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New law ensures Pa. lottery winners pay their debts

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Pennsylvania LotteryPennsylvania Lottery: New law ensures Pa. lottery winners pay their debts
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A new law took effect on Tuesday that will help some Pennsylvania Lottery winners spend their winnings by ensuring they pay any outstanding debts.

The law, which was enacted by Gov. Tom Wolf a year ago, applies only to those lucky enough to win a single prize of more than $2,500.

It makes it so winners who owe back state taxes will have that amount deducted from their lottery winnings, provided their appeal rights on their tax debt has expired or were exhausted.

Delinquent taxes would be deducted, though, only after any back child support is collected from the prize, which is an intercept authority given to the lottery in 1992.

Once those debts are paid, the new law directs the lottery to look into whether the prize winner has any unpaid court-ordered obligations such as court costs, fines and restitution. If so, they get deducted.

Any outstanding obligations that exceed prize amounts would leave the winner with nothing but the knowledge of knowing some of their debts have been paid.

But that's not all.

The law requires lottery officials to also make an inquiry with the Department of Human Services to determine if the prize winner is receiving public assistance and whether the prize makes them ineligible for benefits going forward.

According to an earlier news release, state Rep. Adam Harris, R-Juniata County, who sponsored this legislation, called that welfare benefit check "an important part of the bill because it is imperative that public assistance funds are available for people who truly need them. It protects those who are less fortunate and ensures the integrity of the welfare system."

The law does allow the state Department of Revenue, which oversees the lottery, the ability to assess a fee for the cost of administering this intercept program, which would be yet another deduction from the winnings.

What's more, prizes over $5,000 will have state and federal taxes withheld at the current rates. As of January of this year, those rates were 24 percent for federal income tax and 3.07 percent for state personal income tax, according to lottery officials.

Prize claimants will be notified if a debt is to be paid with their prize winnings along with information about their rights to appeal the amount with the intercepting entity.

The lottery winnings intercept has proven to be effective means for collecting back child support. Just in the past five years, lottery officials say it has resulted in the collection of nearly $666,000 in delinquent child support.

What hasn't changed about the lottery is you still have to play the lottery to win a prize but if you win a bigger prize, some winners may find it pays less than they had hoped.

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21 comments. Last comment 7 months ago by cbr$.
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Raven62's avatar - binary
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New Jersey
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Posted: October 31, 2018, 10:43 am - IP Logged

An attempt to legislate personal responsibility and accountability.

A mind once stretched by a new idea never returns to its original dimensions!

Catch-22: A dilemma or difficult circumstance from which there is no escape because of mutually conflicting or dependent conditions.

Corruptissima re publica plurimae leges: When the republic is at its most corrupt the laws are most numerous.

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    Central TN
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    October 16, 2018
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    Posted: October 31, 2018, 11:59 am - IP Logged

    Personally I thought that type of law was on the books in states that had lotteries already.

      CDanaT's avatar - Nolz june15.jpg
      Central TN
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      Member #121189
      January 4, 2012
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      Posted: October 31, 2018, 12:54 pm - IP Logged

      If you owe, then pay up...nothing wrong with ensuring your financial obligations are met.

      Integrity: There is just no substitute

        music*'s avatar - Trek HAND1.gif
        Fresno, California
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        August 2, 2014
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        Posted: October 31, 2018, 1:25 pm - IP Logged

        This law might encourage winners to sell their winning ticket at a discount to another willing person. Pumpkin

          " Live Long and Prosper" Spock on Star Trek. A Vulcan.

          benjibanks's avatar - Lottery-062.jpg
          Los Angeles
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          January 12, 2018
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          Posted: October 31, 2018, 3:09 pm - IP Logged

          ^ I thought that this would reduce people playing the lottery but it makes more sense for winners to just sell them if they might be forced to pay debts or lose welfare benefits.

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            United States
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            March 12, 2015
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            Posted: October 31, 2018, 6:42 pm - IP Logged

            Over $2500?  Most states take out deductions/liens when the prize is over $599.

              Dd2160's avatar - Lottery-016.jpg
              USA USA
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              October 22, 2012
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              Posted: October 31, 2018, 7:04 pm - IP Logged

              Get the heck out of here!

              So the genius in me is like Hmmmm?!BS

              Thank U Next.

              THANK U Next.

              420 216 1420 0216 9998 3323 1991

                oate's avatar - AS5hcja

                United States
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                October 22, 2018
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                Posted: October 31, 2018, 8:38 pm - IP Logged

                The law does allow the state Department of Revenue, which oversees the lottery, the ability to assess a fee for the cost of administering this intercept program, which would be yet another deduction from the winnings.

                Good grief, they'd better give the winner a refund of that fee when the intercept team finds that the winner is not a deadbeat. 

                 

                Just in the past five years, lottery officials say it has resulted in the collection of nearly $666,000 in delinquent child support.

                That works out to a measly $133,200 a year.  That's something like only 10 - 20 deadbeat dads a year, not nearly enough to justify charging winners a fee for this new program.  If the state wants rip off lottery players even more, why not just make the prizes smaller and harder to win, like California does?

                Only my hairdresser knows for sure.

                  TheMeatman2005's avatar - lightening
                  Brooklyn, NY
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                  October 29, 2015
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                  Posted: October 31, 2018, 8:44 pm - IP Logged

                  This law might encourage winners to sell their winning ticket at a discount to another willing person. Pumpkin

                  I have heard of people doing this only to find out that the person they gave the ticket to to cash owed back obligations as well and ended up with nothing. 

                  Bang Head

                  The Meatman 🥩🍗🍔🍖🍤🌭

                  “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

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                    United States
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                    November 23, 2017
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                    Posted: October 31, 2018, 8:48 pm - IP Logged

                    What's more, prizes over $5,000 will have state and federal taxes withheld at the current rates.

                    That's a shame. I don't think local taxes used to be withheld before. That means you don't get to keep and invest that 3.07% for a while before having to pay the tax.

                      Todd's avatar - Cylon 2.gif
                      50
                      Chief Bottle Washer
                      New Jersey
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                      May 31, 2000
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                      Posted: October 31, 2018, 8:50 pm - IP Logged

                      What's more, prizes over $5,000 will have state and federal taxes withheld at the current rates.

                      That's a shame. I don't think local taxes used to be withheld before. That means you don't get to keep and invest that 3.07% for a while before having to pay the tax.

                      That started over 2 years ago: https://www.lotterypost.com/news/305216

                       

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                        United States
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                        November 23, 2017
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                        Posted: October 31, 2018, 11:30 pm - IP Logged

                        Oh, I see. I thought the withholding part was new.


                          United States
                          Member #193239
                          October 24, 2018
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                          Posted: November 1, 2018, 1:08 am - IP Logged

                          Maybe just play Pick 3 hahaha and try to win big and get only CASH

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                            Simpsonville
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                            January 22, 2015
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                            Posted: November 1, 2018, 10:29 am - IP Logged

                            A couple of months ago we were in a casino near Indy.  Guy sitting there waiting.  Employees show up with paperwork for his jackpot win.  They said 'Indiana law requires us to collect for back child support and you can contest this through such and such an agency'.  Felt kind of embarrassed for the guy who looked late 60's; they could have pulled him into the office. We were right next to him and couldn't help but observe this.