Nearly 10,000 low-income Coloradans have gotten taxpayer-funded discounts on their home-telephone service for the past four years, despite not qualifying for the subsidy.
They’ve been wrongly getting the break — at a cost as high as $7.9 million — from Qwest through the state’s Low-Income Telephone Assistance Program.
The monthly discount of up to $16.50 is supposed to cease when a recipient is off welfare. But that hasn’t happened because the state Department of Human Services, which certifies to telecoms that someone is eligible for the subsidy, hasn’t checked the names since at least 2005, according to state and federal records.
A problem-plagued computer system intended to streamline the state’s welfare-benefits process is to blame, DHS spokeswoman Liz McDonough said.
The revelation comes as a Miami-based company is trying to get state approval for a plan to provide free cellphones to the poor under the same LITAP program.
The proposal by TracFone was before the Colorado Public Utilities Commission for its first discussion on Thursday.
As of March 2009, there were 24,931 households receiving the telephone subsidy statewide, and Qwest served the bulk of them, according to DHS.
Two months ago, DHS officials finally cross-checked the list of those getting LITAP credits with state welfare rolls and pegged at 9,843 the number of people wrongly getting the benefit from Qwest.
The LITAP program is intended to help the indigent afford telephone service.
The program provides monthly credits — $10 from the federal Universal Service Fund and the remaining $6.50 from the state — to the home- phone bill of individuals on the public dole.
60 days to prove eligibility
Phone users pay into the program through federal and state taxes on their monthly bills. It is unclear whether state or federal agencies will try to recoup any of the miscredited funds.
Three weeks ago, Qwest notified the first 3,280 of the group that they were about to lose the subsidy. The second wave of notices will be sent to another 3,280 people on the ineligible list at the end of August, and the final batch will be sent around Halloween.
The recipients each have 60 days to prove they still qualify or the discount will be discontinued.
That means some ineligible recipients could continue to get the phone discount for up to seven months.
Qwest officials said the staggered mailing was to help the DHS avoid a crunch of responses and, Qwest spokeswoman Johnna Hoff said, “to provide the best possible customer experience.”
Until recently, the DHS sent notices to anyone receiving money from one of six welfare programs telling them of their eligibility for LITAP assistance. The individual would contact Qwest and request the subsidy, self-certifying that they were eligible.
Though Qwest has known since 2005 that the state wasn’t certifying any of the recipients, the company regularly filed paperwork to state and federal agencies for reimbursement, saying everyone getting the discount was eligible. Hoff said Qwest was following the process that DHS had established.
Now DHS plans to inform Qwest weekly of individuals eligible for the LITAP discount.
7-cent state tax reinstated
The reason the DHS stopped cross-checking names of LITAP recipients with state welfare rolls back in May 2005 was a malfunctioning computer system, McDonough said.
The $166.4 million system that was to streamline the state’s benefits programs is the Colorado Benefits Management System. It has been responsible for a litany of problems that belie the ease with which it was to make getting welfare benefits.
The system has been blamed for a long-standing, massive logjam in food-stamp benefits and for disqualifying some welfare applicants while overpaying others.
After the cross-checks stopped four years ago, no one from DHS or Qwest ever reinstituted them, spokespersons for each said.
Low-income phone service is one of four programs funded by the Universal Service Fund and nationally cost taxpayers $819 million last year.
In addition to the federal fund, Coloradans pay into a state fund through a 7-cent tax on each phone line. But they haven’t had to pay those 7 cents since 2005, when Qwest settled a lawsuit with other regional telephone carriers and agreed to pay $5.5 million into the LITAP fund.
The state tax was reinstated on phone bills June 1.
David Migoya: 303-954-1506 or dmigoya@denverpost.com
