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The Department of Homeless Services has wasted no time distributing its new rental vouchers. Just a week into the program, 11 families have already found apartments using them, and 1,100 more have been declared eligible to start looking. But the subsidy, which replaced Section 8 as a tool for re-housing homeless adults and families, has a catch: you have to be on welfare to qualify. Lose welfare—or get sanctioned for breaking a rule—and you could be out of a home.

On the surface, it makes sense to link welfare and homeless services. Most homeless families qualify for public assistance and it saves the city money by tapping into federal funds. DHS has actively encouraged welfare participation; 71 percent of its families are now enrolled. Yet that still leaves a sizable chunk who aren’t eligible for public assistance, because they are undocumented or because they earn too much. And no welfare means no voucher.

DHS argues that the program is not intended to serve every homeless family. Roughly 1/3 have traditionally left the shelter system without any form of rental assistance.

Ingrid Valdez, a 33-year-old mother of three, fears she may join their ranks. After months in shelter, she was approved for Section 8 in October and quickly found an apartment in Queens. “It was renovated and everything,” she said. “It was beautiful.” But the policy changed before she could sign her lease. Now, she’s learned that she isn’t eligible for the new voucher because she isn’t on welfare. She’s called DHS and the City Council, but so far no one knows what to tell her.

Meanwhile, recipients who succeed on welfare and find jobs could lose the vouchers as their earnings increase. Anticipating this problem, the city proposed a “work support” program, allowing families to continue receiving the voucher for the maximum five years, regardless of new income. But the state, which approved the city’s plan Dec. 10, didn’t approve that program, on the grounds that federal welfare dollars, which partly fund the new vouchers, could only be spent on welfare clients.

For the same reason, families sanctioned from public assistance are also ineligible for vouchers. As of November, roughly 15 percent of families on welfare had sanctions in effect or in process for anything from missed appointments to incomplete work hours. But sanctions also result from bureaucratic error, said Jennifer Werdell, director of advocacy for Project FAIR (Fair Hearing Assessment, Information and Referral), which offers legal help to recipients. She said it was not uncommon to hear of cases summarily closed over a misdirected letter or incorrect paperwork.

DHS spokesperson Jim Anderson said his agency will make every effort to keep its clients housed. DHS will get daily feeds, for instance, from the Human Resources Administration, providing advance warning if voucher-holders face sanctions. DHS will then dispatch field workers to help the residents get back on track.

Werdell is still skeptical. “These benefits are all helping to provide for someone’s basic needs,” she said. “If sanctions are in place, they could lose everything.”

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