The state has put on hold a debit card system that would have significantly restricted the buying options of welfare recipients in New York’s new Safety Net program.

About 30,000 city families became eligible for the state- and city-funded Safety Net on December 1 after hitting their five-year time limit on federal benefits. As part of the state welfare program created in 1997, Albany legislators called for limiting to $58.20 the cash portion of the average public assistance grant which in total is $577 for a single parent and two children. The rest would be accessible through a debit card accepted only at stores that currently have machines and phone lines that can process those cards.

That would have ruled out paying for school clothes at a church rummage sale or buying fruit from a street vendor. “Poor people stretch their dollars as far as they can,” argued Lisa Pearlstein, an attorney with Brooklyn Legal Services, which lobbied against the new card program. “Nobody buys shampoo at Duane Reade, where it’s $4.50. They go to a 99-cent store where it’s a dollar.”

Officials at the state Office of Temporary and Disability Assistance came to agree, and have shelved the plan until it undergoes further examination. “We decided to take a look at making sure that there is a good mix of merchants who can take the card before we go ahead with implementation,” said agency spokesperson Jack Madden. How or when that will happen is unclear, he said, but due to Albany’s lengthy contracting process, it’s unlikely to reappear before 2003, if ever.

The state first revealed its concerns about the system in July when OTDA rejected Citicorp’s bid to run the network. Citicorp refused to comment on the state’s recent decision.

Needless to say, opponents to the debit card are pleased. “It was more than just a little bit patronizing to say to people, ‘We don’t trust you with cash,'” said state Assemblymember Ed Sullivan, a vocal critic of Governor Pataki’s welfare policies. “People should have the opportunity to regulate their own lives without the government following them every step of the way.”