare settlement have filed claims with only a week left before a court-imposed deadline, officials said Thursday.

Fewer than 15,000 of an estimated 120,000 families who were improperly denied all or part of their Aid to Families with Dependent Children welfare benefits between 1976 and 1981 have applied for back payments, reported Liz Brady, a spokeswoman for the Department of Social Services.

As part of a settlement of four separate lawsuits, these families must mail or deliver their applications to local welfare offices by Feb. 28 or forfeit the money due them.

The department set aside $100 million, half in federal and half in state funds, to pay for individual claims that have ranged from a few dollars to as high as $9,000. However, if every eligible family collected the amount it is entitled to, the total could soar to $120 million.

Only 12% Respond

But the response to a $375,000 advertising campaign has been much less than welfare officials anticipated. Despite television, radio and newspaper ads and an attempt to reach 1.4 million past and present welfare families by direct mail, only 12% of those who are eligible for cash payments have responded.

Lawyers for the legal aid societies that represented the welfare families in the court cases now fear that the beneficiaries stand to lose as much as $100 million that they are entitled to.

Linda McMahon, director of the welfare department, said there is no possibility of extending the deadline. “In order to administer something like this you have to have a cutoff,” she said.

The state portion of the amount uncollected would revert to the general fund. The federal share would be reduced proportionately.

State welfare officials are unsure why the response has been so limited.

“Some people may have put the claim booklet (sent out more than three months ago) aside and said, ‘I’ll get to it later,’ ” Brady said. “Well, ‘later’ is now.”

Eligible families who no longer receive welfare may be unaware that they are eligible for a state payment, Brady speculated. Others who are still receiving benefits may worry that a successful claim would reduce their current grants, which is not the case.

Part of the problem is that many of the eligible families have changed addresses since they last received welfare. More than 200,000 application booklets were returned to the Department of Social Services as undeliverable, Brady said.

Surprisingly, one former welfare recipient who was a party to one lawsuit that led to the cash settlement did not receive the necessary forms in the mail.

In addition, the woman, who was not identified, encountered great difficulty getting the application papers from her local welfare agency, said Peter Reid, executive director of the Legal Aid Society of San Mateo County. Reid said he provided her with the forms and she has collected $9,000.

She was one of a large number of AFDC recipients improperly denied all or part of their welfare benefits because of the presence of a stepparent in the household.